```
 
```

| CONSOLIDATED STATEMENTS OF      FINANCIAL POSITION                                                                                                           |    |    |                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|--------------|----------------------------|
| As of      October 31    (millions of US dollars,      except share amounts)                                                                            |    | 2008    | 2007Restated(Note 2)  |
| ASSETS                                                                                                                                                                 |    |    |                  |    |
| Current Assets                                                                                                                                                         |    |    |                  |    |
| Cash and      cash equivalents                                                                                                                                         | $       | 120     | $                     | 222  |
| Short-term investments                                                                                                                                                 |    | -       |                  | 102  |
| Accounts receivable, net                                                                                                                                               |    | 264     |                  | 287  |
| Notes      receivable                                                                                                                                                  |    | 72      |                  | -  |
| Unbilled      revenue                                                                                                                                                  |    | 86      |                  | 99  |
| Inventories, net                                                                                                                                                       |    | 85      |                  | 128  |
| Income taxes recoverable                                                                                                                                               |    | 61      |                  | 54  |
| Current portion of deferred tax      assets                                                                                                                            |    | 20      |                  | 45  |
| Prepaid expenses and other                                                                                                                                             |    | 17      |                  | 22  |
| Assets held for sale                                                                                                                                                   |    | 6       |                  | 1  |
| Total Current      Assets                                                                                                                                              |    | 731     |                  | 960  |
|                                                                                                                                                                   |    |    |                  |    |
| Restricted cash                                                                                                                                                        |    | 13      |                  | 13  |
| Property, plant and equipment, net                                                                                                                                     |    | 301     |                  | 975  |
| Deferred tax assets                                                                                                                                                    |    | 95      |                  | 4  |
| Long-term investments and other      assets                                                                                                                            |    | 125     |                  | 290  |
| Goodwill                                                                                                                                                               |    | 452     |                  | 782  |
| Intangible assets, net                                                                                                                                                 |    | 155     |                  | 219  |
| Total Assets                                                                                                                                                           | $       | 1,872   | $                     | 3,243  |
| LIABILITIES AND SHAREHOLDERS’      EQUITY                                                                                                                        |    |    |                  |    |
| CurrentLiabilities                                                                                                                                                     |    |    |                  |    |
| Accounts payable and      accrued liabilities                                                                                                                          | $       | 267     | $                     | 384  |
| Current portion of      deferred revenue                                                                                                                               |    | 79      |                  | 71  |
| Income taxes      payable                                                                                                                                              |    | 1       |                  | 57  |
| Current portion of      long-term debt                                                                                                                                 |    | 19      |                  | 94  |
| Current portion of      deferred tax liabilities                                                                                                                       |    | 4       |                  | 10  |
| Total Current      Liabilities                                                                                                                                         |    | 370     |                  | 616  |
|                                                                                                                                                                   |    |    |                  |    |
| Long-term debt                                                                                                                                                         |    | 263     |                  | 290  |
| MAPLE financial liability                                                                                                                                              |    | -       |                  | 161  |
| Deferred revenue                                                                                                                                                       |    | 10      |                  | 17  |
| Other long-term obligations                                                                                                                                            |    | 31      |                  | 30  |
| Deferred tax liabilities                                                                                                                                               |    | 108     |                  | 188  |
| Total Liabilities                                                                                                                                                      |    | 782     |                  | 1,302  |
|                                                                                                                                                                   |    |    |                  |    |
| Shareholders’      Equity                                                                                                                                        |    |    |                  |    |
| Common shares at par  – Authorized      shares: unlimited; Issued and outstanding shares: 120,137,229 and      122,578,331 for 2008 and 2007, respectively  |         | 489     |                       | 493  |
| Additional paid-in capital                                                                                                                                             |    | 75      |                  | 72  |
| Retained earnings                                                                                                                                                      |    | 301     |                  | 880  |
| Accumulated other comprehensive income                                                                                                                                 |    | 225     |                  | 496  |
| Total Shareholders’      Equity                                                                                                                                  |    | 1,090   |                  | 1,941  |
| Total Liabilities and      Shareholders’ Equity                                                                                                                  | $       | 1,872   | $                     | 3,243  |
|                               |                                     |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------|
| James      MacDonald, Director                                                                                                                                            | William      D. Anderson, Director  |

| CONSOLIDATED STATEMENTS OF OPERATIONS                                                                   |    |                |                        |                  |
|---------------------------------------------------------------------------------------------------------|--------------|--------------------------|----------------------------------|----------------------------|
| Years ended October 31 (millions of US dollars, except per share amounts)                               |    | 2008                | 2007 Restated(Note 2)  | 2006Restated(Note 2)  |
| Revenues                                                                                           |    |                |                        |                  |    |    |
| Products                                                                                           | $       | 636                 | $                           | 564                   | $  | 438  |
| Services                                                                                           |    | 579                 |                        | 555                   |    | 517  |
| Reimbursement revenues                                                                             |    | 100                 |                        | 91                    |    | 105  |
|     Total      revenues                                                             |    | 1,315               |                        | 1,210                 |    | 1,060  |
|                                                                                               |    |                |                        |                  |    |    |
| Costs and expenses                                                                                 |    |                |                        |                  |    |    |
| Direct cost of products                                                                            |    | (387)               |                        | (360)                 |    | (296)  |
| Direct cost of services                                                                            |    | (374)               |                        | (338)                 |    | (362)  |
| Reimbursed expenses                                                                                |    | (100)               |                        | (91)                  |    | (105)  |
| Selling, general and      administration                                                           |    | (280)               |                        | (265)                 |    | (220)  |
| Research and development                                                                           |    | (79)                |                        | (68)                  |    | (53)  |
| Depreciation and amortization                                                                      |    | (100)               |                        | (79)                  |    | (51)  |
| MAPLE Facilities lease      reassessment:                                                          |    |                |                        |                  |    |    |
|    Write-off of      construction-in-progress                                            |    | (501)               |                        | -                     |    | -  |
|    Write-off of financial      liability                                                 |    | 160                 |                        | -                     |    | -  |
| Other impairment of long-lived      assets                                                         |    | (11)                |                        | -                     |    | -  |
| Impairment of goodwill                                                                             |    | (320)               |                        | -                     |    | -  |
| Restructuring charges - net                                                                        |    | (13)                |                        | (37)                  |    | 7  |
| Change in fair value of embedded      derivatives                                                  |    | (14)                |                        | 4                     |    | -  |
| Other income (expenses) - net                                                                      |    | 11                  |                        | (84)                  |    | -  |
|     Total costs      and expenses                                                   |    | (2,008)             |                        | (1,318)               |    | (1,080)  |
|                                                                                               |    |                |                        |                  |    |    |
| Operating loss from continuing      operations                                                     |    | (693)               |                        | (108)                 |    | (20)  |
|                                                                                               |    |                |                        |                  |    |    |
| Interest      expense                                                                              |    | (18)                |                        | (15)                  |    | (14)  |
| Interestincome                                                                                     |    | 16                  |                        | 25                    |    | 15  |
| Change in fair value of interest rate swaps                                                        |    | 2                   |                        | 1                     |    | -  |
| Equityearnings                                                                                     |    | 49                  |                        | 53                    |    | 49  |
| (Loss) income from continuing      operations before income taxes                                  |    | (644)               |                        | (44)                  |    | 30  |
|                                                                                               |    |                |                        |                  |    |    |
| Income tax      (provision) recovery                  |    |                |                        |                  |    |    |
|     -      current                                                                  |    | (40)                |                        | 25                    |    | 65  |
|     -      deferred                                                                 |    | 131                 |                        | (6)                   |    | (43)  |
| (Loss) income from continuing      operations                                                      |    | (553)               |                        | (25)                  |    | 52  |
|                                                                                               |    |                |                        |                  |    |    |
| Income from discontinued      operations - net of income taxes                                     |    | -                   |                        | 806                   |    | 98  |
| Net (loss) income                                                                                  | $       | (553)               | $                           | 781                   | $  | 150  |
|                                                                                               |    |                |                        |                  |    |    |
| Basic (loss) earnings per share       -from continuing      operations                        | $       | (4.54)              | $                           | (0.19)                | $  | 0.36  |
| - from discontinued      operations                                                                |    | -                   |                        | 6.12                  |    | 0.68  |
| Basic (loss) earnings per      share                                                                    | $       | (4.54)              | $                           | 5.93                  | $  | 1.04  |
|                                                                                                    |    |                |                        |                  |    |    |
| Diluted (loss) earnings per      share- from continuing operations                                      | $       |   (4.54)  | $                           | (0.19)                | $  | 0.36  |
| - from discontinued operations                                                                          |    | -                   |                        | 6.11                  |    | 0.68  |
| Diluted (loss) earnings per      share                                                                  | $       | (4.54)              | $                           | 5.92                  | $  | 1.04  |
|                                                                                    |     Common      Shares  |        AdditionalPaid-inCapital  | RetainedEarnings       Restated      (Note 2)         | AccumulatedOtherComprehensive      IncomeRestated(Note 2)   | TotalShareholders’Equity Restated (Note      2)              |
|----------------------------------------------------------------------------------------------|--------------------------------------------------|--------------------------------------------------------------------------|-----------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------------------------------------------|
|                                                                                    |
|                                                                                    |
|   (millions of US dollars, except Common shares in thousands)                      | Shares      (# in      thousands)           |   Amount                                                       |
| Balance as of October 31,      2005                                                     | 142,099                                     | $           535                            | $              67  | $              287  | $                268  | $             1,157  |
| Other comprehensive income:                                                             |                                        |                                                                |                                                       |                                                        |                                                                    |    |
| Net income                                                                              | -                                           | -                                                                   | -                                                          | 150                                                         | -                                                                       | 150  |
| Foreign currency translation, net      of tax of $(2)                                   | -                                           | -                                                                   | -                                                          | -                                                           | 61                                                                      | 61  |
| Unrealized loss      on available-for-sale securities, net of tax of $1                 | -                                           | -                                                                   | -                                                          | -                                                           | (10)                                                                    | (10)  |
| Reclassification of      realized losses, net of tax of nil                             | -                                           | -                                                                   | -                                                          | -                                                           | 9                                                                       | 9  |
| Dividends                                                                               | -                                           | -                                                                   | -                                                          | (16)                                                        | -                                                                       | (16)  |
| Issuance of Common shares                                                               | 361                                         | 7                                                                   | -                                                          | -                                                           | -                                                                       | 7  |
| Stock options exercised                                                                 | 1,859                                       | 24                                                                  | -                                                          | -                                                           | -                                                                       | 24  |
| Stock-based compensation                                                                | -                                           | -                                                                   | 2                                                          | -                                                           | -                                                                       | 2  |
| Balance as of October 31,      2006                                                     | 144,319                                     | 566                                                                 | 69                                                         | 421                                                         | 328                                                                     | 1,384  |
| Other comprehensive income:                                                             |                                        |                                                                |                                                       |                                                        |                                                                    |    |
| Net income                                                                              | -                                           | -                                                                   | -                                                          | 781                                                         | -                                                                       | 781  |
| Foreign currency translation, net      of tax of $(10)                                  | -                                           | -                                                                   | -                                                          | -                                                           | 189                                                                     | 189  |
| Unrealized loss      on available-for-sale securities, net of tax of $2                 | -                                           | -                                                                   | -                                                          | -                                                           | (3)                                                                     | (3)  |
| Unrealized gain      on derivatives designated as cash flow hedges, net of tax of $(2)  | -                                           | -                                                                   | -                                                          | -                                                           | 8                                                                       | 8  |
| Reclassification of      realized gains, net of tax of nil                              | -                                           | -                                                                   | -                                                          | -                                                           | (4)                                                                     | (4)  |
| Adoption of FAS      158, net of tax of $(5)                                            | -                                           | -                                                                   | -                                                          | -                                                           | 11                                                                      | 11  |
| Dividends                                                                               | -                                           | -                                                                   | -                                                          | (4)                                                         | -                                                                       | (4)  |
| Issuance of Common shares                                                               | 108                                         | 2                                                                   | -                                                          | -                                                           | -                                                                       | 2  |
| Repurchase      and cancellation of Common shares                                       | (22,831)                                    | (90)                                                                | -                                                          | (318)                                                       | (33)                                                                    | (441)  |
| Stock options exercised                                                                 | 982                                         | 15                                                                  | (1)                                                        | -                                                           | -                                                                       | 14  |
| Stock-based compensation                                                                | -                                           | -                                                                   | 4                                                          | -                                                           | -                                                                       | 4  |
| Balance as of October 31,      2007                                                     | 122,578                                     | 493                                                                 | 72                                                         | 880                                                         |        496                                                         |            1,941  |
| Other comprehensive      income:                                                        |                                        |                                                                |                                                       |                                                        |                                                                    |    |
| Net loss                                                                                | -                                           | -                                                                   | -                                                          | (553)                                                       | -                                                                       | (553)  |
| Foreign currency translation,      net of tax of $10                                    | -                                           | -                                                                   | -                                                          | -                                                           | (249)                                                                   | (249)  |
| Reclassification of realized      loss, net of tax of nil                               | -                                           | -                                                                   | -                                                          | -                                                           | 3                                                                       | 3  |
| Unrealized loss on      available-for-sale securities, net of tax of nil                | -                                           | -                                                                   | -                                                          | -                                                           | (2)                                                                     | (2)  |
| Unrealized loss on derivatives      designated as cash flow hedges, net of tax of $5    | -                                           | -                                                                   | -                                                          | -                                                           | (10)                                                                    | (10)  |
| Pension liability adjustments,      net of tax of $3                                    | -                                           | -                                                                   | -                                                          | -                                                           | (7)                                                                     | (7)  |
| Repurchase and cancellation of      Common     shares               | (2,903)                                     | (12)                                                                | -                                                          | (26)                                                        | (6)                                                                     | (44)  |
| Stock options      exercised                                                            | 462                                         | 7                                                                   | -                                                          | -                                                           | -                                                                       | 7  |
| Stock-based      compensation                                                           | -                                           | -                                                                   | 6                                                          | -                                                           | -                                                                       | 6  |
| Other                                                                                   | -                                           | 1                                                                   | (3)                                                        | -                                                           | -                                                                       | (2)  |
| Balance as of October 31,      2008                                                     | 120,137                                     | $           489                            | $              75  | $              301  | $               225        | $              1,090  |

| CONSOLIDATED STATEMENTS OF CASH      FLOWS                                                                                                    |
|----------------------------------------------------------------------------------------------------------------------------------------------------|
| Years ended October 31    (millions of US dollars)                                                                             |    | 2008  | 2007Restated(Note 2)  | 2006Restated(Note 2)  |
| Cash flows from operating      activities                                                                                                     |    |    |    |    |    |    |
| Net (loss) income                                                                                                                             | $  | (553)  | $  | 781  | $  | 150  |
| Less: Income from discontinued operations      - net of tax                                                                                   |    | -  |    | 806  |    | 98  |
| (Loss) income from continuing      operations                                                                                                 |    | (553)  |    | (25)  |    | 52  |
| Adjustments to reconcile net (loss)      income to cash provided by operating   activities relating      to continuing operations   |    |    |    |    |    |    |
| Items not affecting current cash      flows                                                                                                   |    | 644  |    | 186  |    | 73  |
| Net change in operating assets and      liabilities                                                                                           |    | (109)  |    | 15  |    | (105)  |
| Cash (used in) provided by operating activities of continuing operations                                                                           |    | (18)  |    | 176  |    | 20  |
| Cash (used in)      provided by operating activities of discontinued operations                                                               |    | -  |    | (56)  |    | 104  |
|                                                                                                                                          |    | (18)  |    | 120  |    | 124  |
| Cash flows from investing      activities                                                                                                     |    |    |    |    |    |    |
| Acquisitions                                                                                                                                  |    | (14)  |    | (600)  |    | -  |
| Purchases of property, plant and      equipment                                                                                               |    | (52)  |    | (71)  |    | (51)  |
| Proceeds on sale      of property, plant and equipment                                                                                        |    | 2  |    | 4  |    | -  |
| Proceeds from      sale of businesses and investments                                                                                         |    | 23  |    | 13  |    | 5  |
| Proceeds on sale of short-term      investments                                                                                               |    | 101  |    | 165  |    | -  |
| Purchases of short-term      investments                                                                                                      |    | -  |    | (118)  |    | (135)  |
| Increase in restricted cash                                                                                                                   |    | -  |    | (5)  |    | (8)  |
| Other                                                                                                                                         |    | -  |    | (15)  |    | (11)  |
| Cash provided by (used in) investing      activities of continuing operations                                                                 |    | 60  |    | (627)  |    | (200)  |
| Cash provided by      investing activities of discontinued operations                                                                         |    | -  |    | 929  |    | 73  |
|                                                                                                                                          |    | 60  |    | 302  |    | (127)  |
| Cash flows from financing      activities                                                                                                     |    |    |    |    |    |    |
| Proceeds from MAPLE Facilities      project                                                                                                   |    | -  |    | -  |    | 22  |
| Repayment of long-term      debt                                                                                                              |    | (89)  |    | (18)  |    | (7)  |
| Payment of cash      dividends                                                                                                                |    | -  |    | (3)  |    | (13)  |
| Issuance ofshares                                                                                                                             |    | 7  |    | 15  |    | 26  |
| Repurchase of      shares                                                                                                                     |    | (44)  |    | (441)  |    | -  |
| Cash (used in)      provided by financing activities of continuing operations                                                                 |    | (126)  |    | (447)  |    | 28  |
| Cash (used in) financing activities of      discontinued operations                                                                           |    | -  |    | (2)  |    | (12)  |
|                                                                                                                                          |    | (126)  |    | (449)  |    | 16  |
| Effect of foreign      exchange rate changes on cash and cash equivalents                                                                     |    | (18)  |    | 10  |    | 11  |
| Net (decrease) increase in cash      and cash equivalents during the year                                                                     |    | (102)  |    | (17)  |    | 24  |
| Cash and cash equivalents, beginning of      year                                                                                             |    | 222  |    | 239  |    | 215  |
| Cash and cash equivalents, end      of year                                                                                                   | $  | 120  | $  | 222  | $  | 239  |
| Cash interest paid                                                                                                                            | $  | 18  | $  | 22  | $  | 21  |
| Cash taxes paid                                                                                                                               | $  | 88  | $  | 15  | $  | 9  |

| Consolidated Statement of      Financial Position  |    | As of      October 31, 2007  |
|---------------------------------------------------------|--------------|-----------------------------------|
|                                     |    | PreviouslyReported           |    | Adjustments  | Restated  |
| Property, plant and equipment, net                 | $       | 386                          | $  | 589  | a  | $                 975  |
| Intangible assets, net                             |    | 583                          |    | (364)  | b  | 219  |
| MAPLE financial liability                          |    | -                            |    | 161  | c  | 161  |
| Deferred tax liabilities                           |    | 168                          |    | 20  | d  | 188  |
| Retained earnings                                  |    | 842                          |    | 38  | e  | 880  |
| Accumulated other comprehensive      income        | $       | 490                          | $  | 6  |    | $                  496  |

| Consolidated Statement of      Operations         |    | For the year      ended October 31, 2007  |
|--------------------------------------------------------|--------------|------------------------------------------------|
|                                    |    | Previously Reported                  |    | Adjustments  | Restated  |
| Interest expense                                  | $       | (27)                                      | $  | 12  | e  | $                 (15)  |
| Income tax (provision) – deferred           |    | (2)                                       |    | (4)  | e  | (6)  |
| Net income                                        | $       | 773                                       | $  | 8  |    |         $                  781  |
| Basic (loss) earnings per share                   |    |                                      |    |    |    |    |
|    - from continuing      operations    | $       | (0.25)                                    | $  | 0.06  |    | $              (0.19)  |
|    - from discontinued      operations  |    | 6.12                                      |    | -  |    | 6.12  |
|                                              | $       | 5.87                                      | $  | 0.06  |    | $                 5.93  |
| Diluted (loss) earnings per share                 |    |                                      |    |    |    |    |
|    - from continuing      operations    | $       | (0.25)                                    | $  | 0.06  |    | $              (0.19)  |
|    - from discontinued      operations  |    | 6.11                                      |    | -  |    | 6.11  |
|                                              | $       | 5.86                                      | $  | 0.06  |    | $                5.92  |

| Consolidated Statements of      Operations        |    | For the year      ended October 31, 2006  |
|--------------------------------------------------------|--------------|------------------------------------------------|
|                                    |    | Previously Reported                  |    |   Adjustments  |   Restated  |
|                                              |    |                                      |    |    |    |    |
| Other income (expenses) - net                     | $       | (36)                                      | $  | 36  | e  | $                    -  |
| Interest expense                                  |    | (21)                                      |    | 7  | e  | (14)  |
| Income tax (expense) - deferred                   |    | (30)                                      |    | (13)  | e  | (43)  |
| Net income                                        | $       | 120                                       | $  | 30  |    | $                150  |
|                                              |    |                                      |    |    |    |    |
| Basic earnings per share                          |    |                                      |    |    |    |    |
|    - from continuing      operations    | $       | 0.15                                      | $  | 0.21  |    | $               0.36  |
|    - from discontinued      operations  |    | 0.68                                      |    | -  |    | 0.68  |
|                                              | $       | 0.83                                      | $  | 0.21  |    | $               1.04  |
|                                              |    |                                      |    |    |    |    |
| Diluted earnings per share                        |    |                                      |    |    |    |    |
|    - from continuing      operations    | $       | 0.15                                      | $  | 0.21  |    | $               0.36  |
|    - from discontinued      operations  |    | 0.68                                      |    | -  |    | 0.68  |
|                                              | $       | 0.83                                      | $  | 0.21  |    | $               1.04  |

|   (a)  | Recording      of construction-in-progress and capitalized interest related to lease      accounting                                                          | $       | 589             |
|-----------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------|----------------------|
|             | Additional      construction-in-progress and capitalized interest during fiscal 2008                                                                          |    | 39              |
|             | Impact of      foreign currency translation as at October 31, 2008                                                                                            |    | (127)           |
|             | Construction-in-progress      and capitalized interest related to lease accounting as at October 31,      2008                                                | $       | 501             |
| (b)              | Reversal of      intangible assets for long-term supply agreement recognized in fiscal      2006                                                              | $       | (364)           |
|   (c)       | Recording of      MAPLE financial liability related to lease accounting                                                                                       | $       | 161             |
|             | Additional MAPLE      financial liability during fiscal 2008                                                                                                  |    | 34              |
|             | Impact of      foreign currency translation as of October 31, 2008                                                                                            |    | (35)            |
|             | MAPLE financial      liability relating to lease accounting as of October 31, 2008                                                                            | $       | 160             |
| (d)              | Deferred tax      liabilities relating to capitalized interest and reversal of loss on      non-monetary transaction                                          | $       | 20              |
| (e)              | Fiscal 2007      consolidated statement of operations adjustments for capitalized interest      and taxes                                                     | $       | 8               |
|             | Fiscal 2006      consolidated statement of operations adjustments for reversal of loss on      non-monetary transaction, capitalized interest and taxes  |    |   30  |
|             | Total impact on      retained earnings as of October 31, 2007                                                                                                 | $       | 38              |

InternationalAccounting Standards

```
 
```

| Blueshift                                                             |    | MDC   |
|----------------------------------------------------------------------------|--------------|------------|
| Net tangible assets                                                   | $       | -     | $  | 26  |
| Developed technologies (five-year      weighted average useful life)  |    | 8     |    | 161  |
| Brands                                                                |    | -     |    | 30  |
| Goodwill (not      deductible for income tax purposes)                |    | 6     |    | 383  |
| Total purchase      price                                             | $       | 14    | $  | 600  |

```
 
```

c)    

|                                                                                                                  |    | 2007   |    | 2006   |
|----------------------------------------------------------------------------------------------------------------------------|--------------|-------------|--------------|-------------|
| Net revenues                                                                                                          | $       | 95     | $       | 362    |
| Cost of revenues                                                                                                      |    | (57)   |    | (225)  |
| Selling, general and administration                                                                                   |    | (16)   |    | (53)   |
| Depreciation and amortization                                                                                         |    | -      |    | (10)   |
| Restructuring charges1                                                                                                |    | -      |    | (1)    |
| Other expenses                                                                                                        |    | -      |    | (3)    |
| Operating income                                                                                                      |    | 22     |    | 70     |
| Gain on sale of discontinued      operations                   |    | 904    |    | 24     |
| Dividend and interest income                                                                                          |    | 1      |    | 2      |
| Income taxes                                                                                                          |    | (117)  |    | 7      |
| Minority interest                                                                                                     |    | (5)    |    | (8)    |
| Equity earnings                                                                                                       |    | 1      |    | 3      |
| Income from discontinued      operations – net of income tax                                                    | $       | 806    | $       | 98     |

|                             |    | 2008  |    | 2007  |
|---------------------------------------|--------------|------------|--------------|------------|
| Trade accounts receivable        | $       | 237   | $       | 238   |
| Other receivables                |    | 33    |    | 54    |
|                             |    | 270   |    | 292   |
| Allowance for doubtful accounts  |    | (6)   |    | (5)   |
| Accounts receivable, net              | $       | 264   | $       | 287   |

|                                              |    | 2008  |    | 2007  |
|--------------------------------------------------------|--------------|------------|--------------|------------|
| Raw materials and supplies                        | $       | 60    | $       | 83    |
| Work-in-process                                   |    | 14    |    | 34    |
| Finished goods                                    |    | 21    |    | 26    |
|                                              |    | 95    |    | 143   |
| Allowance for excess and obsolete      inventory  |    | (10)  |    | (15)  |
| Inventories, net                                       | $       | 85    | $       | 128   |

|                                     |    | 2008   |    | 2007 Restated (Note 2)         |
|-----------------------------------------------|--------------|-------------|--------------|-------------------------------------|
|                                     |    | Cost   |    | Accumulated      Depreciation  |    | Cost  |    | AccumulatedDepreciation  |
| Land                                     | $       | 25     | $       | -                              | $  | 25  | $  | -  |
| Buildings                                |    | 142    |    | 43                             |    | 176  |    | 60  |
| Equipment                                |    | 199    |    | 139                            |    | 266  |    | 182  |
| Furniture      and fixtures              |    | 26     |    | 20                             |    | 29  |    | 22  |
| Computer      systems                    |    | 136    |    | 81                             |    | 145  |    | 77  |
| Leasehold      improvements              |    | 58     |    | 31                             |    | 60  |    | 33  |
| Facility      modifications              |    | 23     |    | 13                             |    | 30  |    | 15  |
| Construction      in-progress            |    | 19     |    | -                              |    | 633  |    | -  |
|                                     |    | 628    |    |                           |    | 1,364  |    |    |
| Accumulated      depreciation            |    | (327)  |    |                           |    | (389)  |    |    |
| Property,      plant and equipment, net  | $       | 301    | $       | 327                            | $  | 975  | $  | 389  |

|                            |    | 2008  |    | 2007 Restated (Note 2)         |
|--------------------------------------|--------------|------------|--------------|-------------------------------------|
|                            |    | Cost  |    | Accumulated      Depreciation  |    | Cost  |    | AccumulatedDepreciation  |
| Buildings                       | $       | -     | $       | -                              | $  | 15  | $  | 6  |
| Computer      systems           |    | 3     |    | 2                              |    | 3  |    | 2  |
| Construction      in-progress1  |    | -     |    | -                              |    | 589  |    | -  |
|                            |    | 3     |    |                           |    | 607  |    |    |
| Accumulated      depreciation   |    | (2)   |    |                           |    | (8)  |    |    |
|                            | $       | 1     | $       | 2                              | $  | 599  | $  | 8  |

|                                                                         |    | 2008  |    | 2007  |
|-----------------------------------------------------------------------------------|--------------|------------|--------------|------------|
| Financial instrument pledged as security      on long-term debt(a)(Note 14)  | $       | 35    | $       | 46    |
| Long-term notes receivable(b)                                                |    | 30    |    | 125   |
| Equity investment(c)                                                         |    | 5     |    | 10    |
| Investment in joint ventures (Note 25)                                       |    | 13    |    | 38    |
| Available      for sale investments(d)                                       |    | 16    |    | 32    |
| Deferred      pension assets (Note      24)                                  |    | 26    |    | 39    |
| Long-term investments and other      assets                                  | $       | 125   | $       | 290   |

|                                                                                                   | 2008    | 2007   |
|-------------------------------------------------------------------------------------------------------------|--------------|-------------|
| Balance, beginning of year                                                                             | $       | 782    | $  | 397  |
| Acquired(i)                      |    | 25     |    | 364  |
| Disposal                                                                                                    |    | (1)    |    | -  |
| Impairment(ii)                                                      |    | (320)  |    | -  |
| Foreign exchange and other                                                                                  |    | (34)   |    | 21  |
| Balance, end of year                                                                                   | $       | 452    | $  | 782  |

The Company performs an annual goodwillimpairment test as of October 31, 2008 or earlier upon the occurrence of certainevents or substantive changes in circumstance. The goodwill impairment testrequires the identification of reporting units and a comparison of the estimatedfair value of each reporting unit to the carrying value that is recorded on theCompany’s consolidated statements of financial position. The Company reviewedthe components of its three operating segments, and has determined that giventhe similar economic characteristics and nature of the businesses within eachoperating segment, the Company has identified MDS Pharma Services, MDS Nordion,and MDS Analytical Technologies as its three reporting units. The current fairvalue of the Company’s reporting units are estimated based on discounted cashflows and comparable company market valuation approaches. The valuationapproaches use key judgments and assumptions that are sensitive to change, whichinclude appropriate sales growth rates, operating margins, weighted averagecosts of capital (WACC), and comparable company market multiples. Whendeveloping these key judgments and assumptions, the Company considers economic,operational and market conditions that could impact the estimated fair value ofthe reporting units. However, estimates are inherently uncertain and representonly management’s reasonable expectations regarding future developments. Theseestimates and the key judgments and assumptions upon which the estimates arebased will, in all likelihood, differ in some respects from actual futureresults.  For example, should a significant or prolonged deterioration ineconomic conditions occur, key judgments and assumptions could be impacted.Generally, a moderate decline in estimated operating income or an increase inWACC or a decline in market conditions could result in an additional indicationof impairment

|                                                                   |    | 2008  |    | 2007 Restated (Note 2)         |
|-----------------------------------------------------------------------------|--------------|------------|--------------|-------------------------------------|
|                                                                   |    | Cost  |    | Accumulated      Amortization  |    | Cost  |    | AccumulatedAmortization  |
| Acquired technology (5 years weighted      average useful  life)  | $       | 170   | $       | 48                             | $  | 161  | $  | 16  |
| Licenses (5 years weighted average useful      life)                   |    | 25    |    | 18                             |    | 32  |    | 18  |
| Brands (9 year average useful life)                                    |    | 30    |    | 4                              |    | 60  |    | -  |
|                                                                   | $       | 225   |    |                           | $  | 253  |    |    |
| Accumulated      amortization                                          |    | (70)  |    |                           |    | (34)  |    |    |
| Intangible      assets, net                                            | $       | 155   | $       | 70                             | $  | 219  | $  | 34  |

|                                                     | 2008    | 2007Restated(Note 2)  |
|---------------------------------------------------------------|--------------|----------------------------|
| Balance, beginning of year                               | $       | 219                   | $  | 16  |
| Acquired                                                 |    | 8                     |    | 221  |
| Amortized                                                |    | (40)                  |    | (21)  |
| Purchase price      allocation adjustments(Note      4)  |    | (30)                  |    | -  |
| Currency translation                                          |    | (2)                   |    | 3  |
| Balance, end of year                                     | $       | 155                   | $  | 219  |

|                 |    | 2008  |    | 2007Restated(Note 2)  |
|---------------------------|--------------|------------|--------------|----------------------------|
| Acquired technology  | $       | 7     | $       | 161                   |
| Licenses             |    | 1     |    | -                     |
| Brands               |    | -     |    | 60                    |
|                 | $       | 8     | $       | 221                   |

|        |    |    |
|------------------|--------------|--------------|
| 2009        | $       | 36      |
| 2010        |    | 35      |
| 2011        |    | 28      |
| 2012        |    | 18      |
| 2013        |    | 16      |
| Thereafter  |    | 22      |
|        | $       | 155     |

|                                           |    | 2008  |    | 2007  |
|-----------------------------------------------------|--------------|------------|--------------|------------|
| Accounts payable                               | $       | 97    | $       | 123   |
| Employee-related accruals                      |    | 40    |    | 50    |
| Incentive compensation                         |    | 11    |    | 43    |
| FDA provision(a)                               |    | 30    |    | 55    |
| Other payables(b)                              |    | 89    |    | 113   |
| Accounts payable and accrued      liabilities  | $       | 267   | $       | 384   |

|                                     | Maturity      |    | 2008  |    | 2007Restated(Note 2)  |
|-----------------------------------------------|--------------------|--------------|------------|--------------|----------------------------|
| Senior unsecured notes(a)                     | 2009 to 2014       | $       | 227   | $       | 307                   |
| Other      debt(b)                       | 2009 to 2015  |    | 55    |    | 77                    |
| Total      long-term debt(c)             |          |    | 282   |    | 384                   |
| Current      portion of long-term debt   |          |    | (19)  |    | (94)                  |
| Long-term      debt                      |          |    | 263   |    | 290                   |
| MAPLE      financial liability (Note 2)  |          | $       | -     | $       | 161                   |
|                                               |

|        |    |    |
|------------------|--------------|--------------|
| 2009        | $       | 19      |
| 2010        |    | 28      |
| 2011        |    | 16      |
| 2012        |    | 17      |
| 2013        |    | 171     |
| Thereafter  |    | 31      |
|        | $       | 282     |

| 2009                                      | $       | 3    |
|------------------------------------------------|--------------|-----------|
| 2010                                      |    | 2    |
| 2011                                      |    | 2    |
| 2012                                      |    | 3    |
| 2013                                      |    | -    |
|                                      |    | 10   |
| Less: portion      representing interest  |    | (2)  |
|                                      | $       | 8    |

|                                             |    | 2008  |    | 2007  |
|-------------------------------------------------------|--------------|------------|--------------|------------|
| Payment in advance of services      rendered     | $       | 66    | $       | 55    |
| Deferred credit related to government      loan  |    | 9     |    | 15    |
| Other                                            |    | 14    |    | 18    |
|                                             |    | 89    |    | 88    |
| Less current portion                             |    | (79)  |    | (71)  |
| Long-term portion of deferred      revenue       | $       | 10    | $       | 17    |

|     (number of shares in millions)                     |    | 2008    |    | 2007Restated(Note 2)  |    | 2006Restated(Note 2)  |
|---------------------------------------------------------------------------------|--------------|--------------|--------------|----------------------------|--------------|----------------------------|
| Weighted average number of      Common shares outstanding – basic    |    | 122     |    | 132                   |    | 143                   |
| Impact of stock options assumed      exercised                             |    | -       |    | -                     |    | 1                     |
| Weighted average number of      Common shares outstanding – diluted  |    | 122     |    | 132                   |    | 144                   |
| Basic (loss) earnings per share      from continuing operations            | $       | (4.54)  | $       | (0.19)                | $       | 0.36                  |
| Basic earnings per share from      discontinued operations                 | $       | -       | $       | 6.12                  | $       | 0.68                  |
| Diluted (loss) earnings per      share from continuing operations          | $       | (4.54)  | $       | (0.19)                | $       | 0.36                  |
| Diluted earnings per share from      discontinued operations               | $       | -       | $       | 6.11                  | $       | 0.68                  |

|     ($ millions,      except earnings per share)     |    | 2008    |    | 2007Restated(Note 2)  |    | 2006Restated(Note 2)  |
|-------------------------------------------------------------------------------|--------------|--------------|--------------|----------------------------|--------------|----------------------------|
| Net (loss)      income                                                   | $       | (553)   | $       | 781                   | $       | 150                   |
| Compensation      expense for options granted prior to November 1, 2003  |    | -       |    | (1)                   |    | (2)                   |
| Net (loss) income      – pro-forma                                 | $       | (553)   | $       | 780                   | $       | 148                   |
|                                                                     |    |    |    |                  |    |                  |
| Pro-forma basic      (loss) earnings per share                           | $       | (4.54)  | $       | 5.92                  | $       | 1.04                  |
| Pro-forma diluted      (loss) earnings per share                         | $       | (4.54)  | $       | 5.91                  | $       | 1.03                  |

|                                  | Common Shares                                            |
|--------------------------------------------|---------------------------------------------------------------|
| (number      of shares in thousands)  | Number                                                   |    | Amount  |
| Balance      as of October 31, 2005   |      142,099                         | $  |                  535   |
| Issued                                |          2,220   |    |                    31   |
| Balance      as of October 31, 2006   |      144,319                         |    |                  566  |
| Issued                                | 1,090                                                    |    | 17  |
| Repurchased       and cancelled  | (22,831)                                                 |    | (90)  |
| Balance      as of October 31, 2007   | 122,578                                                  |    | 493  |
| Issued                                | 462                                                      |    | 7  |
| Repurchased      and cancelled        | (2,903)                                                  |    | (12)  |
| Other                                 | -                                                        |    | 1  |
| Balance as of October 31,      2008   | 120,137                                                  | $  | 489  |

|                                        | Expense                                                         | Cumulative                          | ProvisionBalance      at October      31  |
|--------------------------------------------------|----------------------------------------------------------------------|------------------------------------------|-----------------------------------------------------|
|                                        | 2008                                                            | 2007                                | 2006                                           | Cash  | Non-Cash  | 2008  |
| Workforce      reductions                   |                                                            |                                |                                           |    |    |    |
| -      MDS Pharma Services                  | $               7  | $      16  | $       -        |   $      (16)  | $                (2)  |  $                  5  |
| -      MDS Analytical Technologies          | 2                                                               | 1                                   | -                                              | (3)  | 2  | 2  |
| -      Corporate and other                  | -                                                               | 1                                   | 1                                              | (2)  | -  | -  |
| Restructuring      charge (recovery)        | 9                                                               | 18                                  | 1                                              | (21)  | -  |  7  |
| Contract cancellation      charges          |                                                            |                                |                                           |    |    |    |
| -      MDS Pharma Services                  | -                                                               | 5                                   | -                                              | (5)  | -  | -  |
| -      MDS Analytical Technologies          | 1                                                               | -                                   | -                                              | -  | -  | 1  |
| -      Corporate and other                  | 1                                                               | -                                   | (8)                                            | (1)  | 9  | 1  |
| Restructuring      charge (recovery)        | 2                                                               | 5                                   | (8)                                            | (6)  | 9  | 2  |
| Equipment and other asset      write-downs  |                                                            |                                |                                           |    |    |    |
| -      MDS Pharma Services                  | 1                                                               | 1                                   | -                                              | -  | -  | 2  |
| Restructuring      charge                   | 1                                                               | 1                                   | -                                              | -  | -  | 2  |
| Other                                       |                                                            |                                |                                           |    |    |    |
| -      MDS Pharma Services                  | 1                                                               | 5                                   | -                                              | (6)  | -  | -  |
| -      Corporate and other                  | -                                                               | 8                                   | -                                              | (7)  | (1)  | -  |
| Restructuring charge      (recovery)        | 1                                                               | 13                                  | -                                              | (13)  | (1)  | -  |
| Total for Plan                              | $             13             | $      37  | $    (7)                        | $        (40)  | $                  8  | $                11  |

|                                                                    |    | 2008  |    | 2007  |    | 2006 Restated(Note 2)  |
|------------------------------------------------------------------------------|--------------|------------|--------------|------------|--------------|-----------------------------|
| Valuation      provisions and investments write-downs (Note 10)         | $       | (11)  | $       | (8)   | $       | (1)                    |
| Gain (loss) on      sale of business, investments and other long-term assets |    | (2)        |    | 5          |    | 2                           |
| FDA (provision)      recovery (Note 13)                                 |    | 10    |    | (61)  |    | -                      |
| Foreign exchange      gains (losses)                                    |    | 18    |    | (16)  |    | (3)                    |
| Other                                                                   |    | (4)   |    | (4)   |    | 2                      |
| Other income      (expenses) - net                                      | $       | 11    | $       | (84)  | $       | -                      |

|                                                                   |    | 2008   |    | 2007Restated(Note 2)  |    | 2006Restated(Note 2)  |
|-----------------------------------------------------------------------------|--------------|-------------|--------------|----------------------------|--------------|----------------------------|
| Canadian                                                               | $       | (306)  | $       | (21)                  | $       | 37                    |
| Foreign                                                                |    | (338)  |    | (23)                  |    | (7)                   |
| Net (loss) income from continuing      operations before income taxes  | $       | (644)  | $       | (44)                  | $       | 30                    |

|                                          |    | 2008    |    | 2007Restated(Note 2)  |    | 2006Restated(Note 2)  |
|----------------------------------------------------|--------------|--------------|--------------|----------------------------|--------------|----------------------------|
| Canadian income tax (provision) recovery      |    |    |    |                  |    |                  |
| Current                                       | $       | (28)    | $       | 25                    | $       | 70                    |
| Deferred                                      |    | 117     |    | 3                     |    | (43)                  |
| Foreign income tax (provision)      recovery  |    |    |    |                  |    |                  |
| Current                                       |    | (12)    |    | -                     |    | (5)                   |
| Deferred                                      |    | 14      |    | (9)                   |    | -                     |
| Income tax recovery                           | $       | 91      | $       | 19                    | $       | 22                    |

|                                                                                                                                              | 2008               | 2007Restated(Note 2)  | 2006Restated(Note 2)  |
|--------------------------------------------------------------------------------------------------------------------------------------------------------|-------------------------|----------------------------|----------------------------|
|                                                                                                                                              | %                  | %                     | %                     |
| Combined federal and provincial tax rate                                                                                                          | 33.0               | 35.0                  | 35.0                  |
| Increase (decrease) in tax rate as a      result of:                                                                                              |               |                  |                  |
| Impairment of goodwill                                                                                                                            | (16.4)             | -                     | -                     |
| Deferred tax recovery on the      write-off related to the MAPLE Facilities lease     reassessment at lower      future tax rates  |   (2.7)  |   -         |   -         |
| Investments and write-downs                                                                                                                       | (0.4)              | (2.5)                 | 6.0                   |
| Tax credits for research and      development                                                                                                     | 1.8                | 28.9                  | (106.3)               |
| Differential foreign tax rates                                                                                                                    | 0.7                | 5.0                   | (4.3)                 |
| Foreign losses not recognized                                                                                                                     | (1.0)              | (18.8)                | 13.7                  |
| Impact of enacted rate changes on      deferred tax balances                                                                                      | 1.8                | 4.5                   | (12.7)                |
| Other                                                                                                                                             | (2.7)              | (8.9)                 | (4.7)                 |
| Effective income tax      rate                                                                                                                    | 14.1               | 43.2                  | (73.3)                |

|                                                                    |    | 2008    |    | 2007Restated(Note 2)  |
|------------------------------------------------------------------------------|--------------|--------------|--------------|----------------------------|
| Deferred taxassets                                                      |    |    |    |                  |
| Tax      benefit of losses carried forward                              | $       | 73      | $       | 39                    |
| Tax      basis in excess of book value                                  |    | 33      |    | 3                     |
| Investment      tax credits                                             |    | 10      |    | 1                     |
| Provisions      and reserves                                            |    | 38      |    | 27                    |
| Deferred      tax assets before valuation allowance                     |    | 154     |    | 70                    |
| Valuation      allowance                                                |    | (39)    |    | (21)                  |
|                                                                    |    | 115     |    | 49                    |
| Deferred tax      liabilities                                           |    |    |    |                  |
| Book      value in excess of tax basis                                  |    | (77)    |    | (187)                 |
| Tax      benefit of losses carried forward                              |    | -       |    | 35                    |
| Tax      on investment tax credits recognized for accounting purposes   |    | (14)    |    | (19)                  |
| Other      comprehensive income                                         |    | (8)     |    | (31)                  |
| Provisions      and reserves not deductible for tax                     |    | (13)    |    | 4                     |
|                                                                    |    | (112)   |    | (198)                 |
|  Net deferred tax assets      (liabilities)                        | $       | 3       | $       | (149)                 |

| Balance,      beginning of year (adoption date)                       | $       | 26   |
|----------------------------------------------------------------------------|--------------|-----------|
| Increase      in reserve for tax positions taken for the prior year   |    | 7    |
| Decrease      in reserve for tax positions taken for the prior year   |    | (2)  |
| Increase      in reserve for tax positions taken in the current year  |    | 5    |
| Foreign      currency exchange rate changes                           |    | (7)  |
| Gross      unrecognized tax benefits as of October 31, 2008           | $       | 29   |

|                                                             |    | 2008    |    | 2007      Restated(Note 2)  |    | 2006      Restated(Note 2)  |
|-----------------------------------------------------------------------|--------------|--------------|--------------|----------------------------------|--------------|----------------------------------|
| Depreciation      and amortization                               | $       | 100     | $       | 93                          | $       | 54                          |
| Stock option compensation                                        |    | 5       |    | 4                           |    | 4                           |
| Future income taxes                                              |    | (131)   |    | 35                          |    | 30                          |
| Equity earnings – net of      distribution                 |    | 10      |    | (1)                         |    | 16                          |
| MAPLE Facilities leasereassessment:                              |    |    |    |                        |    |                        |
|    Write-off of      construction-in-progress          |    | 501     |    | -                           |    | -                           |
|    Write-off of financial      liability               |    | (160)   |    | -                           |    | -                           |
| Write-down of investments and other      long-term assets        |    | 21      |    | 9                           |    | 9                           |
| Impairment of goodwill                                           |    | 320     |    | -                           |    | -                           |
| Loss (gain) on sale of business and other      long-term assets  |    | 5       |    | 2                           |    | (1)                         |
| Mark to market of derivatives                                    |    | 11      |    | (5)                         |    | 5                           |
| FDA (reversal) provision                                         |    | (10)    |    | 61                          |    | -                           |
| Unrealized foreign currency translation      losses (gains)      |    | (14)    |    | 4                           |    | -                           |
| Other                                                            |    | (14)    |    | (16)                        |    | (44)                        |
|                                                             | $       | 644     | $       | 186                         | $       | 73                          |

|                                                   |    | 2008   |    | 2007      Restated(Note 2)  |    | 2006      Restated(Note 2)  |
|-------------------------------------------------------------|--------------|-------------|--------------|----------------------------------|--------------|----------------------------------|
| Accounts      receivable                               | $       | (23)   | $       | (32)                        | $       | (18)                        |
| Unbilled revenue                                       |    | -      |    | 23                          |    | (25)                        |
| Inventories                                            |    | 12     |    | (19)                        |    | 49                          |
| Prepaid expenses and other                             |    | (11)   |    | 34                          |    | (3)                         |
| Accounts payable and accrued      liabilities          |    | (78)   |    | 16                          |    | (39)                        |
| Income taxes                                           |    | (32)   |    | -                           |    | (55)                        |
| Deferred revenue and other long-term      obligations  |    | 23     |    | (7)                         |    | (14)                        |
|                                                   | $       | (109)  | $       | 15                          | $       | (105)                       |

|                                                   | Number (000s)  | Weighted Average  ExercisePrice (C$)  | WeightedAverageRemaining Contractual Life(Years)  | Aggregate Intrinsic Value (C$ millions)  |
|-------------------------------------------------------------|---------------------|-------------------------------------------------|--------------------------------------------------------|-----------------------------------------------|
| Outstanding as of      October 31, 2006                | 5,850          | $                                          | 18.76                                             | 5.3                                      | $  | 9  |
| Granted                                                | 1,241          |                                       | 21.72                                             | -                                        |    | -  |
| Exercised                                              | (982)          |                                       | 16.47                                             | -                                        |    | -  |
| Cancelled                                              | (554)          |                                       | 20.35                                             | -                                        |    |    |
| Outstanding as of      October 31, 2007                | 5,555          | $                                          | 19.66                                             | 5.3                                      | $  | 10  |
| Granted                                                | 39             |                                       | 20.29                                             |                                     |    |    |
| Exercised                                              | (462)          |                                       | 15.91                                             |                                     |    |    |
| Cancelled                                              | (942)          |                                       | 20.41                                             |                                     |    |    |
| Outstanding as of      October 31, 2008                | 4,190          | $                                          | 19.92                                             | 4.3                                      | $  | -  |
| Vested and expected to      vest at October 31, 2007*  | 5,279          |                                       | 19.66                                             | 5.2                                      |    | 10  |
| Vested and expected to      vest at October 31, 2008*  | 4,043          |                                       | 19.90                                             | 4.8                                      |    | -  |
| Exercisable at October      31, 2007                   | 3,223          |                                       | 19.01                                             | 4.3                                      |    | 8  |
| Exercisable at October      31, 2008                   | 2,944          | $                                          | 19.49                                             | 3.9                                      | $  | -  |

*The expected to vest amountrepresents the unvested options as at October 31, 2008 and 2007, respectively,less estimated forfeitures.

|                                |                                                     |    | Options Outstanding  | Options Exercisable  |
|------------------------------------------|---------------------------------------------------------------|--------------|---------------------------|---------------------------|
| Range of Exercise Prices      (C$)  | Weighted      AverageRemaining Contractual Life (Years)  |    | Number(000s)         |                 | Weighted Average Exercise Price (C$)  | Number(000s)  |    | Weighted AverageExercisePrice(C$)  |
| $13.95 - $15.70                     | 0.80                                                     |    | 176                  |                 | 14.21  | 176  |    | 14.21  |
| $15.75 - $17.20                     | 3.45                                                     |    | 409                  |                 | 16.75  | 408  |    | 16.75  |
| $17.50 - $19.00                     | 4.46                                                     |    | 751                  |                 | 18.40  | 631  |    | 18.52  |
| $19.05 - $20.50                     | 4.51                                                     |    | 977                  |                 | 19.89  | 680  |    | 19.86  |
| $20.75 - $22.50                     | 4.73                                                     |    | 1,877                |                 | 21.76  | 1,049  |    | 21.78  |
|                                | 4.34                                                     |    | 4,190                |                 | 19.92  | 2,944  |    | 19.49  |

|                                                     | Number (000s)  | WeightedAverageExercisePrice (US$)  | WeightedAverageRemaining Contractual Life(Years)  | Aggregate Intrinsic Value (US$)  |
|---------------------------------------------------------------|---------------------|------------------------------------------|--------------------------------------------------------|---------------------------------------|
| Outstanding as of      October 31, 2007                  | -              | $                                   | -                                                 | -                                | $  | -  |
| Granted                                                  | 1,161          |                                | 15.89                                             |                             |    |    |
| Cancelled                                                | (8)            |                                | 16.65                                             |                             |    |    |
| Outstanding as of      October 31, 2008                  | 1,153          | $                                   | 15.88                                             | 6.6                              | $  | -  |
| Vested and expected to      vest as of October 31, 2008  | 1,016          |                                | 15.88                                             | 6.6                              |    | -  |
| Exercisable at October      31, 2008                     | -              | $                                   | -                                                 | -                                | $  | -  |

|                                                         |                                                   |    | Options Outstanding  | Options Exercisable  |
|-------------------------------------------------------------------|-------------------------------------------------------------|--------------|---------------------------|---------------------------|
|     Range of Exercise Prices      (US$)  | Weighted      AverageRemainingContractualLife (Years)  |    | Number(000s)         |                 | Weighted Average Exercise Price (US$)  | Number(000s)  |    | Weighted Average Exercise Price(US$)  |
| $9.89 - $14.34                                               | 6.81                                                   |    | 20                   | $                    | 13.38  | -  | $  | -  |
| $15.89 - $18.78                                              | 6.62                                                   |    | 1,133                |                 | 15.93  | -  |    | -  |
|                                                         | 6.63                                                   |    | 1,153                | $                    | 15.88  | -  | $  | -  |

|                                       | 2008   | 2007   | 2006   |
|-------------------------------------------------|-------------|-------------|-------------|
| Risk-free      interest rate               | 3.6%   | 4.5%   | 3.9%   |
| Expected      dividend yield               | 0.0%   | 0.0%   | 0.7%   |
| Expected      volatility                   | 0.231  | 0.209  | 0.230  |
| Expected time until      exercise (years)  | 4.40   | 4.35   | 3.25   |

|                                                   |    | 2008  |    | 2007  |    | 2006  |
|-------------------------------------------------------------|--------------|------------|--------------|------------|--------------|------------|
| Aggregate      intrinsic value of options exercised    | C$      | 1     | C$      | 5     | C$      | 12    |
|                                                   | US$     | -     | US$     | -     | US$     | -     |
| Aggregate grant-date      fair value of shares vested  | C$      | 5     | C$      | 5     | C$      | 7     |
|                                                   | US$     | -     | US$     | -     | US$     | -     |

| Liability  | As of      October 31  |
|-----------------|-----------------------------|
|       |                   | 2008  |    | 2007  |
| 2006 Plan  | $                      | 1  | $  | 11  |
| 2007 Plan  |                   | -  |    | 3  |
| 2008 Plan  |                   | 2  |    | -  |
| Total      | $                      | 3  | $  | 14  |
|                 |                             |  |  |  |  |  |  |

| Expense      (Income)  | Year ended October      31  |
|-----------------------------|----------------------------------|
|                   |                        | 2008  |    | 2007  |
| 2006      Plan         | $                           | (7)  | $  | 2  |
| 2007 Plan              |                        | (3)  |    | 3  |
| 2008 Plan              |                        | 2  |    | -  |
| Total                  | $                           | (8)  | $  | 5  |

|                       | Shares(000s)  | Grant Date      Fair Value  | Intrinsic      Value  |
|-------------------------------------------|--------------------|----------------------------------|----------------------------|
| Outstanding,      beginning of year  | -             | -                           | -                     |
| Granted                              | 286           | 4                           | 3                     |
| Vested                               | -             | -                           | -                     |
| Forfeited                            | -             | -                           | -                     |
| Outstanding, end      of year        | 286           | 4                           | 3                     |
|                                 |          |                        |                  |
| RSU stock expected      to vest      | 286           | 4                           | 3                     |

|                                          | Domestic Plans  | InternationalPlans  |
|----------------------------------------------------|----------------------|--------------------------|
|                                          |            | 2008                |    | 2007  |    | 2006  |    | 2008  |    | 2007  |    | 2006  |
| Components of net periodic pension      cost  |            |                |    |    |    |    |    |    |    |    |    |    |
|     Service cost               | $               | 3                   | $  | 4  | $  | 3  | $  | 1  | $  | -  | $  | 1  |
|     Interest cost              |            | 11                  |    | 9  |    | 8  |    | 1  |    | 1  |    | 1  |
| Expected return on plan assets                |            | (15)                |    | (12)  |    | (11)  |    | (1)  |    | (1)  |    | (1)  |
| Recognized actuarial gain                     |            | -                   |    | -  |    | 1  |    | -  |    | -  |    | -  |
| Amortization of net transitionasset           |            | -                   |    | (2)  |    | (2)  |    | -  |    | -  |    | -  |
| Curtailment gain                              |            | (1)                 |    | -  |    | -  |    | -  |    | -  |    | (1)  |
| Net periodic pension cost                     | $               | (2)                 | $  | (1)  | $  | (1)  | $  | 1  | $  | -  | $  | -  |

|                            | Domestic Plans  |    | InternationalPlans  |
|--------------------------------------|----------------------|--------------|--------------------------|
|                            | 2008            | 2007    | 2006                |    | 2008  | 2007  | 2006  |
| Benefit obligation              |            |    |                |    |    |    |    |
| Discount rate                   | 7.25%           | 5.60%   | 5.25%               |    | 5.45%  | 4.94%  | 4.65%  |
| Expected return on plan assets  | 6.75%           | 6.75%   | 6.50%               |    | 5.74%  | 5.94%  | 5.65%  |
| Rate of compensation increase   | 3.75%           | 3.75%   | 3.75%               |    | 4.28%  | 3.94%  | 3.86%  |
| Benefit cost                    |            |    |                |    |    |    |    |
| Discount rate                   | 5.80%           | 5.25%   | 5.25%               |    | 4.74%  | 4.85%  | 5.07%  |
| Expected return on plan assets  | 6.75%           | 6.50%   | 6.75%               |    | 5.74%  | 5.94%  | 6.08%  |
| Rate of compensation increase   | 3.75%           | 3.75%   | 3.75%               |    | 3.85%  | 3.94%  | 3.86%  |

|                                                       | Domestic Plans  | InternationalPlans  |
|-----------------------------------------------------------------|----------------------|--------------------------|
|                                                       |            | 2008                |    | 2007  |    | 2008  |    | 2007  |
| Change in benefit obligation                               |            |                |    |    |    |    |    |    |
|   Benefit obligation, beginning of      year          | $               | 208                 | $  | 163  | $  | 22  | $  | 20  |
|   Service cost - pension                              |            | 4                   |    | 5  |    | 1  |    | -  |
|   Interest cost                                       |            | 11                  |    | 9  |    | 1  |    | 1  |
|   Benefits paid                                       |            | (5)                 |    | (6)  |    | (1)  |    | (2)  |
|   Actuarial loss                                      |            | (39)                |    | 4  |    | (1)  |    | -  |
|   Curtailments                                        |            | (1)                 |    | -  |    | -  |    | -  |
|   Foreign currency exchange rate      changes         |            | (40)                |    | 33  |    | (2)  |    | 3  |
| Total benefit obligation, end of      year                 |            | 138                 |    | 208  |    | 20  |    | 22  |
| Change in fair value of plan assets                        |            |                |    |    |    |    |    |    |
|   Fair value of plan assets,      beginning of year   |            | 246                 |    | 196  |    | 23  |    | 20  |
|   Employer contributions                              |            | 3                   |    | 3  |    | 1  |    | 1  |
|   Employee contributions                              |            | 1                   |    | 2  |    | -  |    | -  |
|   Actual return on plan assets                        |            | (35)                |    | 15  |    | (2)  |    | 1  |
|   Benefits paid                                       |            | (5)                 |    | (6)  |    | (1)  |    | (2)  |
|   Foreign currency exchange rate      changes         |            | (47)                |    | 36  |    | (3)  |    | 3  |
| Fair value of plan assets, end of      year                |            | 163                 |    | 246  |    | 18  |    | 23  |
| Funded status – over/(under) at end of      year     | $               | 25                  | $  | 38  | $  | (2)  | $  | 1  |

|                                                 |    |                 | 2008    |                |
|-----------------------------------------------------------|--------------|---------------------------|--------------|--------------------------|
|                                                 |    | Domestic      Plans  |    | InternationalPlans  |
| Benefit obligation                                   | $       | 138                  | $       | 20                  |
| Fair value of plan assets                            |    | 163                  |    | 18                  |
| Plan assets in excess of benefit obligations         | $       | 25                   | $       | (2)                 |
| Unrecognized net actuarial gains                     |    | (8)                  |    | 3                   |
| Net amount      recognized at year end               | $       | 17                   |    | 1                   |
| Long-term pension plan assets                        | $       | 25                   | $       | 1                   |
| Non-current liabilities                              | $       | -                    | $       | (2)                 |
| Accumulative other comprehensive (loss)      income  | $       | (8)                  | $       | 2                   |
| Net amount recognized at year end                    | $       | 17                   | $       | 1                   |

|                                                        |    | 2008  |    | 2007  |
|------------------------------------------------------------------|--------------|------------|--------------|------------|
| Net actuarial loss (gain)                                   | $       | (6)   | $       | (16)  |
| Deferred income taxes                                       |    | 2     |    | 5     |
| Accumulated other comprehensive income -      net of taxes  | $       | (4)   | $       | (11)  |

|            | Target  | Domestic      Plans  | InternationalPlans  |
|----------------------|--------------|---------------------------|--------------------------|
| Asset Category  |    | 2008                 | 2007                | 2008  | 2007  |
| Cash            | -       | 0.1%                 | 0.1%                | 51.7%  | 45.7%  |
| Fixed income    | 35.0%   | 39.6%                | 32.1%               | 17.3%  | 19.1%  |
| Equities        | 65.0%   | 60.3%                | 67.8%               | 31.0%  | 35.2%  |
| Total           | 100.0%  | 100.0%               | 100.0%              | 100.0%  | 100.0%  |

|   Years ending October      31  |    | Domestic      Plans  |    | International      Plans  |
|------------------------------------------------|--------------|---------------------------|--------------|--------------------------------|
| 2009                                      | $       | 6                    | $       | 1                         |
| 2010                                      |    | 6                    |    | -                         |
| 2011                                      |    | 7                    |    | -                         |
| 2012                                      |    | 7                    |    | -                         |
| 2013                                      |    | 8                    |    | 1                         |
| 2014 - 2018                               |    | 47                   |    | 4                         |
|                                      | $       | 81                   | $       | 6                         |

|                                                 |    | 2008    |    | 2007    |    | 2006    |
|-----------------------------------------------------------|--------------|--------------|--------------|--------------|--------------|--------------|
| Components of net periodic cost                      |    |    |    |    |    |    |
|     Service cost                      | $       | -       | $       | -       | $       | 1       |
|     Interest cost                     |    | 1       |    | 1       |    | 1       |
|     Curtailment gain      recognized  |    | (1)     |    | -       |    | (1)     |
| Net periodic cost                                    | $       | -       | $       | 1       | $       | 1       |

|                                                                   | 2008    | 2007    | 2006    |
|-----------------------------------------------------------------------------|--------------|--------------|--------------|
| Weighted average assumptions used to      determine net periodic cost  |    |    |    |
|     Discount rate                                       | 7.15%   | 5.56%   | 5.16%   |
|     Rate of compensation      increase                  | 4.13%   | 4.16%   | 4.21%   |
|     Initial health care      cost trend rate            | 8.84%   | 9.10%   | 10.00%  |
|     Ultimate health care      cost trend rate           | 4.84%   | 4.86%   | 5.00%   |
|     Years until ultimate      trend rate is reached     | 9       | 5       | 5       |
| Assumptions used to determine net benefit      cost                    |    |    |    |
|     Discount rate                                       | 5.70%   | 5.18%   | 5.31%   |
|          Rate of compensation increase                  | 4.13%   | 4.16%   | 4.21%   |

|                          | 1% Increase  | 1% Decrease  |
|------------------------------------|-------------------|-------------------|
| Change in net benefit cost    | $            | -            | $  | -  |
| Change in benefit obligation  | $            | 1            | $  | (1)  |

|                                                             |    | 2008    |    | 2007    |
|-----------------------------------------------------------------------|--------------|--------------|--------------|--------------|
| Change in projected benefit      obligation                      |    |    |    |    |
|    Benefit obligations –      beginning of year  | $       | 21      | $       | 17      |
|    Interest cost                                       |    | 1       |    | 1       |
|    Benefits paid                                       |    | (1)     |    | (1)     |
|    Actuarial gain                                      |    | (5)     |    | -       |
|    Curtailments                                        |    | (1)     |    | -       |
|    Foreign currency exchange      rate changes         |    | (5)     |    | 4       |
| Total benefit obligations – end of      year               | $       | 10      | $       | 21      |
|                                                             |    |    |    |    |
| Funded status at end of year –      over/(under) funded    | $       | (10)    | $       | (21)    |

|                                                    |    | 2008  |    | 2007  |
|--------------------------------------------------------------|--------------|------------|--------------|------------|
| Projected benefit obligation                            | $       | 10    | $       | 21    |
| Fair value of plan assets                               |    | -     |    | -     |
| Plan assets in excess (less than) projectedobligations  | $       | (10)  | $       | (21)  |
| Unrecognized actuarial (gains)                          |    | (1)   |    | -     |
| Unrecognized past service costs                         |    | -     |    | -     |
| Unrecognized net transition assets                      |    | (3)   |    | -     |
| Net amount      recognized                              | $       | (14)  | $       | (21)  |

| Years ending October      31  |    |    |
|------------------------------------|--------------|--------------|
| 2009                          | $       | 1       |
| 2010                          |    | 1       |
| 2011                          |    | 1       |
| 2012                          |    | 1       |
| 2013                          |    | 1       |
| 2014 - 2018                   |    | 4       |
| Total                         | $       | 9       |

|          | Years ended October      31  |
|--------------------|-----------------------------------|
|          | 2008                         | 2007  | 2006  |
| Net revenues  | $                            | 314  | $  | 337  | $  | 324  |
| Gross profit  |                         | 179  |    | 193  |    | 180  |
| Net earnings  | $                            | 91  | $  | 108  | $  | 106  |

|                 | As of October 31  |
|---------------------------|------------------------|
|                 | 2008              | 2007  |
| Current assets       | $                 | 43  | $  | 77  |
| Long-term assets     |              | 28  |    | 43  |
|                 | $                 | 71  | $  | 120  |
|                 |              |    |    |    |
| Current liabilities  | $                 | 41  | $  | 32  |
| Equity               |              | 30  |    | 88  |
|                 | $                 | 71  | $  | 120  |

|                                                                       |                      |              |                              |                      |    | Year ended October 31,      2008  |
|---------------------------------------------------------------------------------|--------------------------------|------------------------|----------------------------------------|--------------------------------|--------------|----------------------------------------|
|                                                                       | MDS Pharma      Services  | MDS      Nordion  | MDS      Analytical Technologies  | Corporate      and Other  | Total   |
| Product revenues                                                           | $                         | -                 | $                                 | 290                       | $       | 346                               | $  | -  | $  | 636  |
| Service revenues                                                           |                      | 482               |                              | 6                         |    | 91                                |    | -  |    | 579  |
| Reimbursement      revenues                                                |                      | 100               |                              | -                         |    | -                                 |    | -  |    | 100  |
| Total revenues                                                             |                      | 582               |                              | 296                       |    | 437                               |    | -  |    | 1,315  |
| Direct cost of      products                                               |                      | -                 |                              | (150)                     |    | (237)                             |    | -  |    | (387)  |
| Direct cost of      services                                               |                      | (356)             |                              | (3)                       |    | (15)                              |    | -  |    | (374)  |
| Reimbursed      expenses                                                   |                      | (100)             |                              | -                         |    | -                                 |    | -  |    | (100)  |
| Selling, general and      administration                                   |                      | (127)             |                              | (48)                      |    | (80)                              |    | (25)  |    | (280)  |
| Research and      development                                              |                      | -                 |                              | (3)                       |    | (76)                              |    | -  |    | (79)  |
| Depreciation and      amortization                                         |                      | (35)              |                              | (13)                      |    | (51)                              |    | (1)  |    | (100)  |
| MAPLE Facilities lease      reassessment:                                  |                      |              |                              |                      |    |                              |    |    |    |    |
|           Write-off of construction-in-progress        |                      | -                 |                              | (501)                     |    | -                                 |    | -  |    | (501)  |
|           Write-off of financial liability             |                      | -                 |                              | 160                       |    | -                                 |    | -  |    | 160  |
| Other impairment of      long-lived assets                                 |                      | (11)              |                              | -                         |    | -                                 |    | -  |    | (11)  |
| Impairment of      goodwill                                                |                      | (320)             |                              | -                         |    | -                                 |    | -  |    | (320)  |
| Restructuring charges -      net                                           |                      | (9)               |                              | -                         |    | (3)                               |    |  (1)  |    | (13)  |
| Change in fair value of      embedded          derivatives  |                      | 1                 |                              | (15)                      |    | -                                 |    |   -  |    | (14)  |
| Other income (expenses)      - net                                         |                      | 22                |                              | (2)                       |    | (2)                               |    | (7)  |    | 11  |
| Equity earnings                                                            |                      | -                 |                              | -                         |    | 49                                |    | -  |    | 49  |
| Segment (loss)      earnings                                               | $                         | (353)             | $                                 | (279)                     | $       | 22                                | $  | (34)  | $  | (644)  |
| Capital      expenditures                                                  | $                         | 29                | $                                 | 8                         | $       |   10                    | $  |   5  | $  |   52  |
|                                                                                 |                                |                        |                                        |                                |              |                                        |  |  |  |  |  |  |  |

|                                                                       |                      |              |                              |                      |    | Year ended October 31, 2007  Restated      (Note 2)  |
|---------------------------------------------------------------------------------|--------------------------------|------------------------|----------------------------------------|--------------------------------|--------------|----------------------------------------------------------------|
|                                                                       | MDS Pharma      Services  | MDS      Nordion  | MDS      Analytical Technologies  | Corporate      and Other  | Total   |
| Product revenues                                                           | $                         | -                 | $                                 | 284                       | $       | 280                                                       | $  | -  | $  | 564  |
| Service revenues                                                           |                      | 477               |                              | 6                         |    | 72                                                        |    | -  |    | 555  |
| Reimbursement      revenues                                                |                      | 91                |                              | -                         |    | -                                                         |    | -  |    | 91  |
| Total revenues                                                             |                      | 568               |                              | 290                       |    | 352                                                       |    | -  |    | 1,210  |
| Direct cost of      products                                               |                      | -                 |                              | (147)                     |    | (213)                                                     |    | -  |    | (360)  |
| Direct cost of      services                                               |                      | (332)             |                              | (3)                       |    | (3)                                                       |    | -  |    | (338)  |
| Reimbursed      expenses                                                   |                      | (91)              |                              | -                         |    | -                                                         |    | -  |    | (91)  |
| Selling, general and      administration                                   |                      | (130)             |                              | (54)                      |    | (57)                                                      |    | (24)  |    | (265)  |
| Research and      development                                              |                      | -                 |                              | (4)                       |    | (64)                                                      |    | -  |    | (68)  |
| Depreciation and      amortization                                         |                      | (35)              |                              | (13)                      |    | (29)                                                      |    | (2)  |    | (79)  |
| Restructuring charges -      net                                           |                      | (28)              |                              | -                         |    | -                                                         |    | (9)  |    | (37)  |
| Change in fair value of      embedded          derivatives  |                      |   -     |                              |   4             |    |   -                                             |    |   -  |    |   4  |
| Other income (expenses)      - net                                         |                      | (74)              |                              | (1)                       |    | (6)                                                       |    | (3)  |    | (84)  |
| Equity earnings                                                            |                      | -                 |                              | -                         |    | 53                                                        |    | -  |    | 53  |
| Segment (loss)      earnings                                               | $                         | (122)             | $                                 | 72                        | $       | 33                                                        | $  | (38)  | $  | (55)  |
| Capital      expenditures                                                  | $                         | 48                | $                                 | 8                         | $       | 8                                                         | $  | 7  | $  | 71  |
|                                                                                 |                                |                        |                                        |                                |              |                                                                |  |  |  |  |  |  |  |

|                                       |                      |              |                              |                      |    |    | Year ended October 31, 2006  Restated (Note 2)  |
|-------------------------------------------------|--------------------------------|------------------------|----------------------------------------|--------------------------------|--------------|--------------|-----------------------------------------------------------|
|                                       | MDS Pharma      Services  | MDS      Nordion  | MDS      Analytical Technologies  | Corporate      and Other  | Total   |
| Product revenues                           | $                         | -                 | $                                 | 290                       | $       | 148     | $                                                    | -  | $  | 438  |
| Service revenues                           |                      | 458               |                              | 5                         |    | 54      |                                                 | -  |    | 517  |
| Reimbursement      revenues                |                      | 105               |                              | -                         |    | -       |                                                 | -  |    | 105  |
| Total revenues                             |                      | 563               |                              | 295                       |    | 202     |                                                 | -  |    | 1,060  |
| Direct cost of      products               |                      | -                 |                              | (147)                     |    | (149)   |                                                 | -  |    | (296)  |
| Direct costs of      services              |                      | (359)             |                              | (3)                       |    | -       |                                                 | -  |    | (362)  |
| Reimbursed      expenses                   |                      | (105)             |                              | -                         |    | -       |                                                 | -  |    | (105)  |
| Selling, general and      administration   |                      | (125)             |                              | (51)                      |    | (20)    |                                                 | (24)  |    | (220)  |
| Research and      development              |                      | -                 |                              | (5)                       |    | (48)    |                                                 | -  |    | (53)  |
| Depreciation and      amortization         |                      | (30)              |                              | (15)                      |    | (6)     |                                                 | -  |    | (51)  |
| Restructuring charges -      net           |                      | -                 |                              | 2                         |    | -       |                                                 | 5  |    | 7  |
| Other income (expenses)      - net         |                      | 2                 |                              | -                         |    | 5       |                                                 | (7)  |    | -  |
| Equity earnings                            |                      | (1)               |                              | -                         |    | 54      |                                                 | (4)  |    | 49  |
| Segment (loss)      earnings               | $                         | (55)              | $                                 | 76                        | $       | 38      | $                                                    | (30)  | $  | 29  |
| Capital      expenditures                  | $                         | 37                | $                                 | -                         | $       | 4       | $                                                    | 10  | $  | 51  |
|                                                 |                                |                        |                                        |                                |              |              |                                                           |  |  |  |  |  |  |

|                              |                             |                                | Additions  |                     |
|----------------------------------------|---------------------------------------|------------------------------------------|-----------------|-------------------------------|
|                              | Total Assets      | Property, Plant and      Equipment  | Goodwill   | Equity      Investments  |
| MDS Pharma      Services          | 2008                             | $                                   | 390        | $                        | 29  | $  | -  | $  | -  |
| 2007                              |                             | 835                                 |       | 48                       |    | -  |    | 3  |
| MDS Nordion                       | 2008                             | $                                   | 385        | $                        | 8  | $  | -  | $  | -  |
| 2007                              |                             | 1,014                               |       | 8                        |    | -  |    | -  |
| MDS Analytical      Technologies  | 2008                             | $                                   | 833        | $                        | 10  | $  | 25  | $  | 13  |
|                              | 2007                             |                                | 857        |                     | 8  |    | 364  |    | 38  |
| Corporate and      Other          | 2008                             | $                                   | 264        | $                        | 5  | $  | -  | $  | 5  |
|                              | 2007                             |                                | 537        |                     | 7  |    | -  |    | 11  |
| Total                             | 2008                             | $                                   | 1,872      | $                        | 52  | $  | 25  | $  | 18  |
|                              | 2007                             |                                | 3,243      |                     | 71  |    | 364  |    | 52  |

|                          |    |    | Canada  |    | US      |    | Europe  |    | Asia    |    | Other   |    | Total  |
|------------------------------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|-------------|
| MDS Pharma      Services      | 2008    | $       | 17      | $       | 297     | $       | 249     | $       | 17      | $       | 2       | $       | 582    |
| 2007                          |    | 26      |    | 284     |    | 241     |    | 15      |    | 2       |    | 568     |
| 2006                          |    | 28      |    | 288     |    | 217     |    | 9       |    | 21      |    | 563     |
| MDS Nordion                   | 2008    | $       | 10      | $       | 169     | $       | 36      | $       | 57      | $       | 24      | $       | 296    |
| 2007                          |    | 10      |    | 162     |    | 45      |    | 47      |    | 26      |    | 290     |
|                          | 2006    |    | 11      |    | 164     |    | 45      |    | 57      |    | 18      |    | 295    |
| MDS Analytical Technologies*  | 2008    | $       | 79      | $       | 174     | $       | 109     | $       | 70      | $       | 5       | $       | 437    |
|                          | 2007    |    | 71      |    | 151     |    | 81      |    | 46      |    | 3       |    | 352    |
|                          | 2006    |    | 58      |    | 75      |    | 37      |    | 29      |    | 3       |    | 202    |
| Total                         | 2008    | $       | 106     | $       | 640     | $       | 394     | $       | 144     | $       | 31      | $       | 1,315  |
|                          | 2007    |    | 107     |    | 597     |    | 367     |    | 108     | $       | 31      |    | 1,210  |
|                          | 2006    |    | 97      |    | 527     |    | 299     |    | 95      |    | 42      |    | 1,060  |

|                         |    |    | Canada  |    | US      |    | Europe  |    | Asia    |    | Other   |    | Total  |
|-----------------------------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|-------------|
| MDS Pharma Services          | 2008    | $       | 19      | $       | 78      | $       | 49      | $       | 4       | $       | -       | $       | 150    |
| 2007                         |    | 41      |    | 81      |    | 54      |    | 2       |    | -       |    | 178     |
| MDS Nordion                  | 2008    | $       | 83      | $       | -       | $       | 8       | $       | -       | $       | -       | $       | 91     |
| 2007                         |    | 707     |    | -       |    | 6       |    | -       |    | -       |    | 713     |
| MDS Analytical Technologies  | 2008    | $       | 14      | $       | 9       | $       | -       | $       | 2       | $       | -       | $       | 25     |
| 2007                         |    | 15      |    | 12      |    | 2       |    | 2       |    | -       |    | 31      |
| Corporate and Other          | 2008    | $       | 35      | $       | -       | $       | -       | $       | -       | $       | -       | $       | 35     |
| 2007                         |    | 53      |    | -       |    | -       |    | -       |    | -       |    | 53      |
| Total                        | 2008    | $       | 151     | $       | 87      | $       | 57      | $       | 6       | $       | -       | $       | 301    |
| 2007                         |    | 816     |    | 93      |    | 62      |    | 4       |    | -       |    | 975     |

|                         |    |    | Canada  |    | US      |    | Europe  |    | Total  |
|-----------------------------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|--------------|-------------|
| MDS Pharma Services          | 2008    | $       | -       | $       | 37      | $       | -       | $       | 37     |
| 2007                         |    | 142     |    | 246     |    | 16      |    | 404     |
| MDS Nordion                  | 2008    | $       | 2       | $       | -       | $       | -       | $       | 2      |
| 2007                         |    | 2       |    | -       |    | -       |    | 2       |
| MDS Analytical Technologies  | 2008    | $       | 10      | $       | 403     | $       | -       | $       | 413    |
|                         | 2007    |    | 12      |    | 364     |    | -       |    | 376    |
| Total                        | 2008    | $       | 12      | $       | 440     | $       | -       | $       | 452    |
|                         | 2007    |    | 156     |    | 610     |    | 16      |    | 782    |

|        |    |  OperatingLeases |    | Other      ContractualCommitments |
|------------------|--------------|-----------------------|--------------|-----------------------------------|
| 2009        | $       | 30               | $       | 56                           |
| 2010        |    | 28               |    | 41                           |
| 2011        |    | 23               |    | 39                           |
| 2012        |    | 18               |    | 33                           |
| 2013        |    | 13               |    | 19                           |
| Thereafter  |    | 23               |    | 166                          |
|        | $       | 135              | $       | 354                          |

|                                            | 2008CarryingAmount  | 2008Fair       Value  | 2007CarryingAmount  | 2007FairValue  |
|------------------------------------------------------|--------------------------|---------------------------------|--------------------------|---------------------|
| Net asset      (liability) position             |                |                       |                |           |
| Currency forward and      option - assets       | $                   | 1                          | $                   | 1              | $  | 7  | $  | 7  |
| Currency forward and      option - liabilities  | $                   | (9)                        | $                   | (9)            | $  | (12)  | $  | (12)  |
| Interest rate swap and      option contracts    | $                   | -                          | $                   | -              | $  | (1)  | $  | (1)  |

Long-terminvestments and other assets – Asset Backed Commercial Paper

| Consolidated      Statement of Financial Position     |    |                    |    |                    |       |    |              |
|-------------------------------------------------------|--------------|------------------------------|--------------|------------------------------|-----------------|--------------|------------------------|
| As of      October 31                            |    | 2008US       GAAP  |    | ReconcilingAdjustments  | Reference  |    | 2008CanadianGAAP  |
|  Assets                                          |    |                    |    |                    |       |    |              |
| Current assets                                        |    |                    |    |                    |       |    |              |
| Cash and cash equivalents                             | $       | 120                     | $       | 8                       | a          | $       | 128               |
| Accounts receivable, net                              |    | 264                     |    | 1                       | a          |    | 265               |
| Notes receivable                                      |    | 72                      |    | -                       |       |    | 72                |
| Unbilled revenue                                      |    | 86                      |    | -                       |       |    | 86                |
| Inventories, net                                      |    | 85                      |    | 4                       | a          |    | 89                |
| Income taxes recoverable                              |    | 61                      |    | -                       |       |    | 61                |
| Current portion of deferred tax      assets           |    | 20                      |    | -                       |       |    | 20                |
| Prepaid expenses and other                            |    | 17                      |    | (1)                     | d          |    | 16                |
| Assets held for sale                                  |    | 6                       |    | -                       |       |    | 6                 |
| Total current      assets                             |    | 731                     |    | 12                      |       |    | 743               |
|                                                  |    |                    |    |                    |       |    |              |
| Restricted cash                                       |    | 13                      |    | -                       |       |    | 13                |
| Property, plant and equipment,      net               |    | 301                     |    | 3                       | a          |    | 304               |
| Deferred tax assets                                   |    | 95                      |    | -                       |       |    | 95                |
| Long-term investments and other      assets           |    | 125                     |    | 14                      | a,b,g      |    | 139               |
| Goodwill                                              |    | 452                     |    | 1                       | b,c        |    | 453               |
| Intangible assets, net                                |    | 155                     |    | 12                      | a          |    | 167               |
| Total      assets                                     | $       | 1,872                   | $       | 42                      |       | $       | 1,914             |
|                                                  |    |                    |    |                    |       |    |              |
| Liabilities and      Shareholders’ Equity       |    |                    |    |                    |       |    |              |
| Current      liabilities                              |    |                    |    |                    |       |    |              |
| Accounts payable and accrued      liabilities         | $       | 267                     | $       | 2                       | a,d,e,h    | $       | 269               |
| Current portion of deferred      revenue              |    | 79                      |    | -                       |       |    | 79                |
| Income taxes payable                                  |    | 1                       |    | 1                       | a          |    | 2                 |
| Current portion of long-term      debt                |    | 19                      |    | -                       |       |    | 19                |
| Current portion of deferred tax      liabilities      |    | 4                       |    | -                       |       |    | 4                 |
| Total current      liabilities                        |    | 370                     |    | 3                       |       |    | 373               |
|                                                  |    |                    |    |                    |       |    |              |
| Long-term debt                                        |    | 263                     |    | -                       |       |    | 263               |
| Deferred revenue                                      |    | 10                      |    | -                       |       |    | 10                |
| Other long-termobligations                            |    | 31                      |    | 1                       |       |    | 32                |
| Deferred tax liabilities                              |    | 108                     |    | 14                      | g,h        |    | 122               |
| Total      liabilities                                |    | 782                     |    | 18                      |       |    | 800               |
|                                                  |    |                    |    |                    |       |    |              |
| Shareholders’      equity                       |    |                    |    |                    |       |    |              |
| Share capital                                         |    | 489                     |    | 12                      | h          |    | 501               |
| Additional paid in capital                            |    | 75                      |    | (75)                    | h          |    | -                 |
| Retained earnings                                     |    | 301                     |    | 89                      | b,d,g,h    |    | 390               |
| Accumulated other comprehensive income                |    | 225                     |    | (2)                     | a,f,g      |    | 223               |
| Total shareholders’      equity                 |    | 1,090                   |    | 24                      |       |    | 1,114             |
| Total liabilities      and shareholders’ equity | $       | 1,872                   | $       | 42                      |       | $       | 1,914             |

| Consolidated Statement of      Financial Position  |    |                          |    |                    |
|---------------------------------------------------------|--------------|------------------------------------|--------------|------------------------------|
| As of October 31                                   |    | 2007USGAAP Restated (Note 2)  |    | ReconcilingAdjustments  |   |    | 2007Canadian GAAPRestated(Note 2)  |
| Assets                                             |    |                          |    |                    |    |    |    |
| Current      assets                                     |    |                          |    |                    |    |    |    |
| Cash and cash equivalents                               | $       | 222                           | $       | 13                      |    | $  | 235  |
| Short-term investments                                  |    |   102                    |    | -                       |    |    | 102  |
| Accounts receivable                                     |    |   287                    |    | (3)                     |    |    | 284  |
| Unbilled revenue                                        |    | 99                            |    | -                       |    |    | 99  |
| Inventories, net                                        |    | 128                           |    | 6                       |    |    | 134  |
| Income taxes recoverable                                |    | 54                            |    | -                       |    |    | 54  |
| Current portion of income      taxes                    |    | 45                            |    | -                       |    |    | 45  |
| Prepaid expenses and other                              |    | 22                            |    | (1)                     |    |    | 21  |
| Assets held for sale                                    |    | 1                             |    | -                       |    |    | 1  |
| Total current      assets                               |    | 960                           |    | 15                      |    |    | 975  |
|                                                    |    |                          |    |                    |    |    |    |
| Restricted cash                                         |    | 13                            |    | -                       |    |    | 13  |
| Property, plant and equipment,      net                 |    | 975                           |    | 4                       |    |    | 979  |
| Deferred tax assets                                     |    | 4                             |    | -                       |    |    | 4  |
| Long-term investments and other      assets             |    | 290                           |    | (6)                     |    |    | 284  |
| Goodwill                                                |    | 782                           |    | 15                      |    |    | 797  |
| Intangible assets, net                                  |    | 219                           |    | 18                      |    |    | 237  |
| Total      assets                                       | $       | 3,243                         | $       | 46                      |    | $  | 3,289  |
|                                                    |    |                          |    |                    |    |    |    |
| Liabilities and      Shareholders’ Equity         |    |                          |    |                    |    |    |    |
| urrent      liabilities                                 |    |                          |    |                    |    |    |    |
| Accounts payable and accrued      liabilities           | $       | 384                           | $       | 7                       |    | $  | 391  |
| Current portion of deferred      revenue                |    | 71                            |    | -                       |    |    | 71  |
| Income taxes payable                                    |    | 57                            |    | -                       |    |    | 57  |
| Current portion of long-term      debt                  |    | 94                            |    | -                       |    |    | 94  |
| Current portion of deferred tax      liabilities        |    | 10                            |    | -                       |    |    | 10  |
| Total current      liabilities                          |    | 616                           |    | 7                       |    |    | 623  |
|                                                    |    |                          |    |                    |    |    |    |
| Long-term debt                                          |    | 290                           |    | -                       |    |    | 290  |
| MAPLE financial liability                               |    | 161                           |    | -                       |    |    | 161  |
| Deferred revenue                                        |    | 17                            |    | (1)                     |    |    | 16  |
| Other long-termobligations                              |    | 30                            |    | (1)                     |    |    | 29  |
| Deferred tax liabilities                                |    | 188                           |    | 14                      |    |    | 202  |
| Minority interest                                       |    | -                             |    | 1                       |    |    | 1  |
| Total      liabilities                                  |    | 1,302                         |    | 20                      |    |    | 1,322  |
|                                                    |    |                          |    |                    |    |    |    |
| Shareholders’      equity                         |    |                          |    |                    |    |    |    |
| Share capital                                           |    | 493                           |    | 9                       |    |    | 502  |
| Additional paid-in capital                              |    |    72               |    | (72)                    |    |    | -  |
| Retained earnings                                       |    | 880                           |    | 103                     |    |    | 983  |
| Accumulated other comprehensive income                  |    | 496                           |    | (14)                    |    |    | 482  |
| Total shareholders’      equity                   |    | 1,941                         |    | 26                      |    |    | 1,967  |
| Total liabilities      and shareholders’ equity   | $       | 3,243                         | $       | 46                      |    | $  | 3,289  |

| Consolidated Statement of      operations                                                        |    |
|-------------------------------------------------------------------------------------------------------|--------------|
| Year ended October 31                                                                                 |    | 2008USGAAP  |    | ReconcilingItems  |    | 2008CanadianGAAP  | Reference  |
| Revenues                                                                                         |    |    |    |    |    |    |    |
| Products and services                                                                            | $       | 1,215  | $  | 27  | $  | 1,242  | a  |
| Reimbursement revenues                                                                           |    | 100  |    | -  |    | 100  |    |
|  Total      revenues                                                                        |    | 1,315  |    | 27  |    | 1,342  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Costs and expenses                                                                               |    |    |    |    |    |    |    |
| Direct cost of products                                                                          |    | (387)  |    | -  |    | (387)  |    |
| Direct cost of services                                                                          |    | (374)  |    | 11  |    | (363)  | a,b,c  |
| Reimbursed expenses                                                                              |    | (100)  |    | -  |    | (100)  |    |
| Selling,      general and administration                                                         |    | (280)  |    | (1)  |    | (281)  | a,e,h  |
| Research      and development                                                                    |    | (79)  |    | 35  |    | (44)  | a,b,c  |
| Depreciation      and amortization                                                               |    | (100)  |    | (13)  |    | (113)  | a,b  |
| MAPLE      Facilities lease reassessment:                                                        |    |    |    |    |    |    |    |
|         Write-off of construction-in-progress                                          |    | (501)  |    | -  |    | (501)  |    |
|         Write-off of financial liability                                               |    | 160  |    | -  |    | 160  |    |
| Other      impairment of long-lived assets                                                       |    | (11)  |    | -  |    | (11)  |    |
| Impairment of goodwill                                                                           |    | (320)  |    | (20)  |    | (340)  | b,c  |
| Restructuring      charges - net                                                                 |    | (13)  |    | -  |    | (13)  |    |
| Change in fair value of embedded          derivatives                             |    | (14)  |    | 15  |    | 1  |   d  |
| Other income (expenses) - net                                                                    |    | 11  |    | 3  |    | 14  | b  |
|  Total costs and      expenses                                                              |    | (2,008)  |    | 30  |    | (1,978)  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Operating (loss) income from          continuing      operations                  |    | (693)  |    | 57  |    | (636)  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Interest expense                                                                                 |    | (18)  |    | -  |    | (18)  |    |
| Interest income                                                                                  |    | 16  |    | -  |    | 16  |    |
| Change in fair value of interest rate      swaps                                                 |    | 2  |    | -  |    | 2  |    |
| Equity earnings (loss)                                                                           |    | 49  |    | (49)  |    | -  | a  |
| (Loss) income from continuing           operations      before income taxes  |    | (644)  |    | 8  |    | (636)  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Income tax (expense) recovery                                                                    |    |    |    |    |    |    |    |
|    - current                                                                           |    | (40)  |    | (18)  |    | (58)  | c  |
|    - deferred                                                                          |    | 131  |    | (4)  |    | 127  |    |
| Net (loss) income                                                                                | $       | (553)  | $  | (14)  | $  | (567)  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Basic (loss) income per share       -from continuing      operations                        | $       | (4.54)  | $  | (0.11)  |   $  | (4.65)  |    |
| Basic (loss) income per      share                                                               | $       | (4.54)  | $  | (0.11)  | $  | (4.65)  |    |
|                                                                                             |    |    |    |    |    |    |    |
| Diluted (loss) income per      share -from continuing      operations                       | $       | (4.54)  | $  | (0.11)  |   $  | (4.65)  |    |
| Diluted (loss) income per      share                                                             | $       | (4.54)  | $  | (0.11)  | $  | (4.65)  |    |

| Consolidated Statements Of Operations                                           |    |                         |
|--------------------------------------------------------------------------------------|--------------|-----------------------------------|
| Year ended October 31                                                                |    | 2007USGAAPRestated (Note 2)  |    | Recon.Items  |    | 2007CanadianGAAPRestated(Note 2)  |    | 2006USGAAPRestated(Note 2)  |    |   Recon.Items  |    | 2006CanadianGAAPRestated(Note 2)  |
| Revenues                                                                        |    |                         |    |    |    |    |    |    |    |    |    |    |
| Products and services                                                           | $       | 1,119                        | $  | 43  | $  | 1,162  | $  | 955  | $  | 47  | $  | 1,002  |
| Reimbursement revenues                                                          |    | 91                           |    | -  |    | 91  |    | 105  |    | -  |    | 105  |
|     Total      revenues                                          |    | 1,210                        |    | 43  |    | 1,253  |    | 1,060  |    | 47  |    | 1,107  |
| Costs and expenses                                                              |    |                         |    |    |    |    |    |    |    |    |    |    |
| Cost of revenues                                                                |    | (698)                        |    | 4  |    | (694)  |    | (658)  |    | 14  |    | (644)  |
| Reimbursed expenses                                                             |    | (91)                         |    | -  |    | (91)  |    | (105)  |    | -  |    | (105)  |
| Selling, general and      administration                                        |    | (265)                        |    | (5)  |    | (270)  |    | (220)  |    | (5)  |    | (225)  |
| Research and development                                                        |    | (68)                         |    | 39  |    | (29)  |    | (53)  |    | 35  |    | (18)  |
| Depreciation and amortization                                                   |    | (79)                         |    | (12)  |    | (91)  |    | (51)  |    | (12)  |    | (63)  |
| Restructuring charges - net                                                     |    | (37)                         |    | (3)  |    | (40)  |    | 7  |    | -  |    | 7  |
| Change in fair value of      embedded derivatives                          |    | 4                            |    | (4)  |    | -  |    | -  |    | -  |    | -  |
| Other expense - net                                                             |    | (84)                         |    | 7  |    | (77)  |    | -  |    | 25  |    | 25  |
|    Total costs      and expenses                                 |    | (1,318)                      |    | 26  |    | (1,292)  |    | (1,080)  |    | 57  |    | (1,023)  |
| Operating (loss) income from      continuing operations                         |    | (108)                        |    | 69  |    | (39)  |    | (20)  |    | 104  |    | 84  |
| Interest      expense                                                           |    | (15)                         |    | (1)  |    | (16)  |    | (14)  |    | -  |    | (14)  |
| Interestincome                                                                  |    | 25                           |    | -  |    | 25  |    | 15  |    | -  |    | 15  |
| Change in      fair value of interest rate    swaps                   |    | 1                            |    | -  |    | 1  |    | -  |    | -  |    | -  |
| Equity earnings      (loss)                                                     |    | 53                           |    | (53)  |    | -  |    | 49  |    | (49)  |    | -  |
| (Loss) income from continuing      operations before income taxes               |    | (44)                         |    | 15  |    | (29)  |    | 30  |    | 55  |    | 85  |
| Income taxes      (expense) recovery                                            |    |                         |    |    |    |    |    |    |    |    |    |    |
|     -      current                                               |    | 25                           |    | (18)  |    | 7  |    | 65  |    | (78)  |    | (13)  |
|     -      deferred                                              |    | (6)                          |    | 2  |    | (4)  |    | (43)  |    | 30  |    | (13)  |
| (Loss) income from continuing         operations                      |    | (25)                         |    | (1)  |    | (26)  |    | 52  |    | 7  |    | 59  |
| Income from discontinued         operations - net of income taxes     |    | 806                          |    | -  |    | 806  |    | 98  |    | -  |    | 98  |
| Net income (loss)                                                               | $       | 781                          | $  | (1)  | $  | 780  | $  | 150  | $  | 7  | $  | 157  |
| Basic earnings (loss) per      share: -from continuing operations               | $       | (0.19)                       | $  | (0.01)  | $  | (0.20)  | $  | 0.36  | $  | 0.06  | $  | 0.42  |
| - from discontinued      operations                                             |    | 6.12                         |    | -  |    | 6.12  |    | 0.68  |    | -  |    | 0.68  |
| Basic earnings (loss) per share                                                 | $       | 5.93                         | $  | (0.01)  | $  | 5.92  | $  | 1.04  | $  | 0.06  | $  | 1.10  |
|                                                                            |    |                         |    |    |    |    |    |    |    |    |    |    |
| Diluted earnings (loss) per      share:  -from continuing      operations  | $       | (0.19)                       | $  | (0.01)  |    | (0.20)  | $  | 0.36  | $  | 0.06  | $  | 0.42  |
| - from discontinued      operations                                             |    | 6.11                         |    | -  |    | 6.11  |    | 0.68  |    | -  |    | 0.68  |
| Diluted earnings (loss) per      share                                          | $       | 5.92                         | $  | (0.01)  | $  | 5.91  | $  | 1.04  | $  | 0.06  | $  | 1.10  |
|                                                                            |

|                                                                                                |    | 2008    |    | 2007 Restated (Note 2)  |    | 2006 Restated (Note 2)  |
|----------------------------------------------------------------------------------------------------------|--------------|--------------|--------------|------------------------------|--------------|------------------------------|
| Net (loss) income      from continuing operations in accordance with US GAAP                        | $       | (553)   | $       | (25)                    | $       | 52                      |
| Canadian GAAP      adjustments:                                                                |    |    |    |                    |    |                    |
|          Deferred development costs - net                                            |    | 7       |    | 8                       |    | 4                       |
| Deferred development costs written      off                                                         |    | (2)     |    | (3)                     |    | -                       |
| Mid term incentive planreversal                                                                     |    | 2       |    | (6)                     |    | -                       |
| Change in fair value of embedded      derivatives                                                   |    | 15      |    | (4)                     |    | -                       |
| Defined      benefit pension plans                                                                  |    | (10)    |    | 4                       |    | -                       |
| Unrealized      gains on foreign exchange contracts and interest rate swaps                         |    | -       |    | -                       |    | 5                       |
| Impairment      of goodwill                                                                         |    | (20)    |    | -                       |    | -                       |
| Reduction in      income tax expense arising from GAAP adjustments                                  |    | (6)     |    | -                       |    | (2)                     |
| Net (loss) income      from continuing operations in accordance with Canadian GAAP                  |    | (567)   |    | (26)                    |    | 59                      |
| Income from      discontinued operations in accordance with Canadian and US GAAP - net of      tax  |    | -       |    | 806                     |    | 98                      |
| Net (loss) income      in accordance with Canadian GAAP                                        | $       | (567)   | $       | 780                     | $       | 157                     |
|                                                                                                |    |    |    |                    |    |                    |
| Basic (loss)      earnings per share in accordance with Canadian GAAP                               |    |    |    |                    |    |                    |
|           - from continuing operations                                          | $       | (4.65)  | $       | (0.20)                  | $       | 0.42                    |
|           - from discontinued operations                                        |    | -       |    | 6.12                    |    | 0.68                    |
| Basic (loss)      earnings per share                                                                | $       | (4.65)  | $       | 5.92                    | $       | 1.10                    |
|                                                                                                |    |    |    |                    |    |                    |
| Diluted (loss)      earnings per share in accordance with Canadian GAAP                             |    |    |    |                    |    |                    |
|           - from continuing operations                                          | $       | (4.65)  | $       | (0.20)                  | $       | 0.42                    |
|           - from discontinued operations                                        |    | -       |    | 6.11                    |    | 0.68                    |
| Diluted (loss)      earnings per share                                                              | $       | (4.65)  | $       | 5.91                    | $       | 1.10                    |