**UNITED STATESSECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

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**FORM 10-K**

| **x**                                                                                                                                                              | ** ** | **ANNUAL REPORT PURSUANT TO SECTION 13 OR  15(d) OF THE**     |   |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------|--------|--------|
| ** **                                                                                                                                                         | ** ** | **SECURITIES EXCHANGE ACT OF 1934**                                     |   |   |
| **For the Fiscal Year Ended December 31, 2006**                                                                                                               |
| **or**                                                                                                                                                             |
| **o**                                                                                                                                                              | ** ** | **TRANSITION REPORT PURSUANT TO  SECTION 13 OR 15(d) OF THE** |   |   |
| ** **                                                                                                                                                         | ** ** | **SECURITIES EXCHANGE ACT OF 1934**                                     |   |   |
| **For to the transition period  from                      to** |

**Commissionfile number:  333-124100**

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**CDRV INVESTORS, INC.**

(Exact name of registrantas specified in its charter)

| **Delaware**                                                     |   | **56-2445503**                        |
|------------------------------------------------------------------|--------|---------------------------------------|
| (State or other  jurisdiction of  incorporation or organization) |   | (I.R.S. Employer  Identification No.) |
| **1310 Goshen Parkway**                                          |   | ** **                            |
| **PO. Box  2656**                                                |   | ** **                            |
| **West  Chester, PA**                                            |   | **19380**                             |
| (Address of  principal executive offices)                        |   | (Zip code)                            |

 

Registrant’s telephonenumber, including area code: **(610) 431-1700**

Securities registeredpursuant to Section 12(b) of the Act: **None**

Securities registeredpursuant to Section 12(g) of the Act: **None**

Indicate by check mark ifthe registrant is a well-known seasoned issuer, as defined in Rule 405 ofthe Securities Act. Yes o  No x

Indicate by check mark ifthe registrant is not required to file reports pursuant to Section 13 or15(d) of the Act. Yes x  No o

Indicate by check markwhether the registrant (1) has filed all reports required to be filed by Section 13or 15(d) of the Securities Exchange Act of 1934 during the preceding 12months (or for such shorter period that the registrant was required to filesuch reports), and (2) has been subject to such filing requirements forthe past 90 days. Yes o  No x

Indicate by check mark ifdisclosure of delinquent filers pursuant to Item 405 of Regulation S-K is notcontained herein, and will not be contained, to the best of registrant’s knowledge,in definitive proxy or information statements incorporated by reference in Part IIIof this Form 10-K or any amendment to this Form 10-K. x

Indicate by check markwhether the registrant is a large accelerated filer, an accelerated filer, or anon-accelerated filer. See definition of “accelerated filer and largeaccelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

| Large accelerated  filer o            Accelerated  filer o               Non-accelerated  filer x |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

Indicate by check mark whether the registrant is ashell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of December 31,2006, there was no established public market for the registrant’s common stock,par value $0.01 per share. The number of shares of the registrant’s commonstock outstanding at March 16, 2007 was 5,802,312.

**DOCUMENTS INCORPORATED BYREFERENCE**

**None**

 

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**TABLE OF CONTENTS**

|           | ** **                                                                                                         | **Page** |
|-----------|--------------------------------------------------------------------------------------------------------------------|----------|
|      | PART I                                                                                                        |     |   |   |
| ITEM 1.   | BUSINESS                                                                                                           |     | 1 |   |
| ITEM  1A. | RISK FACTORS                                                                                                       |     | 10 |   |
| ITEM 1B.  | UNRESOLVED STAFF COMMENTS                                                                                          |     | 17 |   |
| ITEM 2.   | PROPERTIES                                                                                                         |     | 17 |   |
| ITEM  3.  | LEGAL PROCEEDINGS                                                                                                  |     | 18 |   |
| ITEM 4.   | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                                                                |     | 18 |   |
|      | PART II                                                                                                       |     |   |   |
| ITEM 5.   | MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED  STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES |     | 19 |   |
| ITEM  6.  | SELECTED  FINANCIAL DATA                                                                                           |     | 20 |   |
| ITEM 7.   | MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL  CONDITION AND RESULTS OF OPERATIONS                        |     | 22 |   |
| ITEM 7A.  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET  RISK                                                        |     | 40 |   |
| ITEM 8.   | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                                                                        |     | 42 |   |
| ITEM 9.   | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON  ACCOUNTING AND FINANCIAL DISCLOSURE                              |     | 97 |   |
| ITEM 9A.  | CONTROLS AND PROCEDURES                                                                                            |     | 97 |   |
| ITEM  9B. | OTHER  INFORMATION                                                                                                 |     | 98 |   |
|      | PART III                                                                                                      |     |   |   |
| ITEM 10.  | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE                                                             |     | 99 |   |
| ITEM 11.  | EXECUTIVE COMPENSATION                                                                                             |     | 104 |   |
| ITEM 12.  | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND  MANAGEMENT AND RELATED STOCKHOLDER MATTERS                    |     | 117 |   |
| ITEM 13.  | CERTAIN RELATIONSHIPS, RELATED TRANSACTIONS AND  DIRECTOR INDEPENDENCE                                             |     | 119 |   |
| ITEM 14.  | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                                                             |     | 123 |   |
|      | PART IV                                                                                                       |     |   |   |
| ITEM 15.  | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES                                                                         |     | 124 |   |

 

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In this Form 10-K, unless the context requiresotherwise, references to the “Company,” “we,” “us” and “our” mean CDRVInvestors, Inc. and its consolidated subsidiaries. CDRV Investors, Inc.is the direct parent company of CDRV Investment Holdings Corporation and theultimate parent company of VWR International, Inc. (“VWR”).

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**PART I**

**ITEM 1.**                BUSINESS

**Overview**

We are a leader in the global laboratory supplyindustry. We provide distribution services to a highly fragmented supply chainby offering products from a wide range of manufacturers to a large number ofcustomers. Our business is highly diversified across products and services,geographic regions and customer segments. Products we distribute includechemicals, glassware, instruments, protective clothing and other assortedlaboratory products. We also provide certain services to some of our customers,which are primarily comprised of technical services, on-site storeroomservices, warehousing and furniture design, supply and installation. Wemaintain operations in more than 20 countries and process an average of 52,000order lines daily from 20 strategically located distribution centers. Ourprincipal customers are major pharmaceutical, biotechnology, chemical,technology, food processing and consumer product companies, universities andresearch institutes, governmental agencies, environmental organizations, andprimary and secondary schools.

The roots of our business date back to 1852. Followinga series of business combinations, VWR became part of Univar Corporation. In1986, VWR became a publicly-traded company following a spin-off from Univar andembarked on a substantial expansion program, which included internal growthinitiatives as well as acquisitions. VWR’s most significant acquisitionoccurred in 1995 when it purchased Baxter International’s industrialdistribution business, more than doubling its revenue base. In connection withthis acquisition, Merck KGaA acquired 49.9% of VWR’s outstanding shares and, in1999, Merck KGaA took VWR private by acquiring the remainder. During the periodfrom 1995 through 1999, Merck KGaA actively built its scientific suppliesdistribution business in Europe through a series of acquisitions. In 2001,Merck KGaA combined the operations of the two businesses, and in 2002,consolidated them under a common U.S. parent company, creating a leader in theglobal laboratory supply industry.

On April 7, 2004, VWR was acquired from MerckKGaA by our wholly-owned subsidiary, CDRV Holdings, Inc. (the “Acquisition”).In connection with the Acquisition, VWR issued $200.0 million of senior notesdue 2012 and $320.0 million of senior subordinated notes due 2014 (the “VWRNotes”) and entered into a senior secured credit facility (the “Senior SecuredCredit Facility”), consisting of a $150.0 million multi-currency revolvingcredit facility, as well as a U.S. dollar-denominated term loan and aEuro-denominated term loan. The term loans were initially $415.0 million and €145.0million in principal amount, respectively, which have been subsequently reducedthrough prepayments in July 2004, March 2006 and September 2006to $307.1 million and €107.3 million (approximately $141.6 millionas of December 31, 2006, on a U.S. dollar equivalent basis), respectively.

On December 16, 2004, we issued $481.0 millionaggregate principal amount at maturity ($299.4 million gross proceeds) of 95¤8%senior discount notes due 2015 (“Senior Discount Notes”). In addition, on December 14,2006, we issued $350.0 million of senior floating rate notes due 2011 (“SeniorFloating Rate Notes”). In connection with various transactions involving theissuance of the Senior Floating Rate Notes, we formed a new wholly-ownedsubsidiary, CDRV Investment Holdings Corporation, which assumed the obligationsunder the Senior Discount Notes in December 2006. See “Item 7—Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Indebtedness”for more information. Neither VWR nor CDRV Investment Holdings Corporationguarantees our obligations under the Senior Floating Rate Notes, but weguarantee CDRV Investment Holdings Corporation’s obligations under the SeniorDiscount Notes on an unsecured senior subordinated basis.

In 2004 and 2005, we executed restructuring programsin Europe and North America. In Europe, operations primarily in France, Germanyand the UK were rationalized, and in North America, certain parts of ourheadquarters and field operations functions were restructured. A significantportion of our 

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realized cost savings overthe last two years has been re-invested in the business in four primaryareas:  (1) corporate functions,including finance, internal audit and legal, (2) category management,including global sourcing, (3) sales force / specialist additions and (4) strategicacquisitions in Ireland, the Netherlands, Puerto Rico and Singapore.

We report our financialresults on the basis of the following three business segments: North Americanlaboratory distribution (“North American Lab”), European laboratorydistribution (“European Lab”), and Science Education. In addition, we havesmall, but growing, Asia Pacific operations, which for purposes of externalreporting, is embedded within the North American Lab and European Lab segments.Both the North American Lab and European Lab segments are comprised of thedistribution of supplies to customers in major pharmaceutical, biotechnology,chemical, technology, food processing and consumer products industries, as wellas governmental agencies, universities and research institutes andenvironmental organizations. Science Education is comprised of the manufactureand distribution of scientific supplies and specialized kits principally toprimary and secondary schools in North America. See Note 18 under “Item 8—FinancialStatements and Supplementary Data” for further information about our businesssegments.

**Customers and Markets**

Industry trade associations estimate that the 2006industry-wide revenues of the global laboratory supply industry in which ourNorth American Lab and European Lab segments primarily operate wereapproximately $27 billion. Our net sales in these segments are influenced by,but not directly correlated with, the growth of research and developmentspending from a diversified collection of end-users, and we expect that resultsmay vary by type of end-user.

In relation to our Science Education segment, we estimatethat the 2006 sales of scientific supplies to primary and secondary schools inNorth America were approximately $600 million. Industry sales levels aresubject to fluctuations driven by changes in state and local governmentfunding, the timing of the state-by-state new textbook adoption cycle andpopulation changes. Accordingly, our Science Education segment is seasonal,with increased net sales and operating income in the third quarter, inconnection with school purchases of supplies in preparation for the beginningof the new school year.

We maintain a highly fragmented and stable customerbase across a diversified array of end users and geographies. Our customersinclude major pharmaceutical, biotechnology, chemical, technology, foodprocessing and consumer products companies. They also include universities andresearch institutes, governmental agencies, environmental organizations andprimary and secondary schools. While we serve our customers locally through ouroperations in North America, Europe and Asia Pacific, we also export productsfrom these locations to customers in Central America, South America, BritishCommonwealth countries, Africa, the Middle East and the Pacific Rim. See Note18 under “Item 8—Financial Statements and Supplementary Data” for furtherinformation about our geographic regions.

We seek to be the principal provider of scientificsupplies to our customer base. We are a principal provider of scientificsupplies to a majority of the world’s 20 largest pharmaceutical companies, aswell as three of the largest North American biotechnology buying consortia.Pharmaceutical and biotechnology companies represented approximately 35% of our2006 net sales, and together with universities and colleges, accounted forapproximately 47% of our 2006 net sales. In 2006, our top 20 customersaccounted for approximately 22% of our net sales, with no single customerrepresenting more than 3% of our net sales.

We also provide certainservices to some of our customers, which are primarily comprised of technicalservices, on-site storeroom services, warehousing and furniture design, supplyand installation. Service revenues represent only a small part of our business.

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**Products**

We offer a wide range of products, includingchemicals, glassware, plasticware, instruments and other laboratory equipment,protective clothing, laboratory furniture and scientific educational materialsfor primary and secondary schools. Our average order size is less than $500.Many of our products, including chemicals, laboratory consumables, productionsupplies and science education products, are consumable in nature. Theseproducts are basic and essential supplies required by research laboratories andrepresented approximately 75% of our net sales in 2004, 2005 and 2006. We alsooffer durable products, including centrifuges, fume hoods and workstations,ovens, microscopes and cold storage equipment.

Thefollowing table summarizes our product lines:

| Line                        | ** ** | **Products**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
|-----------------------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| General Laboratory Supplies |       | Disposable laboratory products, including  plasticware, glassware, liquid handling products and general supplies.  Products are primarily used in research and development and all areas of test  and measurement. Examples are bottles, vials, petri dishes, multi-well plates,  tubes, beakers, flasks, cylinders, pipettors, pipet tips, shippers, stir  bars, timers, slides and various apparatus. Among other uses, general  laboratory supplies are used to transport, store, grow, filter and observe  cellular and microbiological products.                                                                              |
| Chemicals                   |       | Includes acids,  solvents, salts, bases, solutions, buffers, standards, dyes, stains, organics  and inorganics that are used in customer research and development, analytical  testing and pharma production applications. All products classified as  chemicals have a chemical formula component per the American Chemical Society  classification and have been designated by regulation as requiring Material  Safety Data Sheets when shipped and sold.                                                                                                                                                                       |
| Equipment/ Instrumentation/ |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Furniture                   |       | Includes all storage and testing “capital goods  purchased” products used in research and development and testing. Equipment  includes electrically powered products such as freezers, refrigerators,  incubators, ovens, hot plates, stirrers, shakers, pumps, water systems,  circulators, chillers, heat blocks and autoclaves. Instruments include  electrically powered test and measurement devices such as balances, pH  meters, centrifuges, spectrophotometers, readers, titrators, refractometers  and microscopes. Furniture includes cabinets, work stations, shelves, sinks,  eye-wash stations and chairs. |
| Production Supplies and     |       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Safety                      |       | Disposable products that are used to protect  products from being contaminated by employees in “cleanroom” operations and  to protect employees’ health from the products that they use in laboratory  research, testing and production operations. Production supplies and safety  products include disposable apparel, gloves, face masks, eye protection,  environmental monitoring and detecting products, ergonomic products, wipers,  disinfectants and cleaners.                                                                                                                                             |

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| Life Science Supplies |   | Includes consumable  biologicals such as microbiology media, molecular biology reagents, cell  culture media, cell culture serum, electrophoresis reagents, PCR reagents,  restriction enzymes and antibodies. All products classified as life science  supplies are used by customers in biological research and development, QA/QC  testing and BioPharma production applications. Life sciences supplies are  used to grow, stop the growth, preserve and separate cellular, molecular and  microbiological items of interest. |
|-----------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Science Education     |   | Includes educational  supplies, products, specimens, specialized science kits and support products.                                                                                                                                                                                                                                                                                                                                                                                                                               |
| Other                 |   | Technical and site  services and third-party procurement and distribution of other non-core  products.                                                                                                                                                                                                                                                                                                                                                                                                                            |

 

We distribute productssourced from a wide array of manufacturers and are a primary distributor for avariety of major manufacturers. We offer customers a large selection ofproducts designed to meet their individual needs for a combination of premium, “value-for-money”and lower-cost products. Approximately 86% of our current global net salesconsist of branded products, with the remainder comprised of private labelproducts, primarily in the “value-for-money” category.

**Services**

We offer a varietyof services to customers ranging from single-site laboratories and / orproduction facilities to large multinational corporations with multiplelocations. These services cover a broad range of customer needs and include:

·       TechnicalServices—Validation and calibration services for various pieces of laboratoryequipment and instrumentation; and

·       LaboratoryDesign and Installation—Design, supply and installation of laboratory fixturesand furniture (cabinetry, workstations, fume hoods) for new lab constructionand renovations; and

·       SiteServices—Provision of various on-site services including storeroom management,product delivery, usage tracking, order replenishment and billing through useof our on-site personnel, storeroom management systems, hazardous materialstracking and third-party procurement services.

Recent acquisitions by theCompany have had a strong service focus. In April 2005, we acquired bothAGB Scientific Ltd. (“AGB”) in Ireland and Advanced Instruments Sales &Service, Inc. (“AI”) in Puerto Rico. Both of these businesses have theleading technical services platform in their respective geographies forlaboratory equipment and instrumentation including calibration and validationservices. In mid-2005, we also acquired Technical Service Lab B.V. (“TSL”)in the Netherlands. TSL is a leading service provider in the Netherlands andBelgium for the calibration of small pieces of lab equipment. Our services strategyis to augment our strong distribution platform with symbiotic servicesbusinesses to create profitable growth opportunities.

**DistributionNetwork**

Our distribution network consists of 20 strategicallylocated distribution centers and various smaller regional service centers and “just-in-time”facilities for customer-specific requirements. The distribution centers receiveproducts from manufacturers, manage inventory and fill and ship customerorders. 

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Customer contact centershave responsibility for order entry and customer service. We also contract withMerck KGaA and other third parties to ship products directly to our customersbased on our instructions.

Thetable below lists our 20 strategically located distribution centers:

| **North America**            |   | **Europe &  Asia Pacific** |
|------------------------------|--------|-------------------------------------|
| Batavia, Illinois            |   | Briare, France                      |
| Bridgeport, New  Jersey      |   | Bruchsal, Germany                   |
| Brisbane, California         |   | Darmstadt, Germany                  |
| Buffalo, New York            |   | Dublin, Ireland                     |
| Denver, Colorado             |   | Haasrode, Belgium                   |
| Manati, Puerto Rico          |   | Karlskoga, Sweden                   |
| Mexico City, Mexico          |   | Lutterworth, United Kingdom         |
| Mississauga, Ontario, Canada |   | Milan, Italy                        |
| Rochester, New York          |   | Mollet del Valles, Spain            |
| Suwanee, Georgia             |   | Singapore                           |

 

Our distribution centers are operated with warehousemanagement systems, most of which are paperless. The paperless system usesradio frequency hand-held electronic devices and bar-coded labels that identifylocation, routing and inventory picking and replacement, allowing us to monitorinventory and track individual customer orders throughout our distributionsystem. These systems provide high levels of customer service while allowing usto operate the centers efficiently and economically.

Our regional service centers are adjacent to selectedcustomer locations and are designed to supply a limited number of products tothose customers that require this level of service. We also operate“just-in-time” facilities at or near customer sites to meet customer needspromptly.

Orders can be placed by a variety of means, includingby telephone and the Internet. We employ sophisticated telephone and softwaretechnology to manage calls from customers. In many distribution centers,incoming calls are automatically routed to a customer contact center and thecustomer service representative that can most efficiently respond to a customerinquiry or order; detailed customer information is then automatically providedto the customer service representative taking the call.

We ship products primarilythrough third-party carriers, such as UPS, DHL, FedEx and others.

**Sales and Marketing**

We market to customers through our global sales force,our websites, and our library of catalogs. We have a global sales, salessupport, customer service, marketing and category management force of over2,900 employees around the world. Supporting the field sales organization arespecialist groups for e-business integrations, customized services, laboratoryfurniture, safety, environment, microbiology, chromatography and life science.

The Internet has become an increasingly important toolfor us. During 2006, approximately 30% of our net sales were derived frome-business sales and marketing channels. Our website features a fully indexedand searchable catalog covering our entire product line, is available in 11languages and has been custom-designed for 20 countries. This electroniccatalog includes product descriptions, technical specifications andcross-referenced data in a variety of different languages through individualcountry sites. This website allows customers to enter orders directly andenables us to communicate new product releases, promotions and other news toour customers.

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In addition to our websites, we have, as part of ourintegrated business services capability, a growing e-business capabilitythat covers order creation, authorization, status, billing and reporting. Thesecapabilities provide direct data transfer to customers’ systems and integrationwith third-party marketplaces used by some of our customers.

We also provide printedcatalogs and other printed materials. Our general catalogs are printed in 11languages and include up to 47,000 products per issue. The general catalogs aresupplemented by several specialty catalogs for specific product lines.

**Suppliers**

We distribute products from a wide range ofmanufacturers. This includes a majority of the major manufacturers oflaboratory chemicals, glassware, plasticware, instruments and other laboratoryequipment, protective clothing and laboratory furniture who sell throughdistributors. In many cases, we believe we are a principal distributor forthese major manufacturers. We are also a key distributor of Merck KGaA’s chemicalproducts in the laboratory field in many Western European countries. Merck KGaAsupplied products accounted for approximately 13% of our net sales in 2006.This represents approximately 7% and 25% of our North American Lab and EuropeanLab net sales, respectively. Our distribution arrangements with Merck KGaA wereentered into at the time of the Acquisition and are summarized below.

***Merck KGaA EuropeanDistribution Agreement.******  ***In connectionwith the Acquisition, we entered into a European distribution agreement withMerck KGaA. The purchase prices and purchase targets included in thedistribution agreement are agreed upon annually, taking into account market,economic and regulatory developments or reasonably foreseeable extraordinaryevents that are likely to have an impact on the industry pricing or salesgrowth in relevant products and market segments.

The initial term of the agreement is five years. Wemay extend the agreement for a second five-year term if we satisfy certainconditions, including annual purchase targets which, to date, we have exceeded.Merck KGaA has the right to terminate the distribution agreement if certainevents occur, including, among others, if we acquire a controlling interest incertain Merck KGaA competitors, or certain Merck KGaA competitors acquire acontrolling interest in us.

***Other Merck KGaADistribution Agreements.******  ***In connectionwith the Acquisition, we entered into a five-year distribution agreement withMerck KGaA to distribute certain chemical products in North America. Theagreement automatically extends for a second five-year term unless either partysubmits a termination notice at least 12 months prior to the expiration of theinitial term. Merck KGaA may terminate the distribution agreement if certainevents occur, including, among others, if we acquire a controlling interest incertain competitive manufacturers.

In connection with theAcquisition, we also entered into other distribution agreements with MerckKGaA, including five-year distribution agreements with Merck KGaA to distributeits bioscience products in Europe and North America. In addition, we enteredinto a supply agreement with Merck KGaA, pursuant to which it agreed to continueto manufacture certain of our private label products for an initial period ofthree years from April 7, 2004, and thereafter to provide technicalassistance in transitioning their manufacture to other manufacturers. During2005, this agreement was extended through December 31, 2007.

**Manufacturing**

We have specializedmanufacturing facilities in Briare, France; Haasrode, Belgium; Buffalo, NewYork and Rochester, New York. The Briare site repackages chemicals and alimited assortment of our branded glassware and also produces certain of ourbranded chemicals. The Haasrode site also produces 

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ourbranded chemicals. Our facility in Buffalo, New York assembles specialized kitsfor our science education customers. The Rochester site is involved in thepreparation of educational and natural science products. Products manufacturedby us accounted for approximately 3% of our net sales in 2006.

**InformationTechnology and Other Services**

Prior to the Acquisition, we and Merck KGaA hadhistorically performed certain information technology functions for each other.In order to maintain continuous and efficient operations, effective as of April 7,2004, we entered into an information services master agreement with Merck KGaAto maintain these relationships following the Acquisition until such time asthese services can be obtained internally or from other sources. We and MerckKGaA have continued to provide certain information technology services to eachother consistent with the arrangements in place prior to the Acquisition,including Merck KGaA’s operation and support of the main enterprise resourceplanning and business warehouse software and databases for our Europeancompanies. The information services master agreement has an initial five-yearterm and will expire in April 2009, although individual services may beterminated during this term following a notice period. The Company continues todepend on Merck KGaA to host certain enterprise systems, fulfill hardwaresupport requirements and conduct related information technology functions, suchas data archival.

Merck KGaA may terminate the information servicesmaster agreement if certain events occur including, among others, if we acquirea controlling interest in certain competitive manufacturers, or if certainMerck KGaA competitors acquire a controlling interest in us.

Under the terms of an agreement that expires on December 31,2007, Merck KGaA continues to provide logistics services to certain of oursubsidiaries. Unless earlier terminated following a notice period, suchlogistics service arrangements will be automatically renewed for an additionalthree years.

Certain subsidiaries ofMerck KGaA and certain of our subsidiaries have continued to lease or subleasefrom one another, or otherwise share, space in various offices and warehousesin Europe since the completion of the Acquisition. The terms of these leasingand subleasing arrangements range from less than one year to up to six or moreyears and are generally at market rents and conditions. Certain other existingcontracts with Merck KGaA have also remained in place since the Acquisition.

**Trademarks andTrade Names**

We have more than 50 different registered andunregistered trademarks and service marks for our products and services.Generally, registered trademarks have perpetual life, provided that they arerenewed on a timely basis and continue to be used properly as trademarks,subject only to the rights of third parties to seek cancellation of the marks.

A significant number of our marks were owned by MerckKGaA. In connection with the Acquisition, Merck KGaA agreed that it wouldtransfer, and cause its affiliates to transfer, to us, the ownership ofregistrations and applications for marks owned by a Merck KGaA entity but usedprimarily in our business. Substantially all of such transfers have been made.We have not registered and in some cases do not own the existing applicationsand registrations for our material trademarks or service marks in every countryin which we do business.

Our business is notdependent to a material degree on patents, copyrights or trade secrets althoughwe consider our catalogs, websites and proprietary software integral to ouroperations. Although we believe we have adequate policies and procedures inplace to protect our intellectual property, we have not sought patentprotection for our processes nor have we registered the copyrights in any ofour catalogues, websites or proprietary software. Other than licenses tocommercially available third-party software, we have no licenses tointellectual property that are significant to the business.

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**Competition**

We operate in a highly competitive environment. Wecompete in the laboratory supplies distribution business primarily with twoother major distributors, Thermo Fisher Scientific Inc. and Sigma AldrichCorporation. We also compete with many smaller regional, local and specialtydistributors, as well as with manufacturers selling directly to theircustomers. Competitive factors include price, service and delivery, breadth ofproduct line, customer support, e-business capabilities and the ability to meetthe special requirements of customers. We believe we compete effectively on allof these factors.

Some of our competitorsare increasing their manufacturing operations both internally and throughacquisitions of manufacturers, including manufacturers that supply products tous. To date, we have not experienced an adverse impact on our ability tocontinue to source products from manufacturers that have been verticallyintegrated, although there is no assurance that we will not experience such animpact in the future.

**GovernmentRegulation**

Some of the products weoffer and our operations are subject to a number of complex and stringent lawsand regulations governing the production, handling, transportation, import,export and distribution of chemicals, drugs and other similar products,including the operating and security standards of the United States DrugEnforcement Administration, the Bureau of Alcohol, Tobacco, Firearms andExplosives, the Food and Drug Administration, the Bureau of Industry andSecurity and various state boards of pharmacy as well as comparable state andforeign agencies. In addition, our logistics activities must comply with the rules andregulations of the Department of Transportation, the Federal AviationAdministration and similar foreign agencies. While we believe we are incompliance in all material respects with such laws and regulations, anynon-compliance could result in substantial fines or otherwise restrict our abilityto provide competitive distribution services and thereby have an adverse impacton our financial condition. For information on environmental, health and safetymatters, see below under “—Environmental, Health and Safety Matters.”

**Employees**

As of December 31,2006, we had approximately 6,300 employees, including approximately 3,600employees in North America and approximately 2,700 employees in Europe. As of December 31,2006, approximately 6% of our employees in North America are represented byunions, and virtually all of our employees in Europe are represented by workers’councils and/or unions. While we believe our relations with our employees aregood, there can be no assurance that further union expansion will not occur andcause increased future costs.

**Environmental,Health and Safety Matters**

We are subject to a broad range of foreign, federal,state and local environmental, health and safety laws and regulations,including those pertaining to air emissions, water discharges, the handling,disposal and transport of solid and hazardous materials and wastes, theinvestigation and remediation of contamination and otherwise relating to healthand safety and the protection of the environment and natural resources. As ourglobal operations involve and have involved the handling, transport anddistribution of materials that are or could be classified as toxic orhazardous, there is some risk of contamination and environmental damageinherent in our operations and the products we handle, transport and distribute.Our environmental, health and safety liabilities and obligations may result insignificant capital expenditures and other costs, which could negatively impactour business, financial condition and results of operations. We may be fined orpenalized by regulators for failing to comply with environmental, health andsafety laws and regulations. In addition, contamination resulting from our 

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current or past operationsmay trigger investigation or remediation obligations, which may have a materialimpact on our business, financial condition and results of operations.

Based on currentinformation, we believe that any costs we may incur relating to environmentalmatters will not be material. We cannot be certain, however, thatidentification of presently unidentified environmental conditions, morevigorous enforcement by regulatory authorities or other unanticipated eventswill not arise in the future and give rise to additional environmentalliabilities, compliance costs or penalties which could have a material impacton our business, financial condition and results of operations. In addition,environmental laws and regulations are constantly evolving and it is notpossible to predict accurately the effect they may have in future periods.

**Available Information**

We file or furnish annual and quarterly reports andother information with or to the SEC. You may read and copy any documents wefile at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C.20549. Please call the SEC at 1-800-SEC-0330 for furtherinformation on the public reference room. Our SEC filings are also available tothe public free of charge at the SEC’s website at*www.sec.gov.*

You may also access ourpress releases, financial information and reports filed with or furnished tothe SEC (for example, our Annual Report on Form 10-K, our QuarterlyReports on Form 10-Q and our Current Reports on Form 8-Kand any amendments to those forms) online at *www.vwr.com.*Copies of any documents on our website are available without charge, andreports filed with or furnished to the SEC will be available as soon asreasonably practicable after they are filed with or furnished to the SEC. Theinformation found on our website is not part of this or any other report filedwith or furnished to the SEC.

**CorporateInformation**

Our principal executiveoffices are located at 1310 Goshen Parkway, P.O. Box 2656, West Chester,PA 19380 and our telephone number is (610) 431-1700. Our Internet websiteis located at *www.vwr.com.*

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**ITEM 1A.**   RISKFACTORS

***Ourbusiness is subject to a number of important risks and uncertainties that aredescribed below. You should carefully consider these risks and all otherinformation included in this Annual Report on Form 10-K.***

**Risk Related to OurCapital Structure**

**We have substantial existing debt and may incursubstantial additional debt, which could adversely affect our financial healthand our ability to obtain financing in the future, react to changes in ourbusiness and make payments on our debt.**

As of December 31, 2006, we had an aggregateprincipal amount of debt outstanding of $1,687.6 million.

The agreements governing our debt permit us to incuror guarantee additional indebtedness, including indebtedness under the SeniorSecured Credit Facility, subject to specified limitations. We have additionalborrowing capacity on a revolving credit basis under the Senior Secured CreditFacility of $140.5 million as of December 31, 2006, which theselimitations permit us to incur. We may incur substantial additional debt in thefuture.

Our substantialdebt could have important consequences to us. Because of our substantial debt:

·       ourability to engage in acquisitions without raising additional equity orobtaining additional debt financing may be impaired in the future;

·       ourability to obtain additional financing for working capital, capitalexpenditures, acquisitions or general corporate purposes and our ability tosatisfy our obligations with respect to our indebtedness may be impaired in thefuture;

·       asubstantial portion of our cash flow from operations must be dedicated to thepayment of principal and interest on our indebtedness, thereby reducing thefunds available to us for other purposes;

·       wewill be exposed to the risk of increased interest rates because a portion ofour borrowings will be at variable rates of interest; and

·       ourflexibility to adjust to changing market conditions and ability to withstandcompetitive pressures could be limited, and we may be more vulnerable to adownturn in general economic conditions or our business or be unable to carryout capital spending that is necessary or important to our growth strategy andour efforts to improve operating margins.

The Company is the sole obligor under the SeniorFloating Rate Notes and guarantees the obligations under the Senior DiscountNotes of CDRV Investment Holdings Corporation on an unsecured seniorsubordinated basis. As holding companies, neitherthe Company nor CDRV Investment Holdings Corporation has independent operationsor material assets other than our ownership of the common stock of ourrespective subsidiaries and we both depend entirely on cash from oursubsidiaries to satisfy our debt obligations. The Company’s and CDRVInvestment Holdings Corporation’s subsidiaries do not guarantee the respective obligationsunder the Senior Floating Rate Notes and Senior Discount Notes and do not haveany obligation with respect to these debt obligations. The Senior Floating RateNotes and Senior Discount Notes are structurally subordinated to the debt andliabilities of our existing and future subsidiaries, including borrowings underthe Senior Secured Credit Facility and the VWR Notes. The debt obligations ofour subsidiaries significantly restrict our ability to pay cash interest on theSenior Floating Rate Notes.

The agreements andinstruments governing our debt contain certain restrictions and limitationsthat could significantly impact our ability to operate our business.

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**Our ability to generate the significant amount of cashneeded to pay interest and principal on our debt when due and our ability torefinance all or a portion of our indebtedness or obtain additional financing,may depend on many factors beyond our control.**

Our ability to makescheduled payments or to refinance our obligations with respect to our debtdepends on our financial and operating performance, which, in turn, is subjectto prevailing economic and competitive conditions and to the following financialand business factors, some of which may be beyond our control:

·       operatingdifficulties;

·       increasedoperating costs;

·       decreaseddemand for our products;

·       marketcyclicality;

·       productprices;

·       theresponse of competitors;

·       regulatorydevelopments;

·       failureto successfully integrate acquisitions; and

·       delaysin implementing strategic projects.

If our cash flow andcapital resources are insufficient to fund our debt service obligations, we maybe forced to further reduce or delay capital expenditures, sell assets or seekto obtain additional equity capital, or restructure our debt. In the future,our cash flow and capital resources may not be sufficient for payments ofinterest on and principal of our debt, and such alternative measures may not besuccessful and may not permit us to meet our scheduled debt serviceobligations. We also cannot assure you that we will be able to refinance any ofour indebtedness or obtain additional financing, particularly because of ourhigh levels of debt and the debt incurrence restrictions imposed by theagreements governing our debt, as well as prevailing market conditions. In theabsence of such operating results and resources, we could face substantialliquidity problems and might be required to dispose of material assets oroperations to meet our debt service and other obligations. If required, wecannot be sure as to the timing of such sales or the proceeds that we couldrealize therefrom.

**Risk Related to OurBusiness**

**A significantstockholder controls our business and its interests may not be in line withyours.**

As of March 16, 2007,Clayton, Dubilier & Rice Fund VI Limited Partnership (“CD&R FundVI”) is a significant stockholder that beneficially owns approximately 70.3% ofour outstanding common stock and exercises control over matters requiringstockholders’ approval and control over our policies and affairs. It has theright to nominate for election all members of our Board of Directors. Inaddition, Clayton, Dubilier & Rice, Inc. (“CD&R”), whichmanages CD&R Fund VI, provides us with financial advisory and managementconsulting services. See “Item 13—Certain Relationships, Related Transactionsand Director Independence.” We have not instituted any formal plans to addressany conflicts of interest that may arise.

**The demand for our products depends on the level ofour customers’ research and development and other scientific endeavors. Ourbusiness, financial condition and results of operations may be harmed if ourcustomers spend less on these activities.**

Our customers are engagedin research, development and production in the pharmaceutical, biotechnology,education, chemical, technology, food processing, consumer products and otherindustries. The amount of customer spending on research, development and productionhas a large impact on our 

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salesand profitability. Our customers determine the amounts that they will spend onthe basis of, among other things, available resources and their need to developnew products, which, in turn, is dependent upon a number of factors, includingtheir competitors’ research, development and production initiatives. Inaddition, consolidation in the industries in which our customers operate mayhave an impact on such spending as customers integrate acquired operations,including research and development departments and their budgets. Our customersfinance their research and development spending from private and publicsources. Government funding of scientific research and education has varied forseveral reasons, including general economic conditions, growth in population,political priorities, changes in the number of students and other demographicchanges. A reduction in spending by our customers could have a material adverseeffect on our business, financial condition and results of operations. Inaddition, some companies have shifted toward outsourcing research, developmentand production activities overseas. We are expanding into the Asia Pacificregion to address this trend, although there is no assurance that we will notexperience an adverse impact in the future.

**We compete in a highly competitive market. Failure tocompete successfully could have a material adverse effect on our business,financial condition and results of operations.**

We compete globally with two other major distributors,Thermo Fisher Scientific Inc. and Sigma Aldrich Corporation, as well as manysmaller regional, local and specialty distributors, and with manufacturersselling directly to their customers. The bases upon which we compete includeprice, service and delivery, breadth of customer support, e-businesscapabilities and the ability to meet the special requirements of customers.

Some of our competitorsmay have greater financial and other resources than we do. Most of our productsare available from several sources, and some of our customers haverelationships with several distributors. Our agreements with customersgenerally provide that the customer can terminate the agreement or reduce thescope of services provided pursuant to the agreement with short or no notice.Lack of product availability, stemming from either our inability to acquireproducts or interruptions in the supply of products from manufacturers, couldhave a material adverse effect on our ability to compete. Our competitors couldalso obtain exclusive rights to distribute some products, thereby foreclosingour ability to distribute these products. Vertically integrated distributorsmay also have an advantage with respect to the total delivered product cost ofcertain of their captive products. Additionally, manufacturers could increasetheir efforts to sell directly to consumers and effectively bypass distributorslike us. Consolidation in the laboratory supply industry could result inexisting competitors increasing their market share through businesscombinations, which could have a material adverse effect on our business,financial condition and results of operations. The entry of new distributors inthe industry could also have a material adverse effect on our ability tocompete.

**Our business, financial condition and results ofoperations depend upon maintaining our relationships with manufacturers.**

We currently offer products from a wide range ofmanufacturers. We are dependent on these manufacturers for our supply ofproducts. Merck KGaA supplied products that accounted for approximately 13% ofour net sales in 2006. This represents approximately 7% and 25% of our NorthAmerican Lab and European Lab net sales, respectively.

Our ability to sustain our gross margins has been, andwill continue to be, dependent in part upon our ability to obtain favorableterms from our suppliers. These terms may be subject to changes from time totime, and such changes could adversely affect our gross margins over time.

The loss of one or more of our large suppliers, amaterial reduction in their supply of products to us, or material changes inthe terms we obtain from them, could have a material adverse effect on ourbusiness, financial condition and results of operations.

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Some of our competitorsare increasing their manufacturing operations both internally and throughacquisitions of manufacturers, including manufacturers that supply products tous. For instance, in 2006, Fisher Scientific International Inc., a supplier ofproducts to us and one of our largest competitors, merged with Thermo ElectronCorporation, another supplier to us, to form Thermo Fisher Scientific Inc. Todate, we have not experienced an adverse impact on our ability to continue tosource products from manufacturers that have been vertically integrated(including Thermo Fisher Scientific Inc.), although there is no assurance thatwe will not experience such an impact in the future.

**We may be unable to manage certain operationalfunctions of our business if we are not able to replace the informationtechnology and logistics services that are provided to us by Merck KGaA afterour agreements with them expire or are terminated. Further, any disruptions inMerck KGaA’s operations may negatively impact our operations.**

Our European Lab segmentis dependent on Merck KGaA for certain information technology services pursuantto a five-year information services master agreement as well as warehousing andlogistics services pursuant to a logistics service level agreement. Theseinformation technology services affect a significant portion of our informationtechnology and operational infrastructure, including the operation and supportof the main European enterprise resource planning and business warehousesoftware and databases. If Merck KGaA terminates any of these agreements at theend of their respective terms or otherwise, we will need to find an alternativesupplier of, or create our own infrastructure for, these services. While wehave already replaced some of these services, we may not be able to create ourown infrastructure in a timely or cost-effective manner or obtain replacementservices for the remaining services on terms that are as favorable to us as thecurrent arrangements or on acceptable terms, if at all. In addition, anydisruptions in the operational infrastructure or operations of Merck KGaA maynegatively impact our operations.

**If we do not comply with or if we become subject tomore onerous government regulations, we could be adversely affected.**

Some of the products we offer and our operations aresubject to a number of complex and stringent laws and regulations governing theproduction, handling, transportation, import, export and distribution ofchemicals, drugs and other similar products, including the operating andsecurity standards of the United States Drug Enforcement Administration, theBureau of Alcohol, Tobacco, Firearms and Explosives, the Food and DrugAdministration, the Bureau of Industry and Security and various state boards ofpharmacy as well as comparable state and foreign agencies. In addition, ourlogistics activities must comply with the rules and regulations of theDepartment of Transportation, the Federal Aviation Administration and similarforeign agencies. While we believe we are in compliance in all materialrespects with such laws and regulations, any non-compliance could result insubstantial fines or otherwise restrict our ability to provide competitivedistribution services and thereby have an adverse impact on our financialcondition.

We cannot assure you thatexisting laws and regulations will not be revised or that new, more restrictivelaws will not be adopted or become applicable to us or the products that wedistribute. We cannot assure you that the manufacturers of products that maybecome subject to more stringent laws will not try to recover any or allincreased costs of compliance from us by increasing the prices at which wepurchase products from them, or, that we will be able to recover any suchincreased prices from our customers. We cannot assure you that our business andfinancial condition will not be materially and adversely affected by futurechanges in applicable laws and regulations.

**If any of our operations are found not to comply withapplicable antitrust or competition laws, our business may suffer.**

Our operations are subjectto applicable antitrust and competition laws in the countries in which weconduct our business, in particular the United States and in the EuropeanUnion. These laws prohibit, 

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amongother things, anticompetitive agreements and practices. If any of ourcommercial agreements are found to violate or infringe such laws, we may besubject to civil and other penalties and/or third party claims for damages.Further, agreements that infringe these laws may be void and unenforceable, inwhole or in part, or require modification in order to be lawful andenforceable. If we are unable to enforce any of our commercial agreements,whether at all or in material part, our business could be adversely affected.

**We are subject to environmental, health and safetylaws and regulations, and costs to comply with such laws and regulations, orany liability or obligation imposed under such laws or regulations, couldnegatively impact our business, financial condition and results of operations.**

We are subject to a broad range of foreign, federal,state and local environmental, health and safety laws and regulations,including those pertaining to air emissions, water discharges, the handling,disposal and transport of solid and hazardous materials and wastes, theinvestigation and remediation of contamination and otherwise relating to healthand safety and the protection of the environment and natural resources. As ourglobal operations involve and have involved the handling, transport and distributionof materials that are or could be classified as toxic or hazardous, there issome risk of contamination and environmental damage inherent in our operationsand the products we handle, transport and distribute. Our environmental, healthand safety liabilities and obligations may result in significant capitalexpenditures and other costs, which could negatively impact our business,financial condition and results of operations. We may be fined or penalized byregulators for failing to comply with environmental, health and safety laws andregulations. In addition, contamination resulting from our current or pastoperations may trigger investigation or remediation obligations, which may havea material adverse effect on our business, financial condition and results ofoperations.

Based on currentinformation, we believe that any costs we may incur relating to environmental,health and safety matters will not be material. We cannot be certain, however,that identification of presently unidentified environmental, health and safetyconditions, more vigorous enforcement by regulatory authorities or otherunanticipated events will not arise in the future and give rise to additionalliabilities, compliance costs or penalties which could have a material adverse effecton our business, financial condition and results of operations. In addition,environmental, health and safety laws and regulations are constantly evolvingand it is not possible to predict accurately the effect they may have in futureperiods.

**We are subject toproduct liability and other claims in the ordinary course of business.**

Our business involves a risk of product liability andother claims in the ordinary course of business. We maintain insurancepolicies, including product liability insurance, and in many cases we haveindemnification rights against such claims from the manufacturers of theproducts we distribute. We cannot assure you that our insurance coverage or themanufacturers’ indemnity will be available in all pending or any future casesbrought against us. Furthermore, our ability to recover under any insurance orindemnification arrangements is subject to the financial viability of ourinsurers, our manufacturers and/or our manufactures’ insurers. In particular,as we seek to expand our sourcing from manufacturers in Asia Pacific and otherdeveloping locations, we expect that we will increase our exposure to potentialdefaults under the related indemnification arrangements. Insurance coverage ingeneral or coverage for certain types of liabilities, such as product liabilityin these developing markets may not be readily available for purchase orcost-effective for us to purchase. Further, insurance for asbestos-relatedliability is cost-prohibitive or no longer available. Accordingly, we could besubject to uninsured and unindemnified future liabilities, and an unfavorableresult in a case for which adequate insurance or indemnification is notavailable could result in a material adverse effect on our business, financialcondition and results of operations.

From time to time, we arenamed as a defendant in cases that arise as a result of our distribution ofscientific supplies, including litigation resulting from the distribution ofproducts containing asbestos by us 

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andcertain of our predecessors. While the impact of this litigation on us hastypically been immaterial, there can be no assurance that the impact of thepending and any future claims will not be material to our business, financialcondition and results of operations in the future.

**The loss of keypersonnel could harm our business, financial condition and results ofoperations.**

We depend heavily on theservices of our senior management. We believe that our future success willdepend upon the continued services of our management. Our business may beharmed by the loss of one or more members of our management. We currently donot maintain key-man life insurance with respect to our executive officers.

**Our internationaloperations pose currency risks.**

While we report ourfinancial results in U.S. dollars, we derive a significant portion of our salesand incur costs in foreign currencies from our operations outside the UnitedStates. For example, in 2006 and 2005, approximately 42% and 41% of our netsales respectively, came from our operations outside the United States,primarily from our operations in Europe and Canada. Because the majority of ourdebt is denominated in U.S. dollars, fluctuations in exchange rates betweennon-U.S. currencies (principally the Euro, the British pound sterling and theCanadian dollar) relative to the U.S. dollar could make it more difficult forus to pay amounts due on our debt.

**The internationalscope of our operations may adversely affect our business.**

We currently deriveapproximately 42% of our net sales from our operations outside the UnitedStates, and we are expanding sourcing and commercial operations in AsiaPacific. Accordingly, we face certain risks, including:

·       restrictionson foreign ownership of subsidiaries;

·       tariffsand other trade barriers;

·       politicalrisks;

·       differinglaws or administrative practices;

·       localbusiness practices that are inconsistent with U.S. or local law; and

·       potentiallyadverse tax consequences of operating in multiple jurisdictions.

In addition, an adversechange in laws or administrative practices in countries within which we operatecould have a material adverse effect on us. Our operations outside the UnitedStates also may present additional risk with respect to compliance withgovernment regulations.

**Problems with or failure of our informationtechnology, its connectivity to our customers and certain service providers andthe normal functioning of our telephony systems could significantly disrupt ouroperations, which could reduce our customer base and could harm our business,financial condition and results of operations.**

Our success depends, in part, on the secure anduninterrupted performance of our information technology and telephony systems.Our systems, the systems of our customers, suppliers and service providers, andthe connectivity among such systems are vulnerable to damage from a variety ofsources, including telecommunications failures, malicious human acts andnatural disasters. Moreover, despite network security measures, our servers andthose of our customers and service providers are potentially vulnerable tophysical or electronic break-ins, computer viruses and similar disruptiveproblems. While we have taken appropriate steps to reinforce the security ofour websites, applications, electronic data and the electronic data relating toour customers and service providers, there can be no guarantee that 

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unauthorized intrusionwill not occur. Failure to maintain a secure web-based procurement system couldhave a material adverse effect on our business, financial condition and resultsof operations.

In addition, because we accept payment by credit cardand similar payment instruments, our ability to accept, process and settlecredit card transactions is subject to rules and regulations issued and/oramended from time to time by the payment card industry and by individualpayment card companies such as American Express, VISA, MasterCard and Discover.Compliance with these requirements, which vary based on annual transactionvolumes and transaction experience, requires us to safeguard customerinformation, including minimum security standards for the manner in which wecapture, store, process and transmit such information. Our failure to complywith such changing rules and standards can subject us to fines,restrictions or expulsion from these card acceptance programs, which could havea material adverse affect on our business, financial condition and results ofoperations.

Despite the security precautions we have taken,unanticipated problems may nevertheless cause failures in our informationtechnology, connectivity and telephony systems. Sustained or repeated systemfailures or service disruptions that interrupt our ability to receive andprocess orders, receive and process customer payments and deliver products in atimely manner could have a material adverse effect on our business, financialcondition and results of operations.

We will continue to make significant technology andinfrastructure investments, with particular emphasis in North America. Ourtechnology initiatives are designed to enhance the security and reliability ofour technology to allow us to continue to provide high quality service to ourcustomers. The cost and potential problems and interruptions associated withthe implementation of our technology initiatives could disrupt or reduce theefficiency of our operations in the near term.

**We have not registered and in some cases do not ownthe existing applications and registrations for our material trademarks orservice marks in every country in which we do business.**

We maintain operations in more than 20 countries. Wealso export products from our distribution facilities in North America andEurope and sell them to markets in Central America, South America, BritishCommonwealth countries, Africa, the Middle East and the Pacific Rim throughagents and resellers. We have not sought to register our material trademarksand service marks in all of these countries and may be blocked from doing so byothers who have already registered identical or similar marks for similar goodsor services. In addition, if we do business in countries where other companiesmay have registered identical or similar trademarks or service marks, we runthe risk of being sued for infringement.

The failure to own and have enforceable rights in thetrademarks and service marks used in our business could have a material adverseeffect on our business, financial condition and results of operations.

**We may incur impairment charges on our goodwill andother intangible assets with indefinite lives, which could negatively impactour business, financial condition and results of operations.**

We are subject to Statement of Financial AccountingStandards (“SFAS”) No. 142, *Goodwilland Other Intangible Assets* (“SFAS 142”), which requires thatgoodwill and other intangible assets that have an indefinite useful life betested at least annually for impairment. Goodwill and other intangible assetswith indefinite lives must also be tested for impairment between the annualtests if an event or change in circumstance occurs that would more likely thannot reduce the fair value of the asset below its carrying amount. As ofDecember 31, 2006, goodwill and other intangible assets with indefinitelives represented approximately 45% of our total assets, and the results of ourannual test did not identify an impairment. However, if in the future, wedetermine that there has been an impairment, our financial results for therelevant period would be reduced by the amount of the impairment, net of anyincome tax effects, which could have an adverse effect on our financialcondition and results of operations.

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**We rely upon thirdparties to manufacture and ship products to us and to our customers, andinterruptions in their operations could harm our business, financial conditionand results of operations.**

We are dependent on third-party manufacturers tosupply products to us. In addition, we ship substantially all of our ordersthrough various independent package delivery providers. Strikes or other serviceinterruptions by our manufacturers or carriers could cause our operatingexpenses to rise or seriously harm our ability to fulfill our customers’ ordersor deliver products on a timely basis or both, which could have a materialadverse effect on our business, financial condition and results of operations.

**We may continue toengage in acquisitions or business combinations that are subject to a varietyof other risks that could harm our business.**

We may continue to engagein selective acquisitions from time to time. Any future acquisitions couldresult in a variety of other risks:

·                    wemay need to spend substantial operational, financial and management resourcesin integrating new businesses, technologies and products, and management mayencounter difficulties in integrating the operations, personnel or systems ofthe acquired businesses;

·                    futureacquisitions or business combinations might have a material adverse effect onour business relationships with customers or manufacturers, or both, and couldlead to a termination of, or otherwise affect our relationships with, suchcustomers or manufacturers;

·                    wemay assume substantial actual or contingent liabilities;

·                    wemay incur substantial unanticipated costs or other problems associated withacquired businesses; and

·                    wemay not be able to retain the key personnel, customers and suppliers of theacquired business.

**ITEM 1B.**       UNRESOLVEDSTAFF COMMENTS

Notapplicable.

**ITEM 2.**                PROPERTIES

We own and lease office,warehouse and manufacturing space in North America, Europe and Asia Pacific. Wemaintain our corporate headquarters in West Chester, Pennsylvania forexecutive, financial, legal, information systems, marketing and otheradministrative activities. Our European executive, financial, legal,information systems, marketing and other administrative activities are inDarmstadt, Germany and Haasrode, Belgium. As of December 31, 2006, thefollowing table sets forth information with respect to our significantdistribution, manufacturing and other office facilities:

| **Location**                     | ** ** | ** **   | ** ** | **Owned/Leased** | ** ** | **Size**                           | ** ** | **Type of Facility** |
|----------------------------------|------------|--------------|------------|------------------|------------|------------------------------------|------------|--------------------------------|
| Batavia, Illinois(1)             |       | Owned        |       | 300,000 sq. ft.  |       | Distribution Center                |
| Briare, France(2)                |       | Owned/Leased |       | 358,675 sq. ft.  |       | Distribution/Manufacturing Center  |
| Bridgeport, New Jersey(1)        |       | Owned/Leased |       | 466,776 sq. ft.  |       | Distribution Center                |
| Brisbane, California(1)          |       | Leased       |       | 248,280 sq. ft.  |       | Distribution Center                |
| Bruchsal, Germany(2)             |       | Owned/Leased |       | 108,339 sq. ft.  |       | Distribution Center                |
| Buffalo, New York(3)             |       | Owned        |       | 127,000 sq. ft.  |       | Distribution Center                |
| Darmstadt, Germany(2)            |       | Leased       |       | 45,348 sq. ft.   |       | Offices                            |
| Denver, Colorado(1)              |       | Leased       |       | 130,091 sq. ft.  |       | Distribution Center                |
| Dublin, Ireland(2)               |       | Leased       |       | 77,067 sq. ft.   |       | Distribution Center                |
| Haasrode, Belgium(2)             |       | Owned        |       | 201,447 sq. ft.  |       | Offices/Distribution/Manufacturing |
| Karlskoga, Sweden(2)             |       | Leased       |       | 129,167 sq. ft.  |       | Distribution Center                |
| Lutterworth, United Kingdom(2)   |       | Leased       |       | 183,205 sq. ft.  |       | Distribution Center                |
| Manati, Puerto Rico(1)           |       | Owned        |       | 100,000 sq. ft.  |       | Distribution Center                |
| Mexico City, Mexico(1)           |       | Leased       |       | 63,948 sq. ft.   |       | Distribution Center                |
| Milan, Italy(2)                  |       | Leased       |       | 13,563 sq. ft.   |       | Distribution Center                |
| Mississauga, Ontario, Canada(1)  |       | Leased       |       | 114,000 sq. ft.  |       | Distribution Center                |
| Mollet del Valles, Spain(2)      |       | Leased       |       | 33,480 sq. ft.   |       | Distribution Center                |
| Rochester, New York(3)           |       | Owned        |       | 286,260 sq. ft.  |       | Distribution/Manufacturing Center  |
| Singapore(1)                     |       | Leased       |       | 27,034 sq. ft.   |       | Distribution Center                |
| Suwanee, Georgia(1)              |       | Leased       |       | 168,925 sq. ft.  |       | Distribution Center                |
| West Chester, Pennsylvania(1)(3) |       | Leased       |       | 97,516 sq. ft.   |       | Offices                            |

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(1) - North American Lab; (2) - European Lab; (3) -Science Education

We also lease various regional service centers and “just-in-time”facilities in North America and Europe that support our sales and warehousefunctions.

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**ITEM 3.**                LEGALPROCEEDINGS

Our business involves a risk of product liability andother claims in the ordinary course of business. We maintain insurancepolicies, including product liability insurance, and in many cases we haveindemnification rights against such claims from the manufacturers of theproducts we distribute. We cannot assure you that our insurance coverage or themanufacturers’ indemnities will be available in all pending or any future casesbrought against us. In addition, our ability to recover under insurance orindemnification arrangements is subject to the financial viability of theinsurers and manufacturers. In particular, as we seek to expand our sourcingfrom manufacturers in Asia Pacific and other developing locations, we expectthat we will increase our exposure to potential defaults under the relatedindemnification arrangements. Insurance for some liabilities, includingasbestos, is not available, and we currently are not able to obtaincost-effective insurance coverage for certain sourcing transactions in AsiaPacific. Accordingly, we could be subject to uninsured and unindemnified futureliabilities, and an unfavorable result in a case for which adequate insuranceor indemnification is not available could result in a material impact on ourbusiness, financial condition and results of operations.

During 2005, the German Federal Cartel Officeinitiated an investigation with regard to our European Distribution Agreementwith Merck KGaA. The purpose of the investigation is to determine whether thisagreement violates or otherwise infringes the general prohibition ofanti-competitive agreements under either German or EU rules. The Companysubmitted information to the German Federal Cartel Office in response to itsinitial request. In January 2007, the German Federal Cartel Officerequested additional information which we have recently provided. At the currenttime, we cannot assess the likely outcome of the investigation or potentialeconomic impact associated with an adverse ruling. In connection with theAcquisition, we recorded intangible assets related to our European DistributionAgreement with Merck KGaA. As of December 31, 2006, the unamortized netbook value of these intangible assets is approximately $23.6 million.

In March 2006, the Company was served with acomplaint filed in the United States District Court, Western District of NewYork, by Corning Incorporated (“Corning”) alleging a breach of contract andunliquidated damages. In April 2006, Corning amended its complaint toallege trademark and unfair competition claims. In November 2006, theCourt dismissed Corning’s breach of contract claim, but in March 2007,reconsidered its ruling and has now permitted Corning to proceed with theclaim. In January 2007, the Company filed counterclaims for breach ofrebate obligation, unfair competition and tortious interference. The Companybelieves Corning’s claims are without merit and will vigorously defend itselfon those claims and pursue its counterclaims.

From time to time, we arenamed as a defendant in cases that arise as a result of our distribution ofscientific supplies, including litigation resulting from the distribution ofproducts containing asbestos by us and certain of our predecessors. Until 1987,we distributed certain asbestos-containing products primarily for use inlaboratories, including pads, protective clothing and laboratory equipment.Individuals who were exposed to these asbestos-containing products have, fromtime to time, brought claims against us for asbestos-related injuries. Webelieve that the liabilities associated with asbestos-related claims currentlypending against us are not material. While liabilities arising from potentialfuture claims could become material, we currently believe, on the basis of ourclaims history and related factors, that such potential future claims are notlikely to have a material impact on our business, financial condition andresults of operations.

**ITEM 4.**                SUBMISSIONOF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

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**PART II**

**ITEM5.**                MARKET FORREGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OFEQUITY SECURITIES

**Market Information**

There is no establishedpublic trading market for our common stock. The estimated fair market value ofour common stock as of December 31, 2006 was $98.64 per share. The numberof shares of our common stock outstanding at March 16, 2007 was 5,802,312and we had 239 holders of record of our common stock. See“Item 12—Security Ownership of Certain Beneficial Owners and Managementand Related Stockholder Matters.”

**Dividends**

In 2006, we issued $350.0million aggregate principal amount of Senior Floating Rate Notes. The proceedsfrom this issuance, net of related expenses, were used to pay a $343.5 milliondistribution to the holders of our common stock. We did not pay any cashdividends or distributions on our common stock during 2005. In 2004, we issued$481.0 million aggregate principal amount at maturity ($299.4 million grossproceeds) of Senior Discount Notes. The net proceeds from the issuance of theSenior Discount Notes of approximately $297.9 million were used to pay adividend to holders of our common stock.

Our debt instrumentsinclude restrictions on our ability to pay dividends. See “Item 7—Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Indebtedness.”

**Recent Sales of our Common Stock**

During 2006, 2005 and2004, we have offered certain of VWR’s directors, executive officers andemployees the opportunity to purchase shares of our common stock pursuant tothe CDRV Investors, Inc. Stock Incentive Plan (the “Stock Plan”). Thoseparticipants who were not also directors or executive officers were offeredfinancial assistance to help purchase their shares through a loan facility thatwe arranged with a third party financial institution. The participants in theseofferings, other than directors, have been granted options to purchase twoadditional shares (three in the case of certain executive officers) of ourcommon stock for each share they purchased. The options have been granted withan exercise price equal to the fair value of a share of our common stock on thegrant date, will vest in equal annual installments on each of the first fiveanniversaries of the grant date, and will expire ten years from the grant date.To date, the proceeds of the securities sold pursuant to the Stock Plan havebeen paid to the Company, who in turn has contributed them to VWR as anadditional investment. See Note 15 under “Item 8—Financial Statements and Supplementary Data” for more information regardingissuances made pursuant to the Stock Plan.

***Offerings in 2006.******  ***During 2006,the following number of shares were sold pursuant the Stock Plan at theindicated prices: 19,643 shares for $56.00 per share, 25,070 shares for $75.00per share and 4,201 shares for $119.00 per share. In addition, 25,660 shareswere also issued at $50.52 per share through stock option exercises, and 3,373shares were issued to certain directors who are not also employees or associatedwith CD&R for directors’ compensation in 2006.

***Offerings in 2005.******  ***During 2005,the Company sold a total of 23,407 shares for $56.00 per share pursuant to theStock Plan. In connection with the acquisition of AI during 2005, discussed inNote 5(b) under “Item 8—FinancialStatements and Supplementary Data,”the Company issued 8,929 shares, as consideration (for value of $0.5 million).In addition, we issued 5,625 shares to certain directors who are not alsoemployees or associated with CD&R for directors’ compensation in 2005.

***Offerings in 2004.******  ***Pursuant to aninitial offering of shares shortly after the Acquisition, we sold 239,835shares for $100.00 per share under the Stock Plan. In addition, we issued 1,382shares to certain directors who are not also employees or associated withCD&R for directors compensation in 2004.

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The securities issued inthe transactions described above were deemed exempt from registration under theSecurities Act in reliance upon Regulation D, Section 4(2) or Rule 701of the Securities Act as transactions by an issuer not involving a public offering,or transactions pursuant to compensatory benefit plans and contracts relatingto compensation. The recipients of securities in each of such transactionsrepresented their intentions to acquire the securities for investment only andnot with a view to or for sale in connection with any distribution of thesecurities. All recipients were either furnished with or had adequate accessto, through their relationship with us, information about the Company.

**ITEM 6.**                SELECTEDFINANCIAL DATA

Theselected financial data below under the captions “Income Statement Data” and“Balance Sheet Data” as of and for each of the years in the five-year periodended December 31, 2006 are derived from the consolidated and combinedfinancial statements of CDRV Investors, Inc. subsequent to the Acquisition andVWR International Corporation prior to the Acquisition that have been auditedby KPMG LLP (“KPMG”), an independent registered public accounting firm. Youshould read the following selected financial data in conjunction with “Management’sDiscussion and Analysis of Financial Condition and Results of Operations” andthe Financial Statements presented elsewhere herein. The term “predecessor”refers to VWR International Corporation prior to the Acquisition. The term “successor”refers to CDRV Investors, Inc. following the Acquisition.

| ** **                                                           | ** ** | **Successor**                              | ** ** | ** **                                 | ** ** | **Predecessor**    | ** ** |
|----------------------------------------------------------------------|------------|--------------------------------------------|------------|--------------------------------------------|------------|--------------------|------------|
| ** **                                                           | ** ** | **Year Ended December 31,** | ** ** | **April 7 -  December 31,** | ** ** | ** **         | ** ** | **January 1 -  April 6,** | ** ** | **Year Ended December 31,** | ** ** |
| ** **                                                           | ** ** | **2006**                                   | ** ** | **2005**                                   | ** ** | **2004**           | ** ** | ** ** | ** ** | **2004** | ** ** | **2003** | ** ** | **2002** | ** ** |
| ** **                                                           | ** ** | **(Consolidated)**                         | ** ** | **(Consolidated)**                         | ** ** | **(Consolidated)** | ** ** | ** ** | ** ** | **(Consolidated)** | ** ** | **(Consolidated)** | ** ** | **(Combined)** | ** ** |
| ** **                                                           | ** ** | **(Dollars in millions)**        | ** ** |
| **Income  Statement Data:**                                          |       |                                       |       |                                       |       |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net sales                                                            |       |                                       | $          | 3,257.6                                    |       |               |       | $ | 3,138.2 |   |   |   | $ | 2,212.2 |   |   |   |   |   | $ | 793.2 |   |   |   | $ | 2,794.2 |   |   |   | $ | 2,624.1 |   |   |
| Cost of goods sold                                                   |       |                                       | 2,374.3    |                                       |       |               | 2,334.5    |   |   |   | 1,652.7 |   |   |   |   |   | 588.0 |   |   |   | 2,078.1 |   |   |   | 1,950.1 |   |   |
| Gross profit                                                         |       |                                       | 883.3      |                                       |       |               | 803.7      |   |   |   | 559.5 |   |   |   |   |   | 205.2 |   |   |   | 716.1 |   |   |   | 674.0 |   |   |
| Selling, general and administrative expenses(1)                      |       |                                       | 693.3      |                                       |       |               | 640.0      |   |   |   | 455.6 |   |   |   |   |   | 163.7 |   |   |   | 583.4 |   |   |   | 560.0 |   |   |
| Restructuring (credits) charges(3)                                   |       |                                       | (1.0       | )                                          |       |               | 20.6       |   |   |   | — |   |   |   |   |   | — |   |   |   | — |   |   |   | — |   |   |
| Operating income                                                     |       |                                       | 191.0      |                                       |       |               | 143.1      |   |   |   | 103.9 |   |   |   |   |   | 41.5 |   |   |   | 132.7 |   |   |   | 114.0 |   |   |
| Interest expense, net                                                |       |                                       | 110.4      |                                       |       |               | 104.0      |   |   |   | 51.9 |   |   |   |   |   | 5.6 |   |   |   | 24.4 |   |   |   | 39.4 |   |   |
| Other expense (income), net                                          |       |                                       | 1.5        |                                       |       |               | (3.8       | ) |   |   | (2.1 | ) |   |   |   |   | 0.1 |   |   |   | (3.0 | ) |   |   | 0.6 |   |   |
| Income before cumulative effect of changes in  accounting principles |       |                                       | 79.1       |                                       |       |               | 42.9       |   |   |   | 54.1 |   |   |   |   |   | 35.8 |   |   |   | 111.3 |   |   |   | 74.0 |   |   |
| Income tax provision                                                 |       |                                       | 32.7       |                                       |       |               | 20.9       |   |   |   | 23.0 |   |   |   |   |   | 15.1 |   |   |   | 46.2 |   |   |   | 29.7 |   |   |
| Income before cumulative effect of changes in  accounting principles |       |                                       | 46.4       |                                       |       |               | 22.0       |   |   |   | 31.1 |   |   |   |   |   | 20.7 |   |   |   | 65.1 |   |   |   | 44.3 |   |   |
| Cumulative effect of changes in accounting  principles(2)(4)         |       |                                       | —     |                                       |       |               | (0.5       | ) |   |   | — |   |   |   |   |   | — |   |   |   | — |   |   |   | (43.8 | ) |   |
| Net income                                                           |       |                                       | $          | 46.4                                       |       |               |       | $ | 21.5 |   |   |   | $ | 31.1 |   |   |   |   |   | $ | 20.7 |   |   |   | $ | 65.1 |   |   |   | $ | 0.5 |   |   |
| **Other  Financial Data:**                                           |       |                                       |       |                                       |       |               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                        |       |                                       | $          | 41.4                                       |       |               |       | $ | 33.9 |   |   |   | $ | 25.8 |   |   |   |   |   | $ | 8.9 |   |   |   | $ | 32.9 |   |   |   | $ | 32.6 |   |   |
| Capital expenditures                                                 |       |                                       | 23.6       |                                       |       |               | 18.4       |   |   |   | 13.1 |   |   |   |   |   | 3.3 |   |   |   | 16.6 |   |   |   | 41.0 |   |   |
| Gross profit as a percentage of net sales                            |       |                                       | 27.1       | %                                          |       |               | 25.6       | % |   |   | 25.3 | % |   |   |   |   | 25.9 | % |   |   | 25.6 | % |   |   | 25.7 | % |   |
| Ratio of earnings  to fixed charges(5)                               |       |                                       | 1.6x       |                                       |       |               | 1.4x       |   |   |   | 1.9x |   |   |   |   |   | 5.1x |   |   |   | 4.1x |   |   |   | 2.4x |   |   |

 

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| ** **                   | ** ** | **Successor**                       | ** ** | ** **         | ** ** | **Predecessor**       | ** ** |
|------------------------------|------------|-------------------------------------|------------|--------------------|------------|-----------------------|------------|
| ** **                   | ** ** | **December 31,**               | ** ** | ** **         | ** ** | **December 31,** | ** ** |
| ** **                   | ** ** | **2006**                            | ** ** | **2005**           | ** ** | **2004**              | ** ** | ** ** | ** ** | **2003** | ** ** | **2002** | ** ** |
| ** **                   | ** ** | **(Consolidated)**                  | ** ** | **(Consolidated)** | ** ** | **(Consolidated)**    | ** ** | ** ** | ** ** | **(Consolidated)** | ** ** | **(Consolidated) ** | ** ** |
| ** **                   | ** ** | **(Dollars in millions)** | ** ** |
| **Balance  Sheet Data:**     |       |                                |       |               |       |                  |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total assets                 |       |                                | $          | 2,610.1            |       |                  |       | $ | 2,533.4 |   |   |   | $ | 2,553.4 |   |   |   |   |   | $ | 1,767.9 |   |   |   | $ | 1,705.2 |   |   |
| Total debt                   |       |                                | 1,687.6    |               |       |                  | 1,393.4    |   |   |   | 1,399.1 |   |   |   |   |   | 1,026.0 |   |   |   | 1,100.6 |   |   |
| Stockholders’ equity(6) |       |                                | 62.9       |               |       |                  | 321.3      |   |   |   | 338.6 |   |   |   |   |   | 265.4 |   |   |   | 176.9 |   |   |
|                              |            |                                     |            |                    |            |                       |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)          Effective January 1,2006, the Company adopted SFAS No. 123 Revised, *Share-BasedPayment* (“SFAS 123R”), which requires companies to recognize in theincome statement, the grant date fair value of stock options and other forms ofequity-based compensation issued to employees. The Company adopted SFAS 123Rusing the modified prospective transition method. Compensation expense relatedto stock options of $4.6 million is included in selling, general andadministrative (“SG&A”) expenses for the year ended December 31, 2006.

(2)          We adopted SFAS 142, effective January 1, 2002. SFAS142 requires that goodwill and certain intangibles with indefinite lives not beamortized, but subject to an impairment test on an annual basis or when factsand circumstances suggest that such assets may be impaired. As a result of thetransitional goodwill impairment evaluation as of January 1, 2002, werecognized a non-cash transitional impairment loss of $43.8 million, which wasnot deductible for tax purposes. In addition, we ceased amortization ofgoodwill effective January 1, 2002.

(3)          During 2006, we reversed $1.0 million of excess accruals andcredited operations primarily as a result of the re-deployment of certainpersonnel originally included in 2005 programs.

During 2005, we recorded pre-tax restructuring chargesaggregating $20.6 million to rationalize and streamline our operations. Thesecharges included $17.9 million for severance and termination benefits and $2.7million for facility exit costs.

(4)          We adopted FinancialAccounting Standards Board (“FASB”) Interpretation No. 47, *An Interpretation of FASB No. 143*, *Accounting for Asset Retirement Obligations*(“SFAS 143”), effective December 31, 2005. SFAS 143 addresses financialaccounting and reporting for obligations associated with the retirement oftangible long-lived assets and the associated asset retirement costs. SFAS 143requires recognition of a liability at fair value and an increase to thecarrying value of the related asset for any retirement obligation. As a resultof the adoption, we recognized a non-cash charge of $0.5 million, net ofapplicable income taxes of $0.3 million.

(5)          For purposes ofcalculating the ratio of earnings to fixed charges, (1) earnings isdefined as income before income taxes and cumulative effect of a change inaccounting principle and equity method earnings or losses plus fixed chargesand distributed earnings of investees, and (2) fixed charges is defined asinterest expense (including amortization of debt issuance costs) and one-thirdof rental expense (which we believe is representative of the interest componentof rent expense).

(6)          Weadopted SFAS No. 158, *Employers’ Accounting forDefined Benefit Pension and Other Postretirement Plans—an amendment of SFASNo 87, 88, 106, and 132(R)* (“SFAS 158”) as of December 31,2006. This Statement requires balance sheet recognition of the funded statusfor all pension and postretirement benefit plans. As a result of the adoption,stockholders’ equity decreased by $2.3 million.

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**ITEM 7.**   MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

**Cautionary FactorsRegarding Forward-Looking Statements**

This Annual Reporton Form 10-K includes forward-looking statements regarding, amongother things, our plans, strategies and prospects, both business and financial.These statements are based on the beliefs and assumptions of our management.Although we believe that our plans, intentions and expectations reflected in orsuggested by these forward-looking statements are reasonable, we cannot assureyou that we will achieve or realize these plans, intentions or expectations.Forward-looking statements are inherently subject to risks, uncertainties andassumptions. Generally, statements that are not historical facts, includingstatements concerning our possible or assumed future actions, businessstrategies, events or results of operations, are forward-looking statements.These statements may be preceded by, followed by or include the words “believes,”“expects,” “anticipates,” “intends,” “plans,” “estimates” or similarexpressions. Forward-looking statements include the information in this AnnualReport on Form 10-K regarding, among other things:

·       managementforecasts;

·       efficienciesand cost savings;

·       incomeand margins;

·       growth;

·       economiesof scale;

·       theeconomy;

·       futureeconomic performance;

·       futureacquisitions and dispositions;

·       litigation;

·       potentialand contingent liabilities;

·       management’splans;

·       taxes;and

·       refinancingof debt.

Forward-looking statementsare not guarantees of performance. You should not place undue reliance on thesestatements. You should understand that the following important factors, inaddition to those discussed in “Item 1A—Risk Factors” and elsewhere in this Form 10-K,could affect our future results and could cause those results or other outcomesto differ materially from those expressed or implied in our forward-lookingstatements:

·       actionsby manufacturers, customers, carriers and other third parties;

·       ourability to maintain our relationships with manufacturers;

·       lossof our key executive officers;

·       ourability to consummate and integrate potential acquisitions;

·       theeffect of political and economic conditions, inflation and interest ratesworldwide;

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·       theeffect of changes in laws and regulations, including changes in accountingstandards, trade, tax, price controls and other regulatory matters; and

·       increasedcompetition from other companies in our industry and our ability to retain orincrease our market shares in our principal geographical markets.

All forward-lookingstatements attributable to us or persons acting on our behalf are expresslyqualified in their entirety by the foregoing cautionary statements. You arecautioned not to place undue reliance on the forward-looking statements, whichspeak only as of the date of this Annual Report on Form 10-K. Weundertake no obligations to update or revise publicly any forward-lookingstatements, whether as a result of new information, future events or otherwise.

**Overview**

We generate our net sales through the sale of productsand the provision of services to the global laboratory supply industry. Servicecomprises a small portion of our revenue. We generate approximately 75% of ournet sales from the sale of consumable products. We offer exclusive, branded andprivate label products that we source from a wide range of manufacturers.

Our principal customers are major pharmaceutical,biotechnology, chemical, technology, food processing and consumer productcompanies, universities and research institutes, governmental agencies,environmental organizations, and primary and secondary schools. Our largestcustomer accounted for less than 3% of our 2006 net sales.

The principal tenets of our strategy are outlinedbelow.

***IncreaseProductivity and Profitability.******  ***We will continue to refineour processes to increase our operating efficiencies while enhancing ourservice capabilities and customer support levels. For example, we haveincreased customer service levels while reducing overall costs in our callcenter network. We believe that additional opportunities exist to improveprofitability, including plans to further optimize freight costs, enhance ourlogistics network and consolidate various administrative and back-office functionsto drive greater efficiencies throughout the organization.

***Expand GlobalPresence.******  ***We will expand our operations in AsiaPacific. In 2006, we established our presence in Asia Pacific, primarilythrough our export network. We hope to further this presence with our owndirect distribution capability, which will allow us to effectively service thelaboratory supply industry. In 2006, we acquired Sino Chemical Company (Pte.)Limited (“Sino”), located in Singapore, which distributes laboratory chemicals,equipment and consumables. We also hope to further expand through futurestrategic acquisitions that will provide well-established in-country operationsand local staff to service our global accounts. In addition, we will continueto add to our field operations and commercial staff in Asia Pacific.

***Improve SourcingStrategy.***   By utilizing our global scale,strong relationships with our multinational customers and our primary focus ondistribution, we intend to continue developing mutually beneficialrelationships with our leading manufacturers. An important part of our strategyinvolves providing our customers with a choice of products at varying pricepoints. Global sourcing is a key element of this strategy. VWR continues toexpand its sourcing efforts for high quality, lower-cost, globally sourcedproducts. We have dedicated sourcing teams, specifically in China and India, tosource high quality and lower-cost products.

***Increase Sales of Private Label Products.***   Wewill continue to direct our sales and marketing efforts to grow sales of ourprivate label products, which accounted for approximately 14% of our net salesin 2006. We believe that this strategy represents a significant profitabilityenhancement opportunity.

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***Restructuring and Other Operating Initiatives***

Since the Acquisition, we have completed variousrestructuring activities to rationalize operating costs and improve ouroperating and administrative capabilities. The initial focus was on the Company’sEuropean operations and organization structure and, to a lesser extent, theoperations in North America. In connection with this initial focus, we recordedrestructuring accruals of $29.7 million in 2004, primarily related toreductions in headcount in Europe due to the reorganization of our Europeansales and marketing functions. In early 2005, we implemented restructuringplans that were formulated in 2004 and were in the planning and evaluationstages. Accordingly, we recorded additional restructuring accruals of $24.5million in 2005, primarily for severance and other exit costs includingestimates for environmental remediation associated with cessation ofmanufacturing operations at a plant in France and severance costs associatedwith the consolidation of certain sales and marketing personnel in our Germanand UK operations. These charges have been recorded as adjustments toacquisition costs (increases to goodwill) pursuant to the provisions ofEmerging Issues Task Force Issue No. 95-3, *Recognition of Liabilities in Connection with aPurchase Business Combination*.

In addition, we initiatedcost reduction programs in response to relatively static market conditions andimplemented reductions in force and other cost containment measures primarilyduring the later part of 2005 that were recorded as expenses. In connectionwith these actions, we recorded restructuring charges related to severance andfacility exit costs totaling approximately $20.6 million for the year ended December 31,2005. During 2006,we reversed $1.0 million of excess accruals and credited operations primarilyas a result of the re-deployment of certain personnel originally included inthe 2005 programs.

***Compliance with Sarbanes-Oxley Act***

In 2006, we completed aprogram to address the requirements of Section 404 of the Sarbanes-OxleyAct prior to the mandatory compliance date of December 31, 2007.Compliance with these requirements required significant incremental internalresources and financial investments including, but not limited to, use ofoutside experts, additional audit fees, and changes in systems design, securityand structure. For the years ended December 31, 2006 and 2005, we expensedapproximately $7.2 million and $3.1 million, respectively, for externalassistance related to our Sarbanes-Oxley compliance program. See “Item 9A—Controlsand Procedures” for further information on our compliance program.

**Basis of FinancialStatement Presentation**

On December 31, 2002, Merck KGaA entered into aseries of reorganization transactions whereby all of its legal entities thatcomprised our North American and European businesses were contributed to VWRInternational Corporation and became its wholly-owned subsidiaries. Thefinancial statements for the year ended December 31, 2002 represent thecombined financial statements of the two businesses that have been derived fromthe consolidated financial statements and accounting records of Merck KGaAusing the historical results of operations and historical basis of the assetsand liabilities of the individual businesses following a carve-out process forthe European business. The financial statements for the year ended December 31,2003 and the period January 1—April 6, 2004 include the accounts ofVWR International Corporation and its subsidiaries. On April 7, 2004,Merck KGaA sold all of the outstanding shares of capital stock of VWRInternational Corporation to CDRV Acquisition Corporation, a wholly-ownedsubsidiary of CDRV Holdings, Inc., a wholly-owned subsidiary of theCompany. As a result of the Acquisition, the financial statements for theperiod April 7—December 31, 2004 and the years ended December 31,2005 and 2006 include the accounts of CDRV Investors, Inc. and itssubsidiaries. In order to provide a meaningful basis of comparing our resultsof operations for the year ended December 31, 2004, the results ofoperations for the “predecessor” period (January 1—April 6, 2004)have been combined with the results of operations for the “successor” period (April 7—December 31,2004). All intercompany accounts and transactions have been eliminated.

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The purchase price paid by Merck KGaA for thepredecessor businesses was pushed down to VWR International Corporation’sfinancial statements from the date of acquisition and has resulted in theallocation of the purchase price to the assets and liabilities acquired and therecognition of either push down debt due Merck KGaA or a contribution tostockholders’ equity for cash consideration. Interest expense was recorded onthis push down debt based upon Merck KGaA’s intercompany interest rates, whichare not necessarily indicative of rates VWR would have obtained if VWR was notan ultimate subsidiary of Merck KGaA. Interest expense, including tax effects,on push down debt has been included in the predecessor statement of operations,and presented as a non-cash item in the predecessor statement of cash flows anda capital contribution in the predecessor statement of stockholders’ equity, asthis interest was not required to be paid to Merck KGaA.

Management believes theassumptions underlying the predecessor financial statements are reasonable.However, the financial statements, for all periods up to April 6, 2004, donot include allocations of Merck KGaA general corporate expenses or charges forfinancial reporting, tax, and treasury services, as such costs were not chargedto us. Management does not believe that charges for such services would havebeen material. The historical financial information does not reflect the addedcosts that we incur as a separate company. These additional costs include costsfor new information technology systems to operate as a separate company, costsof periodic reporting to the SEC, as well as the costs related to a global taxand treasury staff and compliance with the Sarbanes-Oxley Act of 2002. Thehistorical financial information also does not reflect the incremental costsassociated with changes in our capital structure and operations.

**Effects of theAcquisition**

The Acquisition has been accounted for using thepurchase method of accounting. As such, our assets and liabilities wereadjusted, as of the date of Acquisition, to their respective fair values. Thisresulted in the recognition of significant identified intangible assetsrelating to customer relationships, trademarks and trade names, an increase inpension and post-retirement liabilities for existing plans, the recognition ofother fair value adjustments and the impact of the new debt and equitystructure.

The recognition of thefair value of assets acquired resulted in higher net non-cash amortizationexpense. The new debt outstanding resulted in a significant increase ininterest expense. The cash outflow for interest expense is partially offset bytax deductions associated with such interest expense.

**Constant CurrencyAnalysis**

We maintain operations in more than 20 countries.Approximately 42% of our net sales for the year ended December 31, 2006originated in currencies other than the U.S. dollar, principally the Euro, theBritish pound sterling and the Canadian dollar. As a result, changes in ourrevenues and operating profits include the impact of changes in foreigncurrency exchange rates. We provide “constant currency” calculations in thisAnnual Report on Form 10-K to remove the impact of the fluctuationin foreign exchange rates.

We utilize constantcurrency results in our analysis of segment performance. This means that wehave translated financial data for a period into U.S. dollars using the sameforeign currency exchange rates that we used to translate financial data forthe previous comparable period. We believe that this calculation is a usefulmeasure, indicating the actual growth of our operations. Earnings from oursubsidiaries are not ordinarily repatriated to the United States, therefore wedo not incur significant gains or losses on foreign currency transactions withour subsidiaries. Therefore, changes in foreign currency exchange ratesprimarily impact only reported earnings and not our actual cash flow oreconomic condition.

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**Business Segments**

We report our financialresults on the basis of the following three business segments: North AmericanLab, European Lab and Science Education. Asia Pacific operations are embeddedwithin the North American Lab and European Lab segments. Both the NorthAmerican Lab and European Lab segments are comprised of the distribution ofsupplies to customers in major pharmaceutical, biotechnology, chemical,technology, food processing and consumer products industries, as well asgovernmental agencies, universities and research institutes and environmentalorganizations. Science Education is comprised of the manufacture anddistribution of scientific supplies and specialized kits principally to primaryand secondary schools in North America.

**Seasonality**

Our results of operationsare subject to seasonal trends primarily affecting our Science Educationsegment, which tend to result in increased net sales and operating income inthe third quarter in comparison to other quarters of the year. For example, in2006 and 2005, approximately 29% and 33%, respectively, of our total operatingincome was generated in the quarter ending September 30. This strongerquarterly performance is typically due to higher sales and operating income inour Science Education segment, as schools purchase supplies in preparation forthe beginning of the new school year, offset by a seasonal slowdown in ourEuropean Lab segment. Quarterly sales are also influenced by the number ofshipping days in a given fiscal quarter.

**Exploration ofStrategic Options**

On March 12, 2007,the Company announced that two investment banks have been retained to explorestrategic options for the Company.

**Stock-basedCompensation and Bonuses**

Our results of operationsfor 2006 were impacted by a significant increase in stock-based compensationand bonus expense as compared to prior periods. Such charges totaled $20.3million and $3.3 million in 2006 and 2005, respectively. This increase isprimarily attributable to (1) increased performance-based incentivecompensation earned under our 2006 Management Incentive Plan, (2) our adoptionof SFAS 123R as of January 1, 2006, (3) costs relating to rights topurchase shares of our common stock granted to certain executive officers andemployees treated as options, and (4) one-time bonus payments made to certainexecutive officers and employees in 2006 relating to option grants. See Note 15under “Item 8—Financial Statements and Supplementary Data” and “Item 11—ExecutiveCompensation” for more information.

**Results ofOperations**

Our net sales are derived primarily from the sale ofscientific supplies, including chemicals, glassware, instruments, protectiveclothing and other assorted laboratory products and the provision of services,including technical services, on-site storeroom services, warehousing andfurniture design, supply and installation. Freight costs that are billed to ourcustomers are also included in net sales.

Our cost of sales consists primarily of the cost ofinventory shipped and our cost of labor for services. Cost of sales alsoincludes freight expenses incurred to deliver products to customers as well ascredits for rebates earned from suppliers.

SG&A expenses primarily reflect the costs ofoperations dedicated to generating new sales, maintaining existing customerrelationships, enhancing technology capabilities, receiving customer orders 

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and maintaining ourdistribution center facilities. These expenses also include depreciation andamortization.

During the years ended December 31, 2006, 2005and 2004, inflation has not had a significant impact on our results ofoperations as we have been able to pass the majority of these increases throughto our customers. However, our earnings and cash flows could be adverselyaffected if we are unable to pass through future cost increases due toinflation or fuel costs.

On April 1, 2005, the Company acquired AGB forinitial cash consideration of approximately $23.8 million. AGB distributesscientific supplies and is headquartered in Dublin, Ireland. The results of AGBhave been included in the European Lab segment from the date of acquisition. OnApril 1, 2005, the Company acquired AI for cash consideration ofapproximately $16.8 million and common stock of approximately $0.5 million. AIperforms services and distributes scientific supplies in Puerto Rico and isheadquartered in San Juan, Puerto Rico. The results of AI have been included inthe North American Lab segment from the date of acquisition. On July 1,2005, the Company acquired TSL for cash consideration of approximately $3.1million. TSL performs technical services on laboratory equipment in theNetherlands, Germany, Belgium and France. The results of TSL have been includedin the European Lab segment from the date of acquisition. Had theseacquisitions occurred at the beginning of 2004, the pro-forma consolidatedstatements of operations would not have been materially different from theamounts reported.

On October 2, 2006,the Company acquired Sino for initial cash consideration of approximately $4.2million. Sino is located in Singapore and distributes laboratory chemicals,equipment and consumables. The results of Sino have been included in the NorthAmerican Lab segment from the date of acquisition. Had this acquisitionoccurred at the beginning of 2004, the pro-forma consolidated statements ofoperations would not have been materially different from the amounts reported.

***Net Sales***

Thefollowing table presents net sales and net sales growth by reportable segmentfor the years ended December 31, 2006, 2005 and 2004 (dollars inmillions):

| ** **          | ** ** | **Year Ended December 31,** | ** ** |
|---------------------|------------|--------------------------------------------|------------|
| ** **          | ** ** | **2006**                                   | ** ** | **% Change** | ** ** | **2005** | ** ** | **% Change** | ** ** | **2004** | ** ** |
| North American  Lab |       | $                                          | 1,966.0    |   |   | 3.3 | % |   | $ | 1,902.4 |   |   | 3.5 | % |   | $ | 1,837.2 |   |
| European Lab        |       | 1,137.6                                    |       |   | 4.4 | % |   | 1,089.8 |   |   | 5.3 | % |   | 1,035.3 |   |
| Science Education   |       | 154.0                                      |       |   | 5.5 | % |   | 146.0 |   |   | 9.9 | % |   | 132.9 |   |
| Total               |       | $                                          | 3,257.6    |   |   | 3.8 | % |   | $ | 3,138.2 |   |   | 4.4 | % |   | $ | 3,005.4 |   |

Net sales for 2006increased $119.4 million or 3.8%. Foreign currency and the acquisitions of AGB,AI and TSL favorably impacted net sales by $36.8 million. Excluding theseeffects, net sales increased 2.6% from 2005. Net sales for 2005 increased$132.8 million or 4.4% over 2004. Foreign currency and the acquisitions of AGB,AI and TSL accounted for $50.6 million of the increase. Excluding theseeffects, net sales increased 2.7% from 2004.

Net sales in our North American Lab segment for 2006increased $63.6 million or 3.3%. Foreign currency and the acquisition of AIfavorably impacted net sales by $16.1 million. Excluding these effects, netsales increased $47.5 million or 2.5% from 2005. During 2006, our net sales tocustomers in the pharmaceutical and biotechnology industries experiencedlow-single digit growth and our net sales to customers in industrial marketsachieved mid-single digit growth. These increases were partially offset bydeclines in net sales to our education customers. Net sales for 2005 increased$65.2 million or 3.5%. Foreign currency and the acquisition of AI accounted for$26.9 million of the increase. Excluding these effects, net sales increased2.1% from 2004. During 2005, our net sales to bio-pharmaceutical customers 

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were relatively flat andour net sales to education and industrial customers achieved low single-digitgrowth.

Net sales in our European Lab segment for 2006increased $47.8 million or 4.4%. Foreign currency and the acquisitions of AGBand TSL favorably impacted net sales by $20.7 million. Excluding these effects,net sales increased $27.1 million or 2.5% from 2005. For 2006, our net sales toour bio-pharmaceutical and industrial customers experienced mid-single digitgrowth. These increases were partially offset by declines in net sales to oureducation, reseller and clinical customers. Net sales for 2005 increased $54.5million or 5.3%. Foreign currency and the acquisitions of AGB and TSL favorablyimpacted net sales by $23.7 million. Excluding these effects, net salesincreased 3.0% from 2004. Our 2005 growth was primarily driven by ourbio-pharmaceutical and industrial markets and was partially offset by a declinein net sales to our reseller customers.

Net sales in our ScienceEducation segment for 2006 increased $8.0 million or 5.5%. This increase wasprimarily a result of growth in net sales to our publisher customers and partiallydue to growth in net sales to our consumer customers. Net sales for 2005increased $13.1 million or 9.9%. This increase was primarily driven byincreased sales to our education and publishers customers. In addition, thefirst half of 2004 was unfavorably impacted by budget constraints by certainstate and local governments, which limit the amount of funds available for thepurchase of scientific supplies for school laboratories.

***Gross Profit***

Thefollowing table presents gross profit for the years ended December 31,2006, 2005 and 2004 (dollars in millions):

| ** **                              | ** ** | **Year Ended December 31,** | ** ** |
|-----------------------------------------|------------|--------------------------------------------|------------|
| ** **                              | ** ** | **2006**                                   | ** ** | **2005** | ** ** | **2004** | ** ** |
| Gross profit                            |       | $                                          | 883.3      |   | $ | 803.7 |   | $ | 764.7 |   |
| Percentage of net sales  (gross margin) |       | 27.1                                       | %          | 25.6 | % | 25.4 | % |
|                                         |            |                                            |            |  |  |  |  |  |  |  |

Gross profit for 2006increased $79.6 million or 9.9%. Foreign currency and the acquisitions of AGB,AI and TSL favorably impacted gross profit by $11.1 million. Excluding theseeffects, gross profit increased $68.5 million or 8.5% from 2005. Our grossmargin percentages improved in each of our segments over the comparable periodsof 2005. The increases in North American Lab and European Lab are primarily aresult of favorable pricing, better mix and improved recovery of freight costs.The increases in Science Education are primarily a result of improved pricing,partially offset by increased international net sales, which generate somewhatlower margins.

Gross profit for 2005increased $39.0 million or 5.1%. Foreign currency and the acquisitions of AGB,AI and TSL accounted for $16.6 million of the increase. Excluding theseeffects, gross profit increased 2.9% from 2004. During 2005, our North AmericanLab margins improved slightly while both the European Lab and Science Educationmargins declined. The European Lab gross margin percentages decreased slightlyas a result of product mix and pricing pressures. Science Education grossmargin percentages decreased as a result of product mix, pricing pressures anda shift in customer buying patterns to open bid or auction purchasing.

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***Selling, General and Administrative Expenses***

Thefollowing table presents SG&A expenses, for the years ended December 31,2006, 2005 and 2004 (dollars in millions):

| ** **                                    | ** ** | **Year Ended December 31,** | ** ** |
|-----------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                    | ** ** | **2006**                                   | ** ** | **2005** | ** ** | **2004** | ** ** |
| Selling, general  and administrative expenses |       | $                                          | 693.3      |   | $ | 640.0 |   | $ | 619.3 |   |
| Percentage of net sales                       |       | 21.3                                       | %          | 20.4 | % | 20.6 | % |
|                                               |            |                                            |            |  |  |  |  |  |  |  |

Since the Acquisition in April 2004,we made significant investments in sales, marketing, and sourcing personnel tosupport our strategic growth plans and expanded our finance, legal and administrativecapabilities to support the Company as a stand-alone entity. In addition, wehave incurred significant costs to comply with the requirements ofSarbanes-Oxley during 2005 and especially in 2006. At the same time, we alsoimplemented various restructuring and cost reduction programs to partiallyoffset the costs of these investments, while redirecting resources to alignwith our strategy and improve operating effectiveness.

SG&A expenses for 2006 increased $53.3 million or8.3%. Foreign currency and the acquisitions of AGB, AI and TSL increasedSG&A by $9.1 million. Excluding these effects, SG&A expenses increased$44.2 million or 6.9% from 2005 primarily as a result of increases in bonusesof $13.3 million; increased information technology spending of $6.0 million,which includes spending to improve our application security; increased externalassistance related to our Sarbanes-Oxley program of $4.1 million; increaseddepreciation and amortization expense of $7.5 million reflecting additionalcharges due to capital investments, acquisitions and the impact of accountingerrors of $2.8 million described in Note 19 under “Item 8—Financial Statementsand Supplementary Data”; increased investments in our sourcing function andBioSciences business of $7.1 million and increased stock-based compensationcharges of $3.7 million, resulting from the expensing of stock options in 2006pursuant to SFAS 123R.

SG&A expenses for 2005increased $20.7 million or 3.3%. Foreign currency and the acquisitions of AGB,AI and TSL accounted for $12.7 million of the increase. Excluding theseeffects, SG&A expenses increased $8.0 million or 1.3% from 2004. Thisincrease primarily reflects our aforementioned investments in personnel,inflation, and costs incurred related to our compliance with the Sarbanes-OxleyAct. Partially offsetting the increase are savings from our restructuringprograms and lowerprovisions for bonus of approximately $7.1 million in North America, due toshortfalls from the 2005 Management Incentive Plan.

***Restructuring Charges***

During 2005, we initiated several cost reductionprograms in response to relatively static market conditions and implementedreductions in force and other cost containment measures and recorded pre-taxcharges of $20.6 million. In connection with these actions, we recordedrestructuring charges of $5.8 million, primarily severance, for North AmericanLab; $13.8 million, primarily related to the closing of a facility and theconsolidation of administrative operations in the UK and severances and relatedcosts for personnel in our UK, German, French, Nordic and Italian operations,for European Lab; and $1.0 million, primarily severance, for Science Education.During 2006, we reversed $1.0 million of excess accruals and creditedoperations primarily as a result of the re-deployment of certain personneloriginally included in the 2005 programs for North American Lab.

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***Operating Income***

Thefollowing table presents operating income and operating income as a percentageof net sales by reportable segment for the years ended December 31, 2006,2005 and 2004 (dollars in millions):

| ** **          | ** ** | **Year Ended December 31,** | ** ** |
|---------------------|------------|--------------------------------------------|------------|
| ** **          | ** ** | **2006**                                   | ** ** | **% of  Net Sales** | ** ** | **2005** | ** ** | **% of  NetSales** | ** ** | **2004** | ** ** | **% of  Net Sales** | ** ** |
| North American  Lab |       | $                                          | 112.2      |   |   | 5.7 | % |   | $ | 91.0 |   |   | 4.8 | % |   | $ | 93.6 |   |   | 5.1 | % |   |
| European Lab        |       | 59.4                                       |       |   | 5.2 | % |   | 38.1 |   |   | 3.5 | % |   | 37.2 |   |   | 3.6 | % |   |
| Science Education   |       | 19.4                                       |       |   | 12.6 | % |   | 14.0 |   |   | 9.6 | % |   | 14.6 |   |   | 11.0 | % |   |
| Total               |       | $                                          | 191.0      |   |   | 5.9 | % |   | $ | 143.1 |   |   | 4.6 | % |   | $ | 145.4 |   |   | 4.8 | % |   |

Operating income for 2006increased $47.9 million or 33.5%. Excluding the effects of foreign currency,the acquisitions of AGB, AI and TSL, due to the timing of the acquisitions, andthe restructuring activities discussed above, operating income increased $24.3million or 14.8% from 2005. This increase was the result of an increase ingross profit of $68.5 million partially offset by an SG&A increase of $44.2million. Operating income for 2005 decreased $2.3 million or 1.6% from 2004.Excluding the effects of foreign currency, the acquisitions of AGB, AI and TSL,and the restructuring programs discussed above, operating income increased$14.4 million or 9.9% over 2004. This increase was the result of improvement ingross profit of $22.4 million, primarily attributable to sales increases,partially offset by an SG&A increase of $8.0 million.

Operating income in our North American Lab segment for2006 increased $21.2 million or 23.3%. Excluding the effects of foreigncurrency, the acquisition of AI, due to the timing of the acquisition, and therestructuring activities discussed above, operating income increased $13.7million or 14.1% from 2005. This increase was the result of an increase ingross profit of $43.7 million, primarily attributable to pricing initiatives.This gross profit increase was offset by an SG&A increase of $30.0 million,due primarily to increases in bonuses of $12.7 million; increased informationtechnology spending of $6.0 million; increased external assistance related toour Sarbanes-Oxley program of $4.1 million; increased investments in oursourcing function and BioSciences business of $7.1 million and increasedstock-based compensation charges of $3.0 million. Operating income for 2005 decreased$2.6 million or 2.8% from 2004. Excluding the effects of foreign currency, theacquisition of AI, and the restructuring activities discussed above, operatingincome increased $0.7 million or 0.7% over 2004. This increase was a result ofa gross profit increase of $19.3 million offset by an SG&A increase of$18.6 million. The increase in SG&A reflects the investments in personneland costs incurred related to our compliance with the Sarbanes-Oxley Act,partially offset by the lower provisions for bonus, discussed in SG&Aabove.

Operating income in our European Lab segment for 2006increased $21.3 million or 55.9%. Excluding the effects of foreign currency,the acquisitions of AGB and TSL, due to the timing of the acquisitions, and therestructuring activities discussed above, operating income increased $6.2million or 11.9% from 2005. This increase was the result of an increase ingross profit of $19.5 million, primarily attributable to pricing initiatives,partially offset by an SG&A increase of $13.3 million, due primarily toinflation. Operating income of our French operations improved significantly in2006, reflecting improved pricing discipline and cost control. Our Irelandoperations offset the aforementioned improvement due to escalating operatingcosts, integration costs, and lower than anticipated revenue growth in 2006.Operating income for 2005 increased $0.9 million or 2.4% over 2004. Excludingthe effects of foreign currency, the acquisitions of AGB and TSL, and therestructuring activities discussed above, operating income increased $13.3million or 35.8% over 2004. This increase was a result of a gross profitincrease of $0.2 million and an SG&A decrease of $13.1 million reflectingsavings from both 2004 and 2005 restructuring initiatives. Included in thisincrease is an improvement in operating results in France of $5.1 million from2004.

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Operating income in ourScience Education segment for 2006 increased $5.4 million or 38.6%. Excludingrestructuring charges of $1.0 million in 2005, operating income for ScienceEducation increased $4.4 million or 29.3% over 2005. This increase is a resultof a gross profit increase of $5.3 million, partially offset by an increase inSG&A of $0.9 million. Operating income for 2005 decreased $0.6 million, or4.1% from 2004. Excluding restructuring charges of $1.0 million in 2005,operating income for Science Education increased $0.4 million or 2.7% over2004. This increase is a result of a gross profit increase of $2.9 millionattributable to sales volume, partially offset by an unfavorable mix ofbusiness and more aggressive buying patterns of customers, and an increase inSG&A of $2.5 million.

***Interest Expense, net of Interest Income***

Interest expense, net ofinterest income was $110.4 million, $104.0 million and $57.5 million for 2006,2005 and 2004, respectively. The 2006 increase was due to higher variableinterest rates on the Senior Secured Credit Facility term loans, interest onthe new Senior Floating Rate Notes since December 14, 2006, and increasedaccretion on the Senior Discount Notes, partially offset by decreased amountsoutstanding under the Senior Secured Credit Facility term loans as a result of$104.5 million of prepayments made in 2006 and increased interest income earnedon our cash and cash equivalents due to higher interest rates. The 2005increase was due to the new capital structure from the Acquisition being inplace for the entire year, interest expense on the Senior Discount Notes andhigher variable interest rates on the Senior Secured Credit Facility during2005 than 2004.

***Other Expense/(Income), net***

Other expense/(income),net was $1.5 million, ($3.8) million and ($2.0) million for 2006, 2005 and2004, respectively. Other expense, net in 2006 included net exchange losses of $2.0million offset by equity income of ($0.5) million. Other income, net in 2005included net exchange gains of ($2.8) million and equity income of ($0.5)million. Other income, net in 2004 included net exchange gains of ($1.5)million and equity income of ($0.5) million.

***Income Tax Provision***

The effective income taxrate was 41.3%, 48.7% and 42.4% for 2006, 2005 and 2004, respectively. Our 2006effective tax rate declined as a result of a $1.3 million reduction in deferredtax liabilities due to reduced future tax rates in Canada and lower chargesrelated to valuation allowances of approximately $3.0 million due to improvedFrench operations, partially offset by increased valuation allowances ofapproximately $1.0 million in Ireland where the statutory tax is significantlylower.

**Historical CashFlows**

***Cash Flows from Operating Activities***

Thefollowing table presents cash flow from operations related to operations andworking capital (dollars in millions):

| ** **                                            | ** ** | **Year Ended December 31,** | ** ** |
|-------------------------------------------------------|------------|--------------------------------------------|------------|
| ** **                                            | ** ** | **2006**                                   | ** ** | **2005** | ** ** | **2004** | ** ** |
| Cash flow from  operations, excluding working capital |       | $                                          | 140.7      |   | $ | 107.7 |   | $ | 100.9 |   |
| Cash flow from  working capital changes, net          |       | 32.5                                       |       | (37.6 | ) | 84.5 |   |
| Cash flow from  operations                            |       | $                                          | 173.2      |   | $ | 70.1 |   | $ | 185.4 |   |

 

We generated $173.2 million of cash flow from operationsduring 2006 compared to $70.1 million during 2005. The increase in cash flowfrom operations is primarily the result of increased net income, improvedmanagement of inventories, reduced cash payments for restructuring charges,increased taxes 

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payable due to increasedincome and related commercial taxes, and increased accrued bonuses. Theseincreases are partially offset by higher cash usage due to the growth of ouraccounts receivable discussed below.

We generated $70.1 million of cash flow fromoperations during 2005 compared to $185.4 million during 2004. The decrease incash from operations is a result of increased levels of working capital in 2005as compared to 2004. In 2005, cash flow from working capital changes used cashprimarily for cash payments for restructuring charges of $34.9 million andincreases in inventories of $29.0 million. These cash usages were partiallyoffset by an increase in our accounts payable of $32.4 million.

Days sales outstanding in accounts receivable were50.2, 48.2 and 49.0 days as of December 31, 2006, 2005 and 2004,respectively. Days sales outstanding are higher in Europe due to the extendedpayment practices in the countries in which we operate. The increase in 2006reflects a general slow down in the timing of customer payments attributable torising interest rates in 2006.

Days supply in inventory were 39.8, 43.1 and 39.1 daysas of December 31, 2006, 2005 and 2004, respectively. The 2006 improvementis a result of focused efforts to reduce our inventories on hand. The 2005increase is a result of changes in our supplier network and the stocking ofproducts from new suppliers.

Days payable outstandingwere 58.1, 59.1 and 52.5 days as of December 31, 2006, 2005 and 2004,respectively. Trade accounts payable are primarily with suppliers whoseproducts we distribute. Payment terms are negotiated and in cases whereeconomic early payment discounts are offered, we typically time our payments toearn the discounts. Days payable outstanding are generally higher in Europe dueto the extended payment practices in certain countries in which we operate.Depending on the timing of payments and inventory purchases, trade accountspayable can vary each quarter and from year to year.

***Cash Flows from Investing Activities***

Net cash used in investing activities was $24.1million, $62.2 million and $1,577.1 million for the years ended December 31,2006, 2005 and 2004, respectively. The 2006 usage primarily related to capitalexpenditures of $23.6 million. The 2005 usage primarily related to investmentsto acquire businesses of $46.0 million and capital expenditures of $18.4million. The 2004 usage primarily related to the Acquisition and capitalexpenditures of $16.4 million.

Our capital expendituresconsist of two principal components: expenditures for facilities andexpenditures for technology to support the business. The timing of warehouseexpansions may cause a variance in year-to-year capital expenditures. Weanticipate 2007 capital expenditures to approximate $30.0 million.

***Cash Flows from Financing Activities***

Net cash (used in)provided by financing activities was ($139.1) million, $3.4 million and$1,607.6 million for the years ended December 31, 2006, 2005 and 2004,respectively. Cash utilization in 2006 is primarily related to debt principalprepayments of ($104.5) million on the Senior Secured Credit Facility, adecrease in bank checks outstanding of ($33.4) million due primarily to thetiming of vendor payments, proceeds of $350.0 million from the issuance of theSenior Floating Rate Notes in December 2006, partially offset by adistribution to the holders of our common stock of ($343.5) million. The 2005cash provided is comprised of a net increase in our bank checks outstanding of$15.0 million, net debt payments of ($10.7) million, cash paid for debtissuance costs of ($0.8) million and net stock activities of ($0.1) million.The net cash provided in 2004 was primarily a result of the Acquisition, thenew capital structure we established, a net increase in our bank checksoutstanding and proceeds from the Stock Plan.

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***Liquidity and Capital Resources***

We broadly define liquidity as our ability to generatesufficient funds from both internal and external sources to meet ourobligations and commitments. In addition, liquidity includes the ability toobtain appropriate debt and equity financing. Therefore, liquidity cannot beconsidered separately from capital resources that consist of current orpotentially available funds for use in achieving long-range objectives and meetingdebt service commitments.

As of December 31, 2006, we had outstandingindebtedness of $1,687.6 million, which consists primarily of $520.0 millionaggregate principal amount of VWR Notes, $362.8 million of accreted value ofSenior Discount Notes, $350.0 million of Senior Floating Rate Notes, a $307.1million U.S. dollar-denominated term loan and a $141.6 million Euro-denominatedterm loan. Cash paid for interest during 2006 was $77.4 million as compared to$70.4 million in 2005. Based on borrowings outstanding and interest rates ineffect as of December 31, 2006, interest expense for the year ending December 31,2007 is expected to be higher than the 2006 amount due to the Senior FloatingRate Notes issued in December 2006. Prior to the Acquisition, interest onour push down debt did not represent cash interest, as we were not required topay Merck KGaA interest. The interest expense associated with the push downdebt was recorded as a capital contribution by Merck KGaA, net of tax.

As of December 31, 2006, we had $9.5 million ofoutstanding but undrawn letters of credit and our remaining borrowingavailability under the $150.0 million multi-currency revolving credit facilityforming part of the Senior Secured Credit Facility was $140.5 million. Undrawnamounts under the multi-currency revolving credit facility will be available tomeet future working capital and our other business needs. Any potentialborrowings under the multi-currency revolving credit facility bear interest atvariable rates, interest expense for any such borrowings would fluctuate aswell.

Under the credit agreement for the Senior SecuredCredit Facility, beginning in 2006, VWR’s excess cash flow (as defined in thecredit agreement) from the prior year was required to be used to prepay creditagreement debt. In March 2006, a $44.5 million mandatory principalprepayment was made based on VWR’s excess cash flow generated in 2005. On March 30,2007, $20.5 million will be repaid as required by VWR’s excess cash flowprovisions of the Senior Secured Credit Facility. In September 2006, a$60.0 million voluntary principal prepayment was made.

Based upon current levelsof operations and expectations as to future growth, we believe that cash onhand, cash generated from operations and amounts available under our $150.0million multi-currency revolving credit facility will be adequate to permit usto meet our debt service obligations, capital expenditure requirements, ongoingoperating costs and working capital needs until the maturity of the SeniorSecured Credit Facility, although no assurance can be given in this regard. Ourfuture financial and operating performance, ability to service or refinance ourdebt and ability to comply with covenants and restrictions contained in ourdebt agreements will be subject to future economic conditions and to financial,business and other factors, many of which are beyond our control and will besubstantially dependent on the global economy, demand for our products, and ourability to successfully implement our overall business and profitabilitystrategies. As of December 31, 2006, we had $139.4 million of cashand cash equivalents on hand.

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**Schedule ofContractual Obligations**

**Thefollowing tables detail the payment schedule for debt, capital leases and operatingleases as of December 31, 2006 (dollars in millions):**

| ** **                                              | ** ** | **<1 year** | ** ** | **1-3 years** | ** ** | **4-5 years** | ** ** | **>5 years** | ** ** | **Total** | ** ** |   |
|---------------------------------------------------------|------------|---------------------|------------|--------------------|------------|--------------------|------------|----------------------|------------|-----------|------------|--------|
| Senior Secured  Credit Facility                         |       | $                   | 20.5       | (1)                |       | $                  | 9.4        |                 |       | $         | 418.8      |   | $ | — |   | $ | 448.7 |   |
| 6.875% Unsecured  Senior Notes due 2012                 |       | —              |       |               | —     |               |       | —               |       | 200.0     |       | 200.0  |   |
| 8% Unsecured  Senior Subordinated Notes due 2014        |       | —              |       |               | —     |               |       | —               |       | 320.0     |       | 320.0  |   |
| 9.625% Senior  Discount Notes due 2015 (accreted value) |       | —              |       |               | —     |               |       | —               |       | 481.0     |       | 481.0  |   |
| Senior Floating  Rate Notes due 2011                    |       | —              |       |               | —     |               |       | 350.0                |       | —    |       | 350.0  |   |
| Interest(2)                                             |       | 77.3                |       |               | 138.2      |               |       | 414.9                |       | 224.6     |       | 855.0  |   |
| Bank loans                                              |       | 0.3                 |       |               | —     |               |       | —               |       | —    |       | 0.3    |   |
| Capital leases                                          |       | 1.0                 |       |               | 1.4        |               |       | 1.4                  |       | 2.0       |       | 5.8    |   |
| Operating leases                                        |       | 28.5                |       |               | 39.9       |               |       | 27.3                 |       | 37.3      |       | 133.0  |   |
| Total                                                   |       | $                   | 127.6      |               |       | $                  | 188.9      |                 |       | $         | 1,212.4    |   | $ | 1,264.9 |   | $ | 2,793.8 |   |
|                                                         |            |                     |            |                    |            |                    |            |                      |            |           |            |        |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)          Reflects the amount due March 2007based on VWR’s excess cash flow generated in 2006.

(2)          For purposes ofcalculating interest noted above, interest rates and effects of foreigncurrency on the Senior Secured Credit Facility were assumed to be unchangedfrom levels at December 31, 2006 and we assumed no cash interest will bepaid on the Senior Floating Rate Notes until maturity. In addition, theprincipal amounts outstanding at December 31, 2006 under the SeniorSecured Credit Facility were adjusted for the mandatory principal prepaymentsnoted above.

Prior to the Acquisition,substantially all of VWR’s debt was with Merck KGaA and affiliates at anaverage interest rate of 2.0% to 2.8%. The push down debt reflects the debtincurred by Merck KGaA as a result of its acquisition of VWR. A portion of thecash consideration for the Acquisition was used to repay all debt owing toMerck KGaA and affiliates outstanding on April 7, 2004.

**Indebtedness**

***Senior Secured Credit Facility.***   On April 7,2004, VWR, with a syndicate of lenders, led by Deutsche Bank AG, New YorkBranch, as administrative agent, Citicorp North America Inc., as syndicationagent, and Bank of America, N.A., BNP Paribas and Barclays Bank PLC, asdocumentation agents, entered into the Senior Secured Credit Facility. VWR isthe borrower under the Senior Secured Credit Facility. The Senior SecuredCredit Facility consists of (1) a term loan facility providing for a loandenominated in Euros, in an aggregate principal amount currently outstanding of$141.6 million as of December 31, 2006, (2) a term loan facilityproviding for a term loan denominated in U.S. dollars in an aggregate principalamount currently outstanding at $307.1 million, and (3) a multi-currencyrevolving credit facility, providing for up to $150.0 million in multi-currencyrevolving loans (reduced by the amount of any standby and commercial letters ofcredit drawn under that facility) outstanding at any time.

As of December 31,2006, no amount was outstanding under the multi-currency revolving creditfacility, and we had $9.5 million in undrawn letters of credit and up to$140.5 million of additional debt that could be incurred as revolvingloans or under standby and commercial letters of credit. Undrawn amounts underthe multi-currency revolving credit facility are available on a revolvingcredit basis for our general corporate purposes. The Senior Secured CreditFacility permits one or more of VWR’s foreign subsidiaries to become borrowersunder the facility upon the satisfaction of certain conditions. In August of2006, the Senior Secured Credit Facility was amended to allow for $60.0 millionto be spent on acquisitions going forward, subject to annual increases.

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Borrowings under theSenior Secured Credit Facility are a key potential source of our liquidity. VWR’sability to borrow under the Senior Secured Credit Facility is dependent upon,among other things, VWR’s compliance with the financial covenants that limitVWR’s ability to incur additional indebtedness, pay cash dividends and makecertain other payments as set forth in the credit agreement for the SeniorSecured Credit Facility. The financial covenants include a specified debt toCredit Agreement EBITDA leverage ratio and a specified Credit Agreement EBITDAto interest expense coverage ratio for specified periods, as those terms aredefined and relate to VWR. Failure of VWR to comply with these financial ratiocovenants would result in a default under the credit agreement for the SeniorSecured Credit Facility and, absent a waiver or an amendment from our lenders,would permit the acceleration of all outstanding borrowings under the SeniorSecured Credit Facility. VWR was in compliance with these financial covenantsas of December 31, 2006.

Credit Agreement EBITDA aspresented herein is a VWR financial measure that is used in the creditagreement for the Senior Secured Credit Facility. Credit Agreement EBITDA isnot a defined term under U.S. GAAP and should not be considered as analternative to operating income or net income as a measure of operating resultsor cash flows as a measure of liquidity. Credit Agreement EBITDA differs fromthe term “EBITDA” as it is commonly used as a non-GAAP financial measure.Credit Agreement EBITDA generally is defined as consolidated net income beforeconsolidated net interest expense, consolidated income taxes, consolidateddepreciation and amortization, other non-cash charges deducted in determiningconsolidated net income (loss), non-cash provisions for reserves fordiscontinued operations, extraordinary, unusual or non-recurring items, gain orloss associated with the sale or write down of assets not in the ordinarycourse of business and the cumulative effect of accounting changes and earningsof, but including cash dividends or distributions from, non-controlledaffiliates. Credit Agreement EBITDA is reduced by the amount of certainpermitted dividends from VWR to CDRV Holdings, Inc.

CreditAgreement EBITDA is not a financial measure used in the covenants under theindentures for the notes. The term “Consolidated EBITDA” is used in theindentures as part of the calculation of the term “Consolidated Coverage Ratio”,which is used for a number of purposes, including determining our ability toincur additional indebtedness and pay cash dividends and make certain otherrestricted payments, and may include certain cost savings or synergies. “ConsolidatedEBITDA” is not the same as Credit Agreement EBITDA.

Thefollowing table presents a calculation of VWR’s Credit Agreement EBITDA for theyear ended December 31, 2006 (dollars in millions):

| Income before cumulative  effect of a change in accounting principle             |   | $    | 68.7   |   |
|----------------------------------------------------------------------------------|--------|------|--------|--------|
| Income tax provision                                                             |   | 44.3 |   |
| Interest expense, net                                                            |   | 76.6 |   |
| Depreciation and  amortization                                                   |   | 41.4 |   |
| Non-cash charges(1)                                                              |   | 11.7 |   |
| Other extraordinary, unusual  or non-recurring items(2)  Credit Agreement EBITDA |   | 1.7  |   |
|                                                                             |   | $    | 244.4  |   |

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(1)          Non-cashcharges include pension, postretirement and post employment benefit expenses,net of cash contributed to the respective benefit plans in that year;amortization of direct response catalog costs for those catalogs with usefullives greater than one year; charges for equity compensation; and LIFOadjustments.

(2)          Otherextraordinary, unusual or non-recurring items include one-time severance costs;non-routine inventory reserve adjustments; gains or losses on the sale ofbusinesses or facilities; and other extraordinary, unusual or non-recurringgains, losses, charges or credits.

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Thefinancial covenants in the credit agreement specify, among other things, thefollowing requirements for each four-quarter period ended during the followingtest periods:
| Test Period                                    | ** ** | ** ** | ** **   | **Consolidated Debt to  Credit Agreement EBITDA  Leverage Ratio Not More Than** | ** ** | **Credit Agreement EBITDA to  Credit Agreement Interest  Expense Ratio Not Less Than** | ** **   |
|-----------------------------------------------------|------------|------------|--------------|-------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------|--------------|
| December 31,  2006—December 30, 2007 |       |       | 6.50 to 1.00 |                                                                                                                    |       |                                                                                                                                | 2.00 to 1.00 |   |   |
| December 31,  2007—December 30, 2008 |       |       | 6.00 to 1.00 |                                                                                                                    |       |                                                                                                                                | 2.10 to 1.00 |   |   |
| December 31,  2008—December 30, 2009 |       |       | 5.50 to 1.00 |                                                                                                                    |       |                                                                                                                                | 2.20 to 1.00 |   |   |
| December 31,  2009—December 30, 2010 |       |       | 5.00 to 1.00 |                                                                                                                    |       |                                                                                                                                | 2.30 to 1.00 |   |   |
| December 31, 2010  and thereafter              |       |       | 5.00 to 1.00 |                                                                                                                    |       |                                                                                                                                | 2.40 to 1.00 |   |   |

 

Thetable below sets forth VWR’s specified debt to Credit Agreement EBITDA leverageratio and Credit Agreement EBITDA to interest expense ratio for the year ended December 31,2006:

| Consolidated Debt to Credit  Agreement EBITDA Leverage Ratio           |   | 4.1 to 1.0 |   |
|------------------------------------------------------------------------|--------|------------|--------|
| Credit Agreement EBITDA  to Credit Agreement Interest Expense Ratio(1) |   | 3.4 to 1.0 |   |

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(1)          For purposes ofcalculating the compliance ratio noted above, credit agreement interest expensewas based on actual interest expense, net of interest income, reduced byamortization of deferred financing fees.

As noted above, the credit agreement for the SeniorSecured Credit Facility restricts VWR’s ability to transfer assets, pay cashdividends and make certain other payments to its direct or indirect parentcompanies. In January 2007, VWR amended provisions in the credit agreementto conform them in certain respects to the provisions in the indenturesgoverning the VWR Notes, including the indebtedness, restricted payments andinvestments covenants. The modifications permit VWR to pay or make specifiedcash dividends, payments or distributions to allow the Company to make cashinterest payments on the Senior Floating Rate Notesand to make other payments, subject to the indentures governingsuch notes. In addition, as part of the amendmentto the credit agreement, the interest margin on the Euro-denominated term loanwas decreased by 50 basis points.

***ForeignSubsidiaries.***   Our foreign subsidiariesoperate from time to time with and without formal lines of credit with localbanks. The borrowings available to and drawn from time to time by our foreignsubsidiaries are limited in aggregate by certain covenants contained within theSenior Secured Credit Facility.

***VWR Notes.******  ***On April 7, 2004, VWR issued 67¤8% senior notesand 8% senior subordinated notes that mature on April 15, 2012 and April 15,2014, respectively, in the aggregate principal amounts of $200.0 million and$320.0 million, respectively, to finance a portion of the Acquisition.

The indentures governing the VWR Notes contain certaincovenants that, among other requirements, limit VWR’s ability to incuradditional indebtedness and liens against VWR’s property and assets, limit VWR’sability to transfer assets, pay cash dividends and make certain otherrestricted payments (unless certain conditions are met), and limit VWR’sability to sell assets or restrict the use of the proceeds therefrom. At December 31,2006, VWR was in compliance with all covenants under these indentures.

***Senior DiscountNotes.******  ***On December 16,2004, we issued $481.0 million aggregate principal amount at maturity ($297.9 millionin net proceeds) of 95¤8%senior discount notes due 2015. The net proceeds of the issuance were used topay a cash dividend to holders of our common stock in December 2004. Inconnection with various transactions involving the issuance of the SeniorFloating Rate Notes, in December 2006, CDRV Investment HoldingsCorporation, a new wholly owned subsidiary, assumed the 

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obligations under theSenior Discount Notes. We guarantee the Senior Discount Notes on an unsecuredsenior subordinated basis. The Senior Discount Notes are senior unsecuredobligations of CDRV Investment Holdings Corporation and are structurallysubordinated to all obligations and other liabilities of CDRV Investment HoldingsCorporation’s existing and future subsidiaries. No cash interest will accrue onthe Senior Discount Notes prior to January 1, 2010. Thereafter, cashinterest will accrue and be payable semiannually in arrears on January 1,and July 1 of each year, commencing on July 1, 2010, at the rate of 95¤8%per annum, provided that on any interest payment date, interest will be payableonly to the extent of funds actually available for distribution by oursubsidiaries to CDRV Investment Holdings Corporation under specified provisionsof the indentures governing the VWR Notes and the Senior Secured CreditFacility covenants. As of December 31, 2006, the accreted value of theSenior Discount Notes was $362.8 million.

***Senior FloatingRate Notes.******  ***OnDecember 14, 2006, we issued $350.0 million aggregate principal amount ofsenior floating rate notes due 2011. The proceeds from the issuance, net ofrelated expenses, were used to pay a distribution to the holders of our commonstock. The Senior Floating Rate Notes are senior unsecured obligations of theCompany and are structurally subordinated to all obligations and otherliabilities of the Company’s existing and future subsidiaries. Interest ispayable quarterly. Interest on the Senior Floating Rate Notes may be paid (1) entirelyin cash (“Cash Interest”), (2) entirely by increasing the principal amountof the outstanding Senior Floating Rate Notes (“PIK Interest”) or (3) 50%as Cash Interest and 50% as PIK Interest. Cash Interest will accrue on the SeniorFloating Rate Notes at a rate per annum equal to an applicable LIBOR rate plusan applicable spread (as defined in the indenture) (“Cash Interest Rate”). PIKInterest will accrue on the Senior Floating Rate Notes at a rate per annumequal to the Cash Interest Rate plus 75 basis points.

VWR does not guarantee theobligations under the Senior Discount Notes or Senior Floating Rate Notes. Theterms of the Senior Secured Credit Facility and the indentures governing theVWR Notes significantly restrict VWR from making distributions and otherwisetransferring assets to its direct or indirect parent companies or anyaffiliated entities. However, as noted above, in January 2007, VWR amendedthe provisions of the credit agreement for the Senior Secured Credit Facilityto provide VWR with more flexibility to makedividends or other payments to enable the Company to pay Cash Interest withrespect to the Senior Floating Rate Notes. On March 1, 2007, VWR paid a dividend of $7.4 million that enabledus to make a Cash Interest payment with respect to the Senior Floating RateNotes.

**Critical AccountingPolicies**

The policies discussed below are considered bymanagement to be critical to an understanding of our financial statementsbecause their application places the most significant demands on management’sjudgment, with financial reporting results relying on estimation about theeffect of matters that are inherently uncertain. Specific risks for thesecritical accounting policies are described in the following paragraphs. For allof these policies, management cautions that future events rarely developexactly as forecast, and such estimates routinely require adjustment.

***Accounts Receivableand Reserves.***   The carrying amount ofaccounts receivable reflects a reserve representing our estimate of the amountsthat will not be collected for losses due to uncollectibility and for estimatedsales returns and allowances. In addition to reviewing delinquent accountsreceivable, we consider many factors in estimating our reserve, includinghistorical data, experience, customer types, credit worthiness, and economictrends. From time to time, we may adjust our assumptions for anticipatedchanges in any of these or other factors expected to affect collectibility.

***Inventories.***   Inventoriesare valued at the lower of cost or market, cost being determined principally bythe last-in, first-out (“LIFO”) method for the U.S. subsidiaries and theaverage cost or the first-in, first-out method for all other subsidiaries.During the year, estimates of the impact of LIFO are based upon full 

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year estimates of theimpact of LIFO and such estimates may change during the course of the yearbased upon various factors such as price increases and inventory turnover. Wereview our inventory realization based upon several factors, including customerdemand, supply of inventory and competitive activity and record reserves forobsolescence based upon those and other factors. From time to time, we mayadjust our assumptions for anticipated changes in any of these or otherfactors.

***Rebates fromSuppliers.***   We earn rebates from certain ofour suppliers from the achievement of certain sales growth and/or purchasevolume thresholds. To the extent that rebates relate to inventory on hand, theinventory cost is reduced to reflect the lower cost. During the course of theyear, estimates made concerning the achievement of these goals or milestonescan vary from quarter to quarter. Generally, a proportionally larger amount ofrebates are earned in the fourth quarter of each year.

***Agreements withCustomers.***   We have agreements with severalof our customers, which contain provisions related to pricing, volume purchaseincentives and other contractual provisions. During the course of the year,estimates are made concerning customer contracts and changes in estimatesrelated to these contracts may vary from quarter to quarter and are recorded asa reduction to sales.

***Goodwill andIntangible Assets.***   In accordance with SFAS142, goodwill is no longer amortized, but rather, is evaluated for impairmenton an annual basis or between annual tests if events occur or circumstanceschange that would more likely than not reduce the fair value of a reportingunit below its carrying amounts. To accomplish this, we were required toidentify our reporting units and determine the carrying value of each reportingunit by assigning the assets and liabilities, including the existing goodwilland intangible assets, to those reporting units. We are required to determinethe fair value of each reporting unit and compare it to the carrying amount ofthe reporting unit. Fair value of the reporting unit is determined using acombination of discounted cash flows and multiple of earnings valuationtechniques. To the extent the carrying amount of a reporting unit exceeded thefair value of the reporting unit, we would be required to perform the secondstep of the transitional impairment test, as this is an indication that thereporting unit goodwill may be impaired.

As a result of the Acquisition, we have recognizedsignificant intangible assets. In accordance with the provisions of SFAS 142,we reevaluate the estimated useful lives of our intangible assets annually.Those intangible assets considered to have indefinite useful lives are notamortized but are evaluated for impairment on an annual basis, by comparing thefair value of the intangible asset to its carrying value. In addition, wheneverevents or changes in circumstances indicate that the carrying value ofintangible assets might be less than the fair value, we perform an impairment review.Fair value of intangible assets is determined using a discounted cash flowapproach. We have determined that our trademarks and trade names haveindefinite lives because they do not have legal, regulatory, contractual,competitive, or economic limitations and are expected to contribute to thegeneration of cash flows indefinitely. Intangible assets with finite usefullives are amortized over their respective estimated useful lives to theirestimated residual values, and reviewed for impairment in accordance with SFAS No. 144,*Accounting for Impairment or Disposal ofLong-Lived Assets*.

Our estimates are based upon historical trends,management’s knowledge and experience and overall economic factors includingprojections of future earnings potential. While we believe our estimates arereasonable, different assumptions regarding items such as future earningspotential and volatility in the markets we serve could affect our evaluationsand result in write-downs to the carrying amount of our goodwill and ourintangible assets.

***Product Liability.***   Weare subject to product liability and other claims in the ordinary course ofbusiness. Our business involves a risk of product liability and other claims inthe ordinary course of business, and from time to time we are named as adefendant in cases as a result of our distribution of scientific supplies.While the impact on us of this litigation has typically been immaterial, therecan be no 

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assurance that the impactof the pending and any future claims will not be material to our business,financial condition and results of operations in the future.

***EnvironmentalLiabilities.***   We record accruals forenvironmental liabilities based on current interpretations of environmentallaws and regulations when it is probable that a liability has been incurred andthe amount can be reasonably estimated. Our estimates are based upon severalfactors, including reports prepared by environmental specialists and management’sknowledge and experience with these environmental matters. Inherentuncertainties exist in these estimates due to unknown conditions, changing lawsand regulations and changes in the manner or method of enforcement of such lawsand regulations. Accrued liabilities and payments related to environmentalliabilities have not been material. Although management uses its best estimateswhen establishing accruals for environmental liabilities, if interpretations ofapplicable laws and regulations, cleanup methods or the extent of ourresponsibility change from our current estimates, revisions to our estimatedenvironmental liabilities may be required.

***Pension Plans.***   Wehave defined benefit pension plans covering a significant number of domesticand international employees. Accounting for these plans requires the use ofassumptions, including estimates on the expected long-term rate of return onassets, discount rates and the average rate of increase in employeecompensation. In order to make informed assumptions, management consults withactuaries and reviews public market data and general economic information. Weperiodically assess these assumptions based on market conditions, and if thoseconditions change, our pension cost and pension obligation may be adjustedaccordingly.

***Stock Options.***   Priorto January 1, 2006, we measured compensation expense for our stock-basedcompensation plans using the intrinsic value method of Accounting PrinciplesBoard Opinion No. 25, *Accounting forStock Issued to Employees* (“APB 25”). Under the intrinsic valuemethod, compensation cost is the excess, if any, of the fair market value ofour common stock at the grant date over the amount an employee must pay toacquire the stock. While our consolidated financial statements have used theabove measure, SFAS 123R also requires that we present pro-forma amounts as ifa fair value method of accounting for a stock option or similar equityinstrument were applied. Effective January 1, 2006, we adopted SFAS 123R.Under SFAS 123R, the fair value of the stock option is determined using anoption-pricing model that takes into account the fair value of the stock at thegrant date, the exercise price, the expected life of the option, the volatilityof the underlying stock and its expected dividends, and the risk-free interestrate over the expected life of the option. These assumptions are highlysubjective and changes in them could significantly impact the value of theoption and future compensation charges as well as pro-forma compensation cost.

***Estimates and Other Accounting Policies.***   Thepreparation of financial statements in conformity with U.S. GAAP requiresmanagement to make estimates and assumptions that affect the reported amountsof assets and liabilities and disclosure of contingent assets and liabilitiesat the date of the financial statements and the reported amounts of revenuesand expenses during the reporting period. Management evaluates its estimates andjudgments, including those related to product returns, intangible assets,income taxes, restructuring costs, insurance-related retained losses, andcontingencies and litigation. While actual results could differ from thoseestimates, management believes that the estimates are reasonable.

**New AccountingStandards**

The following accounting standards were adopted during2006. The impact, if any, of these accounting standards is included in ourfinancial statements.

We adopted SFAS 123R, effective January 1, 2006,which requires companies to recognize in the income statement, the grant datevalue of stock options and other forms of equity-based compensation issued toemployees. The Company previously accounted for stock options granted to ouremployees using the intrinsic value method of APB 25. Under APB 25, the Companydid not recognize compensation 

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expense for optionsgranted to our employees because such options had an exercise price equal totheir fair market value on the date of grant. See Note 15 under “Item 8—FinancialStatements and Supplementary Data” for further discussion of stock-basedcompensation.

During September 2006, the FASB issued SFAS 158.This Statement requires balance sheet recognition of the funded status for allpension and postretirement benefit plans. The Company adopted the provisions ofSFAS 158 as of December 31, 2006. See Note 14 under “Item 8—FinancialStatements and Supplementary Data” for further discussion of the impact of SFAS158.

During September 2006, the Securities and ExchangeCommission issued Staff Accounting Bulletin No. 108, *Considering the Effects of Prior Year Misstatementswhen Quantifying Misstatements in Current Year Financial Statements*(“SAB 108”). SAB 108 was issued in order to eliminate the diversity in practicesurrounding how registrants quantify financial statement misstatements. SAB 108requires that registrants quantify the impact on the current year’s financialstatements of correcting all misstatements, including the carryover andreversing effects of prior years’ misstatements, as well as the effects oferrors arising in the current year. SAB 108 is effective for fiscal yearsending after November 15, 2006. The implementation of SAB 108 did not havea material effect on our financial position or results of operations.

The following accounting standards will be adoptedprospectively.

During July 2006, the FASB issued Interpretation No. 48,*Accounting for Uncertainty in Income Taxes*(“FIN 48”). This Interpretation clarifies the accounting for uncertainty in incometaxes recognized in accordance with SFAS No. 109, *Accounting for Income Taxes.*FIN 48provides guidance on the financial statement recognition and measurement of atax position taken or expected to be taken in a tax return, derecognition,classification, interest and penalties, accounting in interim periods,disclosures, and transition. FIN 48 is effective for fiscal years beginningafter December 15, 2006. Based on our current assessment, we do not expectthat the adoption of FIN 48 will be material.

During September 2006,the FASB issued SFAS No. 157, *FairValue Measurements* (“SFAS 157”). This Statement defines fair value,establishes a framework for measuring fair value and expands disclosures aboutfair value measurements required under other accounting pronouncements, butdoes not change existing guidance as to whether or not an instrument is carriedat fair value. SFAS 157 is effective for fiscal years beginning after November 15,2007. We are currently evaluating the impact this Statement will have on ourconsolidated financial statements.

**Market and IndustryData**

Information contained inthis Form 10-K regarding the global laboratory supply industry,including our general expectations concerning the industry, are based onestimates prepared using data from various sources and on assumptions made byus. We believe data regarding the global laboratory supply industry areinherently imprecise, but based on management’s understanding of the markets inwhich we compete, management believes that such data is generally indicative ofthe industry. Our estimates, in particular as they relate to our generalexpectations concerning the global laboratory supply industry, involve risksand uncertainties and are subject to change based on various factors, includingthose discussed in “Item 1A—Risk Factors”.

**ITEM 7A.**   QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

***Interest Rates.***   Weare exposed to changes in interest rates, primarily as a result of our existingshort-term and long-term debt with both fixed and floating interest rates. A100 basis point (or 1.00%) change in variable rate debt outstanding as of December 31,2006 would, on an annualized basis, affect net income by approximately $4.8million.

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The Senior Secured Credit Facility required us toenter into interest rate protection agreements which, together with fixedinterest rates then applicable to our consolidated funded indebtedness, wouldprovide interest rate protection with respect to at least 50% of ourconsolidated funded indebtedness for a period of time, for the first two years.Effective July 21, 2004, VWR entered into an interest rate cap, whichhedged a portion of the variability of cash flows related to potential changesin interest rates on €35.0 million of ourEuro-denominated term loan facility. This agreement was for two years and wasnot renewed upon its expiration in July 2006. In the future, we may useinterest rate swaps or other derivatives to manage interest rate risk on futureincome caused by interest rate changes on the variable rate facilities underthe Senior Secured Credit Facility. If swaps are used, the differential to bepaid or received under the agreements would be recognized as an adjustment tointerest expense related to the debt.

***Foreign CurrencyHedging.***   The value of certain foreigncurrencies as compared to the U.S. dollar may affect our financial results.Fluctuations in exchange rates may positively or negatively affect our netsales, gross margins, operating expenses, cash flows and retained earnings, allof which are expressed in U.S. dollars. However, net sales and costs tend to beincurred in the same currency, and therefore, mitigate local currency risks.

Where we deem it prudent, we have engaged in hedgingprograms, using primarily foreign currency forward contracts, aimed at limitingthe impact of foreign currency exchange rate fluctuations on cash flows andearnings. Cash flows from currency forward contracts accounted for as hedgesare classified in the statement of cash flows in the same category as the itembeing hedged or on a basis consistent with the nature of the instrument. Theseactivities have not been material to our financial statements. We may purchaseshort-term foreign currency forward contracts to protect against currencyexchange risks associated with long-term intercompany loans due from or betweenour international subsidiaries and the payment of merchandise purchases toforeign vendors or receipts from customers. The majority of our debt, includingthe notes, is denominated in U.S. dollars, and accordingly, the majority of ourfuture debt service needs will be U.S. dollar denominated. We have aEuro-denominated term loan in an aggregate principal amount of $141.6 millionas of December 31, 2006 and a $150.0 million multi-currency revolvingcredit facility forming part of the Senior Secured Credit Facility, as well asborrowings under certain local credit facilities, each of which partiallymitigates our currency risk with respect to future debt service. Net sales andcosts tend to be incurred in the same currency, and therefore mitigate localcurrency risk.

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**ITEM 8.**                FINANCIALSTATEMENTS AND SUPPLEMENTARY DATA

The following financial statements and schedule ofCDRV Investors, Inc. (Successor) and VWR International Corporation(Predecessor) for the periods indicated are included in this 10-K.

Theterm “Successor” refers to CDRV Investors, Inc. following the Acquisition.The term “Predecessor” refers to VWR International Corporation prior to theAcquisition on April 7, 2004. 

|                                                                                                                                                                                                              | **Page** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------|
| **CDRV INVESTORS, INC (Successor) and VWR  INTERNATIONAL CORPORATION (Predecessor)**                                                                                                                         |     |   |   |
| Report of Independent  Registered Public Accounting Firm                                                                                                                                                     |     | 43 |   |
| Consolidated Balance  Sheets as of December 31, 2006 and 2005                                                                                                                                           |     | 44 |   |
| Consolidated Statements  of Operations for the years ended December 31, 2006 and 2005 and the  periods included in the year ended December 31, 2004                                                |     | 45 |   |
| Consolidated Statements  of Stockholders’ Equity and Other Comprehensive Income for the years ended  December 31, 2006 and 2005 and the periods included in the year ended  December 31, 2004 |     | 46 |   |
| Consolidated Statements  of Cash Flows for the years ended December 31, 2006 and 2005 and the  periods included in the year ended December 31, 2004                                                |     | 48 |   |
| Notes to Consolidated  Financial Statements                                                                                                                                                                  |     | 49 |   |
| Schedule II—Valuation and Qualifying Accounts for  the years ended December 31, 2006 and 2005 and the periods included in  the year ended December 31, 2004.                                  |     | 130 |   |

 

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**Reportof Independent Registered Public Accounting Firm**

The Board of Directors andStockholdersCDRV Investors, Inc.:

We have audited theaccompanying consolidated balance sheets of CDRV Investors, Inc. andsubsidiaries (Successor) as of December 31, 2006 and 2005, and the relatedconsolidated statements of operations, stockholders’ equity and othercomprehensive income, and cash flows for the years ended December 31, 2006and 2005 and for the period from April 7, 2004 to December 31, 2004(Successor periods) and from January 1, 2004 to April 6, 2004(Predecessor period). In connection with our audits of the consolidatedfinancial statements, we also have audited the financial statement schedule forthe Successor and Predecessor periods. These consolidated financial statementsand financial statement schedule are the responsibility of the Company’smanagement. Our responsibility is to express an opinion on these consolidatedfinancial statements based on our audits.

We conducted our audits inaccordance with the standards of the Public Company Accounting Oversight Board(United States). Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financial statements. An auditalso includes assessing the accounting principles used and significantestimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audits provide a reasonable basisfor our opinion.

In our opinion, theaforementioned Successor consolidated financial statements referred to abovepresent fairly, in all material respects, the financial position of CDRVInvestors, Inc. and subsidiaries as of December 31, 2006 and 2005,and the results of their operations and their cash flows for the Successorperiods in conformity with U.S. generally accepted accounting principles.Further, in our opinion, the aforementioned Predecessor consolidated financialstatements present fairly, in all material respects, the results of operationsand cash flows of VWR International Corporation and subsidiaries for thePredecessor periods, in conformity with U.S. generally accepted accountingprinciples. Also in our opinion, the related consolidated financial statementschedule, when considered in relation to the basic consolidated financialstatements taken as a whole, presents fairly, in all material respects, the informationset forth therein.

We also have audited, inaccordance with the standards of the Public Company Accounting Oversight Board(United States), the effectiveness of CDRV Investors, Inc.’s internalcontrol over financial reporting as of December 31, 2006, based on criteria established in*Internal Control—Integrated Framework*issuedby the Committee of Sponsoring Organizations of the Treadway Commission (COSO),and our report dated March 30, 2007 expressed an unqualified opinion on management’s assessment of, and the effectiveoperation of, internal control over financial reporting.

As discussed in Note 1 tothe consolidated financial statements, effective April 7, 2004, CDRVAcquisition Corporation acquired all of the outstanding stock of VWR InternationalCorporation in a business combination accounted for as a purchase. As a resultof the acquisition, the consolidated financial information for the periodsafter the acquisition are presented on a different cost basis than that for theperiods before the acquisition and, therefore, are not comparable.

As discussed in Notes 2and 15 to the consolidated financial statements, the Company adopted theprovisions of Statement of Financial Accounting Standards No. 123(R), *Share-Based Payment,*using the modified prospectivetransition method, effective January 1, 2006. Also, as discussed in Notes2 and 14, the Company adopted the provisions of Statement of FinancialAccounting Standards No. 158, *Employers’ Accounting forDefined Benefit Pension and Other Postretirement Plans,*as of December 31,2006. As discussed in Note 3, the Company adopted Financial Interpretation No. 47,*Accounting for Conditional Asset RetirementObligations,* in 2005.

/s/ KPMG LLP

Philadelphia, PennsylvaniaMarch 30, 2007

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**CDRV INVESTORS,INC.Consolidated Balance Sheets(Dollars in millions, except share data)**

| ** **                                                                                                                                                                                                             | ** ** | **December 31,** | ** ** |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                                                                                                                                             | ** ** | **2006**              | ** ** | **2005** | ** ** |
| **Assets**                                                                                                                                                                                                             | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current Assets:                                                                                                                                                                                                        |       |                  |       |   |   |
| Cash and cash equivalents                                                                                                                                                                                              |       | $                     | 139.4      |   | $ | 126.1 |   |
| Trade accounts receivable, less reserves of $9.8 and  $6.6, respectively                                                                                                                                               |       | 452.7                 |       | 407.3 |   |
| Other receivables                                                                                                                                                                                                      |       | 30.1                  |       | 31.0 |   |
| Inventories                                                                                                                                                                                                            |       | 260.6                 |       | 270.4 |   |
| Other current assets                                                                                                                                                                                                   |       | 20.5                  |       | 13.9 |   |
| Total current assets                                                                                                                                                                                                   |       | 903.3                 |       | 848.7 |   |
| Property and  equipment, net                                                                                                                                                                                           |       | 156.9                 |       | 156.8 |   |
| Investments                                                                                                                                                                                                            |       | 8.3                   |       | 7.8 |   |
| Goodwill                                                                                                                                                                                                               |       | 933.1                 |       | 910.0 |   |
| Other intangible  assets, net                                                                                                                                                                                          |       | 552.3                 |       | 552.7 |   |
| Deferred income  taxes                                                                                                                                                                                                 |       | 13.1                  |       | 11.5 |   |
| Other assets                                                                                                                                                                                                           |       | 43.1                  |       | 45.9 |   |
| Total assets                                                                                                                                                                                                           |       | $                     | 2,610.1    |   | $ | 2,533.4 |   |
| **Liabilities  and Stockholders’ Equity**                                                                                                                                                                         | ** ** | ** **            | ** ** | ** ** | ** ** |
| Current Liabilities:                                                                                                                                                                                                   |       |                  |       |   |   |
| Short-term portion of debt and current portion of  capital lease obligations                                                                                                                                           |       | $                     | 21.8       |   | $ | 45.5 |   |
| Accounts payable                                                                                                                                                                                                       |       | 380.8                 |       | 370.3 |   |
| Accrued expenses                                                                                                                                                                                                       |       | 170.8                 |       | 139.5 |   |
| Total current liabilities                                                                                                                                                                                              |       | 573.4                 |       | 555.3 |   |
| Long-term debt                                                                                                                                                                                                         |       | 1,661.0               |       | 1,342.9 |   |
| Capital lease  obligations                                                                                                                                                                                             |       | 4.8                   |       | 5.0 |   |
| Other long-term  liabilities                                                                                                                                                                                           |       | 80.5                  |       | 87.1 |   |
| Deferred income  taxes                                                                                                                                                                                                 |       | 227.0                 |       | 219.2 |   |
| Total liabilities                                                                                                                                                                                                      |       | 2,546.7               |       | 2,209.5 |   |
| Common stock  purchase subject to guarantee agreement (Note 15)                                                                                                                                                        |       | 0.5                   |       | 2.6 |   |
| Commitments and  contingences (Note 16)                                                                                                                                                                                |       |                  |       |   |   |
| Stockholders’ equity:                                                                                                                                                                                             |       |                  |       |   |   |
| Common stock, $0.01 par value; 7,000,000 shares  authorized; 5,862,892 shares issued and 5,03,412 outstanding at  December 31, 2006; 5,779,178 shares issued and 5,753,428 outstanding at  December 31, 2005 |       | 0.1                   |       | 0.1 |   |
| Additional paid-in capital                                                                                                                                                                                             |       | 14.5                  |       | 268.0 |   |
| Retained earnings                                                                                                                                                                                                      |       | 1.7                   |       | 43.6 |   |
| Unamortized value of restricted stock issued                                                                                                                                                                           |       | —                |       | (1.6 | ) |
| Accumulated other comprehensive income                                                                                                                                                                                 |       | 50.8                  |       | 12.7 |   |
| Treasury stock, at cost, 59,480 shares at  December 31, 2006 and 25,750 shares at December 31, 2005                                                                                                          |       | (4.2                  | )          | (1.5 | ) |
| Total stockholders’ equity                                                                                                                                                                                        |       | 62.9                  |       | 321.3 |   |
| Total liabilities and  stockholders’ equity                                                                                                                                                                       |       | $                     | 2,610.1    |   | $ | 2,533.4 |   |

 

See accompanying notes to consolidated financial statements.

44

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**CDRV INVESTORS,INC.Consolidated Statements of Operations(Dollars in millions)**

| ** **                                                                            | ** ** | **Successor**         | ** ** | ** **              | ** ** | **Predecessor** | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|-----------------|------------|
| ** **                                                                            | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | ** **      | ** ** | **January 1 -** | ** ** |
| ** **                                                                            | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | ** **      | ** ** | **April 6,** | ** ** |
| ** **                                                                            | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004**        | ** ** | ** ** | ** ** | **2004** | ** ** |
| Net sales                                                                             |       | $                     | 3,257.6    |                    | $          | 3,138.2         |       |   | $ | 2,212.2 |   |   |   |   |   | $ | 793.2 |   |   |
| Cost of goods  sold                                                                   |       | 2,374.3               |       | 2,334.5                 |       |            | 1,652.7    |   |   |   |   |   | 588.0 |   |   |
| Gross profit                                                                          |       | 883.3                 |       | 803.7                   |       |            | 559.5      |   |   |   |   |   | 205.2 |   |   |
| Selling, general  and administrative expenses                                         |       | 693.3                 |       | 640.0                   |       |            | 455.6      |   |   |   |   |   | 163.7 |   |   |
| Restructuring  (credits) charges (Note 4)                                             |       | (1.0                  | )          | 20.6                    |       |            | —     |   |   |   |   |   | — |   |   |
| Operating income                                                                      |       | 191.0                 |       | 143.1                   |       |            | 103.9      |   |   |   |   |   | 41.5 |   |   |
| Interest income                                                                       |       | (6.7                  | )          | (2.7                    | )          |            | (0.8       | ) |   |   |   |   | (0.2 | ) |   |
| Interest expense                                                                      |       | 117.1                 |       | 106.7                   |       |            | 52.7       |   |   |   |   |   | 5.8 |   |   |
| Other expense  (income), net                                                          |       | 1.5                   |       | (3.8                    | )          |            | (2.1       | ) |   |   |   |   | 0.1 |   |   |
| Income before income taxes and cumulative effect of  a change in accounting principle |       | 79.1                  |       | 42.9                    |       |            | 54.1       |   |   |   |   |   | 35.8 |   |   |
| Income tax  provision                                                                 |       | 32.7                  |       | 20.9                    |       |            | 23.0       |   |   |   |   |   | 15.1 |   |   |
| Income before cumulative effect of a change in  accounting principle                  |       | 46.4                  |       | 22.0                    |       |            | 31.1       |   |   |   |   |   | 20.7 |   |   |
| Cumulative effect  of a change in accounting principle, net of taxes of $0.3 (Note 3) |       | —                |       | (0.5                    | )          |            | —     |   |   |   |   |   | — |   |   |
| Net income                                                                            |       | $                     | 46.4       |                    | $          | 21.5            |       |   | $ | 31.1 |   |   |   |   |   | $ | 20.7 |   |   |

 

See accompanying notes to consolidated financial statements.

45

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**CDRV INVESTORS,INC.Consolidated Statements of Stockholders’ Equity andOther Comprehensive Income(Dollars in millions)For the Period January 1, 2004—April 6, 2004 (Predecessor)**

| ** **                                                               | ** ** | ** ** | ** ** | ** **     | ** ** | ** **   | ** ** | **Unamortized**       | ** ** | **Accumulated**        | ** ** | ** ** | ** ** |
|--------------------------------------------------------------------------|------------|------------|------------|----------------|------------|--------------|------------|-----------------------|------------|------------------------|------------|------------|------------|
| ** **                                                               | ** ** | ** ** | ** ** | **Additional** | ** ** | ** **   | ** ** | **value of**     | ** ** | **other**              | ** ** | ** ** | ** ** |
| ** **                                                               | ** ** | **Common** | ** ** | **paid-in**    | ** ** | **Retained** | ** ** | **restricted**        | ** ** | **comprehensive**      | ** ** | ** ** | ** ** |
| ** **                                                               | ** ** | **stock**  | ** ** | **capital**    | ** ** | **earnings** | ** ** | **stock issued** | ** ** | **income (loss)** | ** ** | **Total**  | ** ** |
| Balance at  January 1, 2004                                         |       |       | $          | —         |       |         |       | $                     | 224.8      |                   |       |       | $          | 65.1 |   |   |   | $ | — |   |   |   | $ | (24.5 | ) |   | $ | 265.4 |   |
| Comprehensive  income (loss):                                            |       |       |       |           |       |         |       |                  |       |                   |       |       |       |   |   |   |   |   |   |   |   |   |   |
| Net income                                                               |       |       | —     |           |       |         | —     |                  |       |                   | 20.7       |       |       |   | — |   |   |   | — |   |   | 20.7 |   |
| Foreign currency translation adjustment                                  |       |       | —     |           |       |         | —     |                  |       |                   | —     |       |       |   | — |   |   |   | (3.7 | ) |   | (3.7 | ) |
| Unrealized gain on derivatives, net of tax                               |       |       | —     |           |       |         | —     |                  |       |                   | —     |       |       |   | — |   |   |   | 0.2 |   |   | 0.2 |   |
| Total comprehensive income                                               |       |       |       |           |       |         |       |                  |       |                   |       |       |       |   |   |   |   |   |   |   |   | 17.2 |   |
| Capital contribution for interest expense on push  down debt, net of tax |       |       | —     |           |       |         | 2.5        |                  |       |                   | —     |       |       |   | — |   |   |   | — |   |   | 2.5 |   |
| Balance at April 6,  2004                                           |       |       | $          | —         |       |         |       | $                     | 227.3      |                   |       |       | $          | 85.8 |   |   |   | $ | — |   |   |   | $ | (28.0 | ) |   | $ | 285.1 |   |

 

**Forthe Period April 7, 2004—December 31, 2004 (Successor)**

| ** **                                                                         | ** ** | ** **            | ** ** | ** **  | ** ** | ** **     | ** ** | ** **     | ** ** | **Unamortized**       | ** ** | **Accumulated**  | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | ** ** |
|------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------|------------|----------------|------------|----------------|------------|-----------------------|------------|------------------|------------|--------------------------|------------|------------|------------|------------|------------|
| ** **                                                                         | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional** | ** ** | ** **     | ** ** | **value of**     | ** ** | **other**        | ** ** | **Treasury Stock,** | ** ** | ** ** | ** ** |
| ** **                                                                         | ** ** | **Common Stock** | ** ** | **paid-in** | ** ** | **Retained**   | ** ** | **restricted** | ** ** | **comprehensive**     | ** ** | **at cost** | ** ** | ** **               | ** ** |
| ** **                                                                         | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **capital**    | ** ** | **earnings**   | ** ** | **stock issued** | ** ** | **income**       | ** ** | **Shares**               | ** ** | **Amount** | ** ** | **Total**  | ** ** |
| Balance at April 7, 2004                                                      |       | —                |       |        | $          | —         |       |           |       | $                     | —     |             |       |                     | $          | —     |       |       |       | $ | — |   |   |   | $ | — |   |   |   | — |   |   |   | $ | — |   |   | $ | — |   |
| Issuance of common stock, net                                                      |       | 5,500,000             |       |        | 0.1        |           |       |           | 531.2      |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 531.3 |   |
| Issuance of common stock in connection with our stock  incentive plan (Note 15(b)) |       | 241,217               |       |        | —     |           |       |           | 20.8       |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 20.8 |   |
| Issuance of restricted common stock, net (Note 15(c))                              |       | —                |       |        | —     |           |       |           | 0.3        |                  |       |             | —     |                     |       |       | (0.3       | )          |       |   | — |   |   |   | — |   |   |   | — |   |   | — |   |
| Dividends paid                                                                     |       | —                |       |        | —     |           |       |           | (288.9     | )                     |       |             | (9.0       | )                        |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | (297.9 | ) |
| Acquisition of treasury stock                                                      |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | 700 |   |   |   | (0.1 | ) |   | (0.1 | ) |
| Comprehensive  income (loss):                                                      |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                         |       | —                |       |        | —     |           |       |           | —     |                  |       |             | 31.1       |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 31.1 |   |
| Foreign currency translation adjustment                                            |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | 54.1 |   |   |   | — |   |   |   | — |   |   | 54.1 |   |
| Unrealized loss on derivatives, net of tax                                         |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | (0.7 | ) |   |   | — |   |   |   | — |   |   | (0.7 | ) |
| Total comprehensive income                                                         |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   | 84.5 |   |
| Balance at  December 31, 2004                                                 |       | 5,741,217             |       |        | $          | 0.1            |       |           |       | $                     | 263.4      |             |       |                     | $          | 22.1       |       |       |       | $ | (0.3 | ) |   |   | $ | 53.4 |   |   |   | 700 |   |   |   | $ | (0.1 | ) |   | $ | 338.6 |   |

 

See accompanying notes to consolidated financial statements.

46

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**CDRV INVESTORS, INC.Consolidated Statements of Stockholders’ Equity andOther Comprehensive Income(Dollars in millions)For the Period January 1, 2005—December 31, 2006 (Successor)**

| ** **                                                                                      | ** ** | ** **            | ** ** | ** **  | ** ** | ** **     | ** ** | ** **     | ** ** | **Unamortized**       | ** ** | **Accumulated**  | ** ** | ** **               | ** ** | ** ** | ** ** | ** ** | ** ** |
|-------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------|------------|----------------|------------|----------------|------------|-----------------------|------------|------------------|------------|--------------------------|------------|------------|------------|------------|------------|
| ** **                                                                                      | ** ** | ** **            | ** ** | ** **  | ** ** | **Additional** | ** ** | ** **     | ** ** | **value of**     | ** ** | **other**        | ** ** | **Treasury Stock,** | ** ** | ** ** | ** ** |
| ** **                                                                                      | ** ** | **Common Stock** | ** ** | **paid-in** | ** ** | **Retained**   | ** ** | **restricted** | ** ** | **comprehensive**     | ** ** | **at cost** | ** ** | ** **               | ** ** |
| ** **                                                                                      | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **capital**    | ** ** | **earnings**   | ** ** | **stock issued** | ** ** | **income**       | ** ** | **Shares**               | ** ** | **Amount** | ** ** | **Total**  | ** ** |
| Balance at January 1, 2005                                                                 |       | 5,741,217             |       |        | $          | 0.1            |       |           |       | $                     | 263.4      |             |       |                     | $          | 22.1       |       |       |       | $ | (0.3 | ) |   |   | $ | 53.4 |   |   |   | 700 |   |   |   | $ | (0.1 | ) |   | $ | 338.6 |   |
| Issuance of common stock in connection with our stock  incentive plan (Note 15(b))         |       | 29,032                |       |        | —     |           |       |           | 1.6        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 1.6 |   |
| Issuance of restricted common stock, net (Note 15(c))                                           |       | —                |       |        | —     |           |       |           | 1.3        |                  |       |             | —     |                     |       |       | (1.3       | )          |       |   | — |   |   |   | — |   |   |   | — |   |   | — |   |
| Issuance of common stock in connection with  acquisition (Notes 5(b) and 15(c))            |       | 8,929                 |       |        | —     |           |       |           | 0.5        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.5 |   |
| Stock-based compensation                                                                        |       | —                |       |        | —     |           |       |           | 0.9        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.9 |   |
| Reduction of common stock purchase subject to  guarantee agreement                              |       | —                |       |        | —     |           |       |           | 0.3        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.3 |   |
| Acquisition of treasury stock                                                                   |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | 25,050 |   |   |   | (1.4 | ) |   | (1.4 | ) |
| Comprehensive  income (loss):                                                                   |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                      |       | —                |       |        | —     |           |       |           | —     |                  |       |             | 21.5       |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 21.5 |   |
| Minimum pension liability, net of taxes of $7.6                                                 |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | (11.9 | ) |   |   | — |   |   |   | — |   |   | (11.9 | ) |
| Foreign currency translation  adjustment                                                        |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | (29.2 | ) |   |   | — |   |   |   | — |   |   | (29.2 | ) |
| Unrealized gain on derivatives, net of tax                                                      |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | 0.4 |   |   |   | — |   |   |   | — |   |   | 0.4 |   |
| Total comprehensive (loss)                                                                      |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   | (19.2 | ) |
| Balance at December 31, 2005                                                               |       | 5,779,178             |       |        | 0.1        |           |       |           | 268.0      |                  |       |             | 43.6       |                     |       |       | (1.6       | )          |       |   | 12.7 |   |   |   | 25,750 |   |   |   | (1.5 | ) |   | 321.3 |   |
| Equity reclassification (Note 15(c))                                                            |       | —                |       |        | —     |           |       |           | (1.6       | )                     |       |             | —     |                     |       |       | 1.6        |       |       |   | — |   |   |   | — |   |   |   | — |   |   | — |   |
| Issuance of common stock in connection with our stock  incentive plan (Note 15(b))         |       | 52,287                |       |        | —     |           |       |           | 3.8        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 3.8 |   |
| Exercise of stock options                                                                       |       | 25,660                |       |        | —     |           |       |           | 1.3        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 1.3 |   |
| Stock-based compensation                                                                        |       | —                |       |        | —     |           |       |           | 3.4        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 3.4 |   |
| Tax benefit related to stock options                                                            |       | —                |       |        | —     |           |       |           | 0.1        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 0.1 |   |
| Make whole option payment recorded as a reduction to  equity, net of taxes of $4.7 (Note 15(b)) |       | —                |       |        | —     |           |       |           | (7.4       | )                     |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | (7.4 | ) |
| Reduction of common stock purchase subject to  guarantee agreement                              |       | —                |       |        | —     |           |       |           | 2.1        |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 2.1 |   |
| Cash distribution                                                                               |       | —                |       |        | —     |           |       |           | (255.2     | )                     |       |             | (88.3      | )                        |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | (343.5 | ) |
| Stock dividend                                                                                  |       | 5,767                 |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | — |   |
| Acquisition of treasury stock                                                                   |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | — |   |   |   | 33,730 |   |   |   | (2.7 | ) |   | (2.7 | ) |
| Comprehensive  income:                                                                          |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net income                                                                                      |       | —                |       |        | —     |           |       |           | —     |                  |       |             | 46.4       |                     |       |       | —     |       |       |   | — |   |   |   | — |   |   |   | — |   |   | 46.4 |   |
| Minimum pension liability, net of taxes of $4.9                                                 |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | 7.4 |   |   |   | — |   |   |   | — |   |   | 7.4 |   |
| Foreign currency translation  adjustment                                                        |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | 32.5 |   |   |   | — |   |   |   | — |   |   | 32.5 |   |
| Unrealized gain on derivatives, net of tax                                                      |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | 0.5 |   |   |   | — |   |   |   | — |   |   | 0.5 |   |
| Total comprehensive income                                                                      |       |                  |       |        |       |           |       |           |       |                  |       |             |       |                     |       |       |       |       |       |   |   |   |   |   |   |   |   |   |   |   |   | 86.8 |   |
| Impact of initially applying SFAS 158, net of taxes  of $1.5                                    |       | —                |       |        | —     |           |       |           | —     |                  |       |             | —     |                     |       |       | —     |       |       |   | (2.3 | ) |   |   | — |   |   |   | — |   |   | (2.3 | ) |
| Balance at  December 31, 2006                                                              |       | 5,862,892             |       |        | $          | 0.1            |       |           |       | $                     | 14.5       |             |       |                     | $          | 1.7        |       |       |       | $ | — |   |   |   | $ | 50.8 |   |   |   | 59,480 |   |   |   | $ | (4.2 | ) |   | $ | 62.9 |   |

 

See accompanying notes to consolidated financial statements.

47

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**CDRV INVESTORS, INC.Consolidated Statements of Cash Flows(Dollars in millions)**

| ** **                                                                                    | ** ** | **Successor**                          | ** ** | ** **              | ** ** | **Predecessor**       | ** ** |
|-----------------------------------------------------------------------------------------------|------------|----------------------------------------|------------|-------------------------|------------|-----------------------|------------|
| ** **                                                                                    | ** ** | **Year Ended  December 31,** | ** ** | **April 7 -** | ** ** | ** **            | ** ** | **January 1 -** | ** ** |
| ** **                                                                                    | ** ** | ** **                             | ** ** | ** **              | ** ** | **December 31,** | ** ** | ** ** | ** ** | **April 6,** | ** ** |
| ** **                                                                                    | ** ** | **2006**                               | ** ** | **2005**                | ** ** | **2004**              | ** ** | ** ** | ** ** | **2004** | ** ** |
| Cash flows from operating  activities:                                                        |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Net income                                                                                    |       | $                                      | 46.4       |                    | $          | 21.5                  |       |   | $ | 31.1 |   |   |   |   |   | $ | 20.7 |   |   |
| Adjustments  to reconcile net income to net cash provided by operating activities:            |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Depreciation and amortization                                                                 |       | 41.4                                   |       | 33.9                    |       |                  | 25.8       |   |   |   |   |   | 8.9 |   |   |
| Loss (gain) on sale of assets                                                                 |       | 0.6                                    |       | (0.5                    | )          |                  | —     |   |   |   |   |   | — |   |   |
| Cumulative effect of a change in accounting principle                                         |       | —                                 |       | 0.5                     |       |                  | —     |   |   |   |   |   | — |   |   |
| Non-cash interest accretion                                                                   |       | 32.6                                   |       | 29.6                    |       |                  | 1.2        |   |   |   |   |   | — |   |   |
| Non-cash equity compensation expense                                                          |       | 3.4                                    |       | 0.9                     |       |                  | —     |   |   |   |   |   | — |   |   |
| Interest on push down debt, net of tax                                                        |       | —                                 |       | —                  |       |                  | —     |   |   |   |   |   | 2.5 |   |   |
| Non-cash (credit) provision for restructuring                                                 |       | (1.0                                   | )          | 11.5                    |       |                  | —     |   |   |   |   |   | — |   |   |
| Amortization of debt issuance costs                                                           |       | 5.9                                    |       | 5.4                     |       |                  | 3.7        |   |   |   |   |   | — |   |   |
| Deferred income tax expense                                                                   |       | 5.4                                    |       | 1.7                     |       |                  | 3.0        |   |   |   |   |   | 0.9 |   |   |
| Provision for doubtful accounts                                                               |       | 6.0                                    |       | 3.2                     |       |                  | 2.5        |   |   |   |   |   | 0.6 |   |   |
| Changes  in working capital, net of effect of business acquisitions:                          |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Trade accounts receivable                                                                     |       | (27.3                                  | )          | (14.6                   | )          |                  | 4.9        |   |   |   |   |   | (26.8 | ) |   |
| Other receivables                                                                             |       | (10.3                                  | )          | (11.3                   | )          |                  | (7.0       | ) |   |   |   |   | 8.7 |   |   |
| Inventories                                                                                   |       | 20.3                                   |       | (29.0                   | )          |                  | 20.5       |   |   |   |   |   | 17.5 |   |   |
| Other assets                                                                                  |       | 0.2                                    |       | (2.0                    | )          |                  | (1.1       | ) |   |   |   |   | 1.9 |   |   |
| Accounts payable                                                                              |       | 27.9                                   |       | 32.4                    |       |                  | 0.2        |   |   |   |   |   | 61.7 |   |   |
| Accrued expenses and other long-term liabilities                                              |       | 21.7                                   |       | (13.1                   | )          |                  | 3.1        |   |   |   |   |   | 0.9 |   |   |
| Net cash provided by operating activities                                                     |       | 173.2                                  |       | 70.1                    |       |                  | 87.9       |   |   |   |   |   | 97.5 |   |   |
| Cash flows from investing  activities:                                                        |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Payment to Merck KGaA and affiliates to acquire  business, net of cash acquired of $130.8     |       | —                                 |       | —                  |       |                  | (1,539.1   | ) |   |   |   |   | — |   |   |
| Transaction costs                                                                             |       | (0.2                                   | )          | (1.5                    | )          |                  | (20.5      | ) |   |   |   |   | — |   |   |
| Acquisitions of businesses and other intangible  assets                                       |       | (5.7                                   | )          | (44.5                   | )          |                  | (2.7       | ) |   |   |   |   | — |   |   |
| Capital expenditures                                                                          |       | (23.6                                  | )          | (18.4                   | )          |                  | (13.1      | ) |   |   |   |   | (3.3 | ) |   |
| Proceeds from sales of property and equipment                                                 |       | 5.4                                    |       | 2.2                     |       |                  | 1.2        |   |   |   |   |   | 0.4 |   |   |
| Net cash used in investing activities                                                         |       | (24.1                                  | )          | (62.2                   | )          |                  | (1,574.2   | ) |   |   |   |   | (2.9 | ) |   |
| Cash flows from financing  activities:                                                        |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Proceeds from debt                                                                            |       | 354.4                                  |       | 3.2                     |       |                  | 1,466.9    |   |   |   |   |   | 13.3 |   |   |
| Repayment of debt                                                                             |       | (106.1                                 | )          | (13.9                   | )          |                  | (111.1     | ) |   |   |   |   | (6.8 | ) |   |
| Decrease in notes receivable from Merck KGaA and  affiliates                                  |       | —                                 |       | —                  |       |                  | —     |   |   |   |   |   | 4.1 |   |   |
| Net change in bank checks outstanding                                                         |       | (33.4                                  | )          | 15.0                    |       |                  | 25.0       |   |   |   |   |   | (2.1 | ) |   |
| Issuance of 100 shares of common stock, net of  expenses                                      |       | —                                 |       | —                  |       |                  | 531.3      |   |   |   |   |   | — |   |   |
| Proceeds from stock incentive plan                                                            |       | 4.8                                    |       | 1.3                     |       |                  | 23.8       |   |   |   |   |   | — |   |   |
| Make whole option payment recorded as a reduction to  additional paid-in capital (Note 15(b)) |       | (7.4                                   | )          | —                  |       |                  | —     |   |   |   |   |   | — |   |   |
| Cash paid for debt issuance costs                                                             |       | (5.2                                   | )          | (0.8                    | )          |                  | (38.8      | ) |   |   |   |   | — |   |   |
| Distributions                                                                                 |       | (343.5                                 | )          | —                  |       |                  | (297.9     | ) |   |   |   |   | — |   |   |
| Acquisition of treasury stock                                                                 |       | (2.7                                   | )          | (1.4                    | )          |                  | (0.1       | ) |   |   |   |   | — |   |   |
| Net cash (used in) provided by financing activities                                           |       | (139.1                                 | )          | 3.4                     |       |                  | 1,599.1    |   |   |   |   |   | 8.5 |   |   |
| Effect of exchange rate changes on cash                                                       |       | 3.3                                    |       | (2.1                    | )          |                  | 4.1        |   |   |   |   |   | (0.6 | ) |   |
| Net increase in cash and  cash equivalents                                                    |       | 13.3                                   |       | 9.2                     |       |                  | 116.9      |   |   |   |   |   | 102.5 |   |   |
| Cash and cash equivalents beginning of period                                                 |       | 126.1                                  |       | 116.9                   |       |                  | —     |   |   |   |   |   | 28.3 |   |   |
| Cash and cash equivalents end of period                                                       |       | $                                      | 139.4      |                    | $          | 126.1                 |       |   | $ | 116.9 |   |   |   |   |   | $ | 130.8 |   |   |
| Supplemental disclosures  of cash flow information:                                           |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Cash  paid during the period for:                                                             |       |                                   |       |                    |       |                  |       |   |   |   |   |   |   |   |   |
| Interest                                                                                      |       | $                                      | 77.4       |                    | $          | 70.4                  |       |   | $ | 33.9 |   |   |   |   |   | $ | 1.3 |   |   |
| Income taxes paid,  net                                                                       |       | $                                      | 13.4       |                    | $          | 12.6                  |       |   | $ | 29.1 |   |   |   |   |   | $ | 4.2 |   |   |

 

See accompanying notes to consolidated financial statements.

48

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

**(1)   Background andNature of Operations**

CDRV Investors, Inc. (“CDRV”, the “Company,” “us”,“we” or “our”) was incorporated in Delaware on February 9, 2004 byClayton, Dubilier & Rice Fund VI Limited Partnership. CDRV through itsindirect wholly-owned subsidiary, VWR International, Inc. (“VWR”),distributes scientific supplies, chemicals, and equipment and provide services,primarily in North America and Europe. The business is diversified acrossproducts, geographic regions and customer segments. Our principal customers aremajor pharmaceutical, biotechnology, chemical, technology, food processing andconsumer product companies, universities and research institutes, governmentalagencies, environmental organizations, and primary and secondary schools.

The Company’s North American business was formerly theVWR Scientific Products Corporation (“VWRSP”). In 1995, Merck KGaA, VWRInternational Corporation’s (VWR’s predecessor) ultimate parent company until April 7,2004, headquartered in Darmstadt, Germany, agreed to acquire approximately49.9% of the then-outstanding shares of VWRSP. In 1999, following a tenderoffer for the remaining shares, VWRSP became a wholly-owned subsidiary of MerckKGaA (collectively, the “VWRSP Acquisition”) (See Note 5(c)).

As more fully discussed in Note 5(a), on April 7,2004, Merck KGaA sold all of the outstanding shares of capital stock of VWRInternational Corporation to CDRV Acquisition Corporation (“CDRVA”), awholly-owned subsidiary of CDRV Holdings, Inc., a wholly-owned subsidiaryof the Company, for a purchase price of approximately $1,684.2, consisting ofapproximately $1,669.9 in cash and approximately $14.3 of assumed debt (the “Acquisition”).In addition, direct acquisition costs of approximately $77.5 were incurred.CDRVA financed the Acquisition through a $550.0 equity investment,approximately $1,110.5 in various debt instruments, acquired cash of $70.1 andaccrued expenses of $16.8.

In connection with the Acquisition, CDRVA issued$200.0 of 67¤8%Unsecured Senior Notes due 2012 and $320.0 of 8% Unsecured Senior SubordinatedNotes due 2014  (“VWR Notes”) andobtained financing under a new senior secured credit facility (the “SeniorSecured Credit Facility”). Following the completion of the Acquisition, there were a series ofinternal reorganizations, pursuant to which, among other things, (i) VWRInternational Corporation merged with and into VWR International, Inc.,with VWR International, Inc. surviving, and (ii) thereafter, CDRVAmerged with and into VWR International, Inc., with VWR International, Inc.surviving and assuming the obligations of CDRVA.

OnDecember 16, 2004, we issued $481.0 of 95¤8% seniordiscount notes due 2015 (“Senior Discount Notes”). Prior to this issuance, wehad not had any significant operating, investing or financing activities otherthan being the holding company of CDRV Holdings, Inc., which in turn, hadnot had any significant operating, investing or financing activities other thanbeing the holding company of VWR and the indirect holder of approximately 6%equity ownership in VWR International Immobilien GmbH that VWR did not hold.The net proceeds from the issuance of the Senior Discount Notes ofapproximately $297.9 were used to pay a cash dividend to the holders of ourcommon stock.

On December 14, 2006, we issued $350.0 aggregateprincipal amount of senior floating rate notes due 2011 (“Senior Floating RateNotes”). The net proceeds from this issuance were used to pay a distribution tothe holders of our common stock. In connection with various transactionsinvolving the issuance of the Senior Floating Rate Notes, we formed a newwholly owned subsidiary, CDRV Investment Holdings 

49

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Corporation (“HoldingsCorp’’), which assumed the obligations under the Senior Discount Notes in December 2006.We guarantee the Senior Discount Notes on an unsecured senior subordinatedbasis.

The term “successor” refers to CDRV following theAcquisition. The term “predecessor” refers to VWR International Corporationprior to the change in control on April 7, 2004. CDRVA had no operationsprior to the Acquisition.

The financial statements, for the period presentedprior to the Acquisition, do not include allocations of Merck KGaA generalcorporate expenses or charges for financial reporting, tax, and treasuryservices, as such costs were not charged to VWR International Corporation.Management does not believe that charges for such services would have beenmaterial. See Note 17 for a further discussion of transactions with Merck KGaA.

The financial statements,for the period presented prior to the Acquisition, reflect the push down of thepurchase price paid by Merck KGaA for VWR International Corporation to the VWRInternational Corporation financial statements that resulted in the recognitionof push down debt due Merck KGaA or a contribution to stockholders’ equity forcash consideration. For the period prior to the Acquisition, interest expenseof $4.1 was recorded on this push down debt based upon Merck KGaA’sintercompany interest rates, which are not necessarily indicative of rates VWRInternational Corporation would have obtained if it were not an ultimatesubsidiary of Merck KGaA. Interest expense, including tax effects on push downdebt, has been included in the predecessor statement of operations, andpresented as a non-cash item in the predecessor statement of cash flows and acapital contribution in the predecessor statement of stockholders’ equity andother comprehensive income, as this interest was not required to be paid toMerck KGaA.

**(2)   Summary ofSignificant Accounting Policies**

The accounting policies asdescribed herein are applicable to both the predecessor and successor financialstatements unless specifically noted therein.

***(a) Principles of Consolidation***

The accompanyingconsolidated financial statements include the accounts of CDRV and itssubsidiaries after elimination of all intercompany balances and transactions.

***(b) Cash and Cash Equivalents***

Cash and cash equivalentsare comprised of highly liquid investments with insignificant interest raterisk and having original maturities of three months or less. The amount ofrestricted cash was $0.7 and $1.2 at December 31, 2006 and 2005,respectively.

***(c) Trade Accounts Receivables Reserve***

The carrying amount ofaccounts receivable reflects a reserve representing our estimate of the amountsthat will not be collected and for estimated sales returns and allowances. Inaddition to reviewing delinquent accounts receivable, we consider many factorsin estimating our reserve, including historical 

50

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

data,experience, customer types, credit worthiness, and economic trends. From timeto time, we may adjust our assumptions for anticipated changes in any of theseor other factors expected to affect collectibility.

***(d) Inventories***

Inventories are valued atthe lower of cost or market, cost being determined principally by the last-in,first-out (“LIFO”) method for our U.S. subsidiaries and the average cost or thefirst-in, first-out (“FIFO”) method for all other subsidiaries. The Companyperiodically reviews quantities of inventories on hand and compares theseamounts to the expected use of each product or product line. The Companyrecords a charge to cost of sales for the amount required to reduce thecarrying value of inventory to net realizable value. Costs associated with theprocurement and warehousing of inventories, such as inbound freight charges,purchasing and receiving costs, and internal transfer costs, are included inthe cost of sales line item within the statement of operations.

***(e) Property and Equipment***

Property and equipment arerecorded at cost. Property and equipment held under capital leases are statedat the present value of minimum lease payments. Depreciation is computed usingthe straight-line method as follows: buildings and improvements, 10 to 40years; equipment and software, 3 to 15 years. Property and equipment held undercapital leases and leasehold improvements are amortized over the shorter of theremaining life of the lease or the useful lives of the improvements. Costs for repairsand maintenance that do not significantly increase the value or estimated livesof property and equipment are treated as expense as such expenses are incurred.

***(f) Goodwill and Intangible Assets***

Goodwill represents the excess of costs over fair valueof assets of businesses acquired. In accordance with the provisions ofStatement of Financial Accounting Standards (“SFAS”) No. 142, *Goodwill and Other Intangible Assets*(“SFAS142”), goodwill and intangible assets acquired in a purchase business combinationand determined to have an indefinite useful life are not amortized, but insteadare tested for impairment. We have determined that our trademarks and tradenames have indefinite lives because they do not have legal, regulatory,contractual, competitive, or economic limitations and are expected tocontribute to the generation of cash flows indefinitely. SFAS 142 also requiresthat intangible assets with finite useful lives be amortized over theirrespective estimated useful lives to their estimated residual values, andreviewed for impairment in accordance with SFAS No. 144, *Accounting for Impairment or Disposal of Long-LivedAssets*.

SFAS 142 requires that goodwill be tested annually orbetween annual tests if events occur or circumstances change that would morelikely than not reduce the fair value of a reporting unit below its carryingamounts. We have elected to perform its annual test for indications of goodwillimpairment in the fourth quarter of each year. The test was performed and noimpairment was identified.

Goodwill included in thefinancial statements primarily represents the excess of acquisition costs overthe fair value of net assets acquired in connection with the Acquisition asdiscussed in Note 5(a).

51

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(g) Impairment of Long-Lived Assets***

We evaluate therecoverability of long-lived assets used in operations when events orcircumstances indicate a possible inability to recover carrying amounts. Suchevaluations are based on undiscounted cash flow and profitability projections.An impairment charge is recorded for the difference between the fair value andcarrying value of the asset. No impairment losses were recorded in 2006, 2005or 2004.

***(h) Advertising***

We expense advertising costs as incurred, except forcertain direct-response advertising, which is capitalized and amortized overits expected period of future benefit, generally from 12 to 48 months.Capitalized direct-response advertising, which is included in other currentassets and other assets, consists of catalog production and mailing costs thatare expensed over the estimated useful life from the date catalogs are mailed.Capitalized direct-response advertising as of December 31, 2006 and 2005were $8.5 and $8.8, respectively. The table below shows total advertisingexpense for each of the reporting periods.

| ** **           | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|----------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **           | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **           | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **           | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Advertising  expense |       | $                     | 21.5       |                    | $          | 20.7 |   |   | $ | 16.4 |   |   |   | $ | 5.4 |   |   |
|                      |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

***(i) Revenue Recognition***

We record product revenue on a gross basis whenpersuasive evidence of an arrangement exists, the price is fixed ordeterminable, title and risk of loss have been transferred to the customer andcollectibility of the resulting receivable is reasonably assured. Title andrisk of loss is transferred at the time of shipment or upon delivery tocustomers, depending upon the terms of the arrangement with the customer.Products are delivered without significant post-sale obligations to thecustomer. Provisions for discounts, rebates to customers, sales returns, andother adjustments are provided for as a reduction of sales in the period therelated sales are recorded.

Our service revenues,which represent a small part of our business, are primarily comprised oftechnical services, on-site storeroom services, warehousing and furnituredesign, supply and installation. Revenues related to technical services,on-site storeroom services and warehousing are recognized as the services areperformed. Certain of our arrangements to provide on-site storeroom servicescontain multiple elements. We recognize revenue separately for each elementbased on the fair value of the element provided. The majority of contractsassociated with our furniture design, supply and installation are recorded underthe percentage-of-completion method of accounting. Profits recognized oncontracts in process are based upon estimated contract revenue and cost tocompletion. Cost to completion is measured based on actual costs incurred todate compared to total estimated cost.

***(j) Shippingand Handling***

We record shipping and handling charges billed tocustomers in net sales and records shipping and handling costs in cost of goodssold for all periods presented.

52

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(k) IncomeTaxes***

Income taxes are accounted for under SFAS No. 109,*Accounting for Income Taxes*,which requires the asset and liability method under which deferred income taxesare recognized for the expected net tax effects of temporary differencesbetween the carrying amounts of assets and liabilities for financial reportingand income tax purposes and net operating loss and credit carryforwards.Deferred tax assets and liabilities are measured using the enacted tax ratesexpected to apply to taxable income in the years in which those temporarydifferences are expected to be recovered or settled. The effect on deferred taxassets and liabilities of a change in tax rates is recognized in income in theperiod that includes the enactment date. We record a valuation allowance toreduce deferred tax assets to the amount that is more likely than not to berealized.

***(l) Insurance***

Certain insurable risks such as commercial generalliability; property damage and business interruption; and workers’ compensationare insured by third parties. However, we self-insure certain components ofthese risk exposures at various deductible levels and subject to certainexclusions. Accruals for claims under our self-insurance programs are recordedon a claims-incurred basis.

***(m) Pensionsand Other Postretirement Plans***

We have defined benefit plans covering certain of ouremployees. The benefits include pension, salary continuance, severance, lifeinsurance, and health care. Benefits are accrued over the employee’s serviceperiod. As noted under Notes 2 (u) and 14 (a), during September 2006,the Financial Accounting Standards Board (“FASB”) issued SFAS No. 158, *Employers’ Accounting for Defined Benefit Pension andOther Postretirement Plans - an amendment of SFAS No 87, 88, 106, and 132(R) *(“SFAS158”). This Statement requires balance sheet recognition of the funded statusfor all pension and postretirement benefit plans.

***(n) Concentrationsof Credit Risk***

Trade receivables reflect a diverse customer base andour wide geographic dispersion of businesses. As a result, no significantconcentrations of credit risk exist.

***(o) Stock-BasedCompensation***

We adopted SFAS No. 123 Revised, *Share-Based Payment* (“SFAS 123R”), effective January 1,2006, which requires companies to recognize in the income statement the grantdate value of stock options and other forms of equity-based compensation issuedto employees. The Company previously accounted for stock options granted to ouremployees using the intrinsic value method of Accounting Principles BoardOpinion No. 25, *Accounting for StockIssued to Employees* (“APB 25”). Under APB 25, the Company did notrecognize compensation expense for options granted to our employees becausesuch options had an exercise price equal to their fair market value on the dateof grant. See Note 15 for further discussion of stock-based compensation.

53

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(p) Foreign Currency Translation***

Assetsand liabilities of our foreign subsidiaries, where the functional currency isthe local currency, are translated into U.S. dollars using period-endexchange rates, and income and expenses are translated using average exchangerates. Resulting translation adjustments are reported as a separate componentof stockholders’ equity. Foreign currency translation adjustments for exchangegains and losses on transactions are included in other expense (income), net,and were as follows:

| ** **

** **        | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                    | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                    | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                    | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Exchange (losses)  gains, net |       | $                     | (2.0       | )                       | $          | 2.8 |   |   | $ | 1.1 |   |   |   | $ | 0.4 |   |   |
|                               |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

There have been nosignificant fluctuations in foreign currency exchange rates since December 31,2006.

***(q) Financial Instruments and Derivatives***

The Company accounts for derivative financialinstruments in accordance with SFAS No. 133, *Accounting for Derivative Instruments and Hedging Activities,*as amended. All derivatives, whether designated for hedging relationships ornot, are recorded on the balance sheet at fair value. If the derivative isdesignated as a fair value hedge, the changes in the fair value of thederivative and of the hedged item attributable to the hedged risk arerecognized in the results of operations. If the derivative is designated as acash flow hedge, the effective portions of changes in the fair value of thederivative are recorded in accumulated other comprehensive income and arerecognized in the results of operations when the hedged item affects earnings.Ineffective portions of changes in the fair value cash flow hedges arerecognized in the results of operations. For derivative instruments notdesignated as hedging instruments, changes in fair value are recognized in theresults of operations in the current period.

We enter into foreign currency forward contractsprimarily to hedge exposures to fluctuations in foreign currency rates thatarise from purchasing of products that are denominated in foreign currencies.Gains and losses on the foreign currency forward contracts generally offsetgains and losses on certain expected commitments. To the extent these foreigncurrency forward contracts are considered effective hedges, gains and losses onthese positions are deferred and included in the basis of the transaction whenit is completed. Cash flows from foreign currency forward contracts accountedfor as hedges are classified in the statement of cash flows in the samecategory as the item being hedged or on a basis consistent with the nature ofthe instrument.

Beginning in July of2004, the Company used an interest rate cap agreement to manage its exposure tointerest rate risk. This interest rate cap was designated as a cash flow hedgeof the Company’s variable rate debt. This agreement was for two years and wasnot renewed upon its expiration in July of 2006. Amounts accumulated inother comprehensive income were reclassified into earnings as interest wasaccrued on the hedge transactions. The amounts accumulated in othercomprehensive income fluctuated based on changes in the fair value of theCompany’s derivatives at each reporting period.

54

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(r) Investments***

We account for our 24%investment in KMF Laborchemie Handels GmbH (“KMF’’), an independentdistribution company, using the equity method of accounting.

***(s) Other Comprehensive Income***

Components of other comprehensive income arecumulative foreign currency translation adjustments, pension and otherpostretirement benefit liability adjustments, and unrealized gain (loss) onderivatives. We report other comprehensive income in our consolidatedstatements of stockholders’ equity and other comprehensive income.

Accumulatedother comprehensive income net of tax, consist of:

| ** **                                                                                           | ** ** | **December 31,** | ** ** |
|------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                                           | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Foreign currency  translation adjustments                                                            |       | $                     | 57.4       |   | $ | 24.9 |   |
| Unrealized gain  (loss) on derivatives, net of taxes of $(0.1) and $0.2, respectively                |       | 0.2                   |       | (0.3 | ) |
| Pension and other  postretirement liability adjustments net of taxes of $4.2 and $7.6,  respectively |       | (6.8                  | )          | (11.9 | ) |
|                                                                                                 |       | $                     | 50.8       |   | $ | 12.7 |   |

 

***(t) Use of Estimates***

The preparation offinancial statements in conformity with accounting principles generallyaccepted in the United States of America requires management to make estimatesand assumptions that affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of revenues and expenses during thereporting period. While actual results could differ from those estimates,management believes that the estimates are reasonable.

***(u) New Accounting Standards***

The following accounting standards were adopted during2006. The impact, if any, of these accounting standards is included in ourfinancial statements.

We adopted SFAS 123R, effective January 1, 2006,which requires companies to recognize in the income statement, the grant datevalue of stock options and other forms of equity-based compensation issued toemployees. The Company previously accounted for stock options granted to ouremployees using the intrinsic value method of APB 25. See Note 15 for furtherdiscussion of stock-based compensation.

During September 2006, the FASB issued SFAS 158,which requires balance sheet recognition of the funded status for all pensionand postretirement benefit plans. The Company adopted the provisions of SFAS158 as of December 31, 2006. See Note 14 for further discussion on theimpact of SFAS 158.

During September 2006, the Securities andExchange Commission issued Staff Accounting Bulletin No. 108, *Considering the Effects of Prior Year Misstatementswhen Quantifying Misstatements in Current Year*

55

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

*FinancialStatements* (“SAB 108”). SAB 108 was issued in order toeliminate the diversity in practice surrounding how registrants quantifyfinancial statement misstatements. SAB 108 requires that registrants quantifythe impact on the current year’s financial statements of correcting allmisstatements, including the carryover and reversing effects of prior years’misstatements, as well as the effects of errors arising in the current year.SAB 108 is effective for fiscal years ending after November 15, 2006. Theimplementation of SAB 108 did not have a material effect on our financialposition or results of operations.

The following accounting standards will be adoptedprospectively.

During July 2006, the FASB issued Interpretation No. 48,*Accounting for Uncertainty in Income Taxes*(“FIN 48”). This Interpretation clarifies the accounting for uncertainty inincome taxes recognized in accordance with SFAS No. 109, *Accounting for Income Taxes.*FIN 48provides guidance on the financial statement recognition and measurement of atax position taken or expected to be taken in a tax return, derecognition,classification, interest and penalties, accounting in interim periods,disclosures, and transition. FIN 48 is effective for fiscal years beginningafter December 15, 2006. Based on our current assessment, we do not expectthat the adoption of FIN 48 will be material.

During September 2006,the FASB issued SFAS No. 157, *FairValue Measurements* (“SFAS 157”). This Statement defines fair value,establishes a framework for measuring fair value and expands disclosures aboutfair value measurements required under other accounting pronouncements, butdoes not change existing guidance as to whether or not an instrument is carriedat fair value. SFAS 157 is effective for fiscal years beginning after November 15,2007. We are currently evaluating the impact this Statement will have on ourconsolidated financial statements.

***(v) Reclassifications***

Certain amounts from priorperiods have been reclassified to conform to the current presentation.

**(3)   Accounting forAsset Retirement Obligations**

SFAS No. 143, *Accountingfor Asset Retirement Obligations* (“SFAS 143”) addresses financialaccounting and reporting for obligations associated with the retirement oftangible long-lived assets and the associated asset retirement costs. SFAS 143requires recognition of a liability at fair value and an increase to thecarrying value of the related asset for any retirement obligation. This amountis depreciated over the life of the asset. The liability is adjusted to reflectthe passage of time and changes in the estimated future cash flows. SFAS 143was effective for the Company as of January 1, 2003.

In March 2005,the FASB issued Interpretation No. 47, *Accountingfor Conditional Asset Retirement Obligations* (“FIN 47”). FIN 47clarifies that the term conditional asset retirement obligation, as used inSFAS 143, refers to a legal obligation to perform an asset retirement activityin which the timing and/or method of settlement are conditional on a futureevent that may or may not be within the control of the Company. FIN 47 requiresthat a liability for the fair value of a conditional asset retirementobligation be recognized if the fair value of the liability can be reasonablyestimated.

Weadopted FIN 47 effective December 31, 2005. Our conditional assetretirement obligations primarily relate to restoration costs for leasedfacilities including the removal of certain leasehold 

56

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

improvements. As a result of the adoption ofFIN 47, we recorded the following amounts in our financial statements asof and for the year ended December 31, 2005:

| Consolidated Statement  of Operations:                                                       |   |   |   |
|----------------------------------------------------------------------------------------------|--------|--------|--------|
| Charge for cumulative effect of a change in  accounting principle, net of taxes of $0.3 |   | $      | 0.5    |   |
| Consolidated  Balance Sheet:                                                                 |   |   |   |
| Property and equipment, net of accumulated  depreciation of $0.5                             |   | 1.5    |   |
| Deferred income tax asset                                                                    |   | 0.3    |   |
| Long-term  liabilities for asset retirement obligations                                      |   | 2.3    |   |
|                                                                                              |        |        |        |  |

 

The cumulative effect of the adoption of FIN 47 of$0.5 reflects charges since the Acquisition. Asset retirement obligations wereadjusted to reflect the cumulative accretion of all related liabilities to December 31,2005. Had we adopted FIN 47 at the beginning of 2004, the pro-formaconsolidated statements of operations would not have been materially differentfrom the amounts reported.

Effective January 1,2006, the liabilities for asset retirement obligations are adjusted on anongoing basis due to the passage of time, new laws and regulations andrevisions to either the timing or amount of the original estimates. Theseliabilities are accreted to their full estimated settlement amounts through theestimated ultimate settlement dates of the underlying obligations. Thisaccretion charge is reflected as a component of selling, general andadministrative expense in our consolidated statement of operations. Net assetretirement costs are depreciated over the remaining lease terms or lives of therelated assets. This charge is recorded as depreciation expense in ourconsolidated statement of operations. Costs related to FIN 47 were not material for 2006.

**(4)   Restructuring**

***(a) Restructuring as a Result of the Acquisition***

Subsequent to the Acquisition, we completedrestructuring activities to reduce operating costs and improve the operatingand administrative capabilities of the Company. The initial focus was on theCompany’s European operations and organizational structure and, to a lesserextent, the operations in North America. In connection with this initial focus,we recorded restructuring accruals of $29.7 in 2004. These charges primarilyrelated to reductions in headcount in Europe due to the reorganization of theCompany’s European sales and marketing functions.

In early 2005, weimplemented various restructuring plans that were formulated in 2004 and werein the planning and evaluation stages. Accordingly, we recorded additionalrestructuring accruals of approximately $24.5 in the first half of 2005. Thesecharges primarily reflect severance and other exit costs including estimatesfor environmental remediation associated with cessation of manufacturing operationsat a plant in France and severance costs associated with the consolidation ofcertain sales and marketing personnel in our German and UK operations.

These charges have beenrecorded as adjustments to acquisition costs (increases to goodwill) pursuantto the provisions of Emerging Issues Task Force Issue No. 95-3, *Recognition of Liabilities in Connection with aPurchase Business Combination* (“EITF 95-3”).

57

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

The charge forenvironmental remediation in France was initially estimated at $6.4 based on a preliminarystudy conducted by an environmental engineering firm. In 2005, we updated theseestimates in coordination with the environmental engineering firm anddetermined that our estimate for remediation costs should have been $3.9.Accordingly, we reduced the reserve and goodwill by $2.5 at December 31,2005. In addition, we also reduced our severance accruals, primarily in Franceand the UK, by $1.7 with a corresponding reduction to goodwill, at December 31,2005.

Thefollowing table sets forth the activity associated with the Company’sliabilities for restructuring as a result of the Acquisition.

| ** **                            | ** ** | **Severance**   | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** |
|---------------------------------------|------------|-----------------|------------|----------------|------------|------------|------------|------------|------------|
| ** **                            | ** ** | **and**         | ** ** | ** **     | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                            | ** ** | **termination** | ** ** | **Facilities** | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **                            | ** ** | **benefits**    | ** ** | **related**    | ** ** | **Other**  | ** ** | **Total**  | ** ** |
| Balance as of  April 7, 2004     |       |            | $          | —         |       |       |       | $          | —     |   |   | $ | — |   | $ | — |   |
| Accruals charged to goodwill          |       |            | 28.2       |           |       |       | 0.6        |       |       | 0.9 |   | 29.7 |   |
| Cash payments/other                   |       |            | (7.9       | )              |       |       | (0.1       | )          |       | (0.6 | ) | (8.6 | ) |
| Currency translation changes          |       |            | 0.7        |           |       |       | —     |       |       | — |   | 0.7 |   |
| Balance as of  December 31, 2004 |       |            | 21.0       |           |       |       | 0.5        |       |       | 0.3 |   | 21.8 |   |
| Accruals charged to goodwill          |       |            | 13.4       |           |       |       | 10.9       |       |       | 0.2 |   | 24.5 |   |
| Cash payments/other                   |       |            | (24.7      | )              |       |       | (0.6       | )          |       | (0.5 | ) | (25.8 | ) |
| Revisions to estimates                |       |            | —     |           |       |       | (4.2       | )          |       | — |   | (4.2 | ) |
| Currency translation changes          |       |            | (2.1       | )              |       |       | (1.0       | )          |       | — |   | (3.1 | ) |
| Balance as of  December 31, 2005 |       |            | 7.6        |           |       |       | 5.6        |       |       | — |   | 13.2 |   |
| Cash payments/other                   |       |            | (4.2       | )              |       |       | (1.4       | )          |       | — |   | (5.6 | ) |
| Currency translation changes          |       |            | 0.2        |           |       |       | 0.5        |       |       | — |   | 0.7 |   |
| Balance as of  December 31, 2006 |       |            | $          | 3.6            |       |       |       | $          | 4.7        |   |   | $ | — |   | $ | 8.3 |   |

 

***(b) Other restructuring activities***

In addition, we initiated several cost reduction programsin response to relatively static market conditions and implemented reductionsin force and other cost containment measures during 2005. In connection withthese actions, we recorded accruals and charges to operations related toseverance and facility exit costs of $20.6 and incurred approximately $2.1 forduplicate expenditures incurred in our UK operations related to the transitionand consolidation of certain administrative functions for the year ended December 31,2005. These duplicate expenditures are included in selling, general andadministrative expenses in the statement of operations for the year ended December 31,2005.

For the year ended December 31, 2006, we reversed$1.0 of excess accruals and credited operations primarily as a result of there-deployment of certain personnel originally included in the 2005 programs.

58

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Thefollowing table sets forth the activity associated with the Company’sliabilities for these cost reduction programs.

| ** **                                       | ** ** | **Severance**   | ** ** | ** **     | ** ** | ** ** | ** ** |
|--------------------------------------------------|------------|-----------------|------------|----------------|------------|------------|------------|
| ** **                                       | ** ** | **and**         | ** ** | ** **     | ** ** | ** ** | ** ** |
| ** **                                       | ** ** | **termination** | ** ** | **Facilities** | ** ** | ** ** | ** ** |
| ** **                                       | ** ** | **benefits**    | ** ** | **related**    | ** ** | **Total**  | ** ** |
| Balance as of  January 1, 2005              |       |            | $          | —         |       |       |       | $ | — |   |   | $ | — |   |
| Accruals charged to earnings                     |       |            |       |           |       |       |       |   |   |   |   |
| North American Lab                               |       |            | 5.7        |           |       |       | 0.1        |   |   | 5.8 |   |
| European Lab                                     |       |            | 11.2       |           |       |       | 2.6        |   |   | 13.8 |   |
| Science Education                                |       |            | 1.0        |           |       |       | —     |   |   | 1.0 |   |
| Cash payments/other                              |       |            | (8.1       | )              |       |       | (2.4       | ) |   | (10.5 | ) |
| Balance as of  December 31, 2005            |       |            | 9.8        |           |       |       | 0.3        |   |   | 10.1 |   |
| Reversal of excess accruals credited to earnings |       |            |       |           |       |       |       |   |   |   |   |
| North American Lab                               |       |            | (1.0       | )              |       |       | —     |   |   | (1.0 | ) |
| Cash payments/other                              |       |            | (7.3       | )              |       |       | (0.3       | ) |   | (7.6 | ) |
| Currency translation changes                     |       |            | 0.1        |           |       |       | —     |   |   | 0.1 |   |
| Balance as of  December 31, 2006            |       |            | $          | 1.6            |       |       |       | $ | — |   |   | $ | 1.6 |   |

At December 31, 2006, $4.1 of our aggregaterestructuring liabilities are included in accrued expenses and $5.8 areincluded in other long-term liabilities. At December 31, 2005, $16.6 ofour aggregate restructuring liabilities are included in accrued expenses and$6.7 are included in other long-term liabilities.

**(5)   BusinessCombinations and Acquisitions**

***(a) Acquisition of VWR International Corporationby CDRVA***

On February 15, 2004, Merck KGaA and CDRVAentered into a Stock Purchase Agreement, which was consummated on April 7,2004. The Acquisition was accounted for under the purchase method of accountingin accordance with SFAS No. 141, *Business Combinations.*Underpurchase accounting, tangible and identifiable intangible assets acquired andliabilities assumed have been recorded at their respective fair values based onthird party valuations. The purchase accounting adjustments made in connectionwith the Acquisition were finalized during 2005.

Theexcess investment made by CDRVA over the estimates of the fair market value ofthe identifiable assets and liabilities of VWR as of April 7, 2004 wasapproximately $859.6 and is summarized below.

| Purchase price                |   | $      | 1,669.9 |   |
|-------------------------------|--------|--------|---------|--------|
| Transaction costs             |   | 20.5   |    |
| Net tangible  assets acquired |   | (268.8 | )       |
| Intangible assets  acquired   |   | (562.0 | )       |
| Goodwill                      |   | $      | 859.6   |   |

 

59

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Thefollowing unaudited pro-forma financial information presents a summary ofconsolidated results of operations of the Company for the year ended December 31,2004 presented as if the Acquisition and the issuance of the Senior DiscountNotes had occurred as of January 1, 2004:

| Net sales                   |   | $    | 3,005.4 |   |
|-----------------------------|--------|------|---------|--------|
| Income before  income taxes |   | 47.2 |    |
| Net income                  |   | 24.7 |    |

 

These unaudited pro-formaresults have been prepared for comparative purposes only and primarily includeadjustments for a consulting advisory fee, interest expense, depreciation,amortization and income taxes. These results do not purport to be indicative ofthe results of operations which actually would have resulted had theAcquisition occurred at the beginning of 2004, or of the future results of operationsof the successor Company.

***(b) Successor’s Acquisitions***

On October 2, 2006, the Company acquired SinoChemical Company (Pte.) Limited (“Sino”) for initial cash consideration ofapproximately $4.2. Sino is located in Singapore and distributes laboratorychemicals, equipment and consumables. The results of Sino have been included inthe North American Lab segment from the date of acquisition. Had thisacquisition occurred at the beginning of 2005, the pro-forma consolidatedstatements of operations would not have been materially different from theamounts reported.

On July 1, 2005, the Company acquired TechnicalService Lab B.V. (“TSL”) for cash consideration of approximately $3.1. TSLperforms technical services on laboratory equipment in the Netherlands,Germany, Belgium and France. The results of TSL have been included in theEuropean Lab segment from the date of acquisition.

On April 1, 2005, the Company acquired AGBScientific Ltd. (“AGB”) for initial cash consideration of approximately $23.8.During 2006, additional consideration of $0.9 was recorded related to the AGBacquisition. AGB distributes scientific supplies and is headquartered inDublin, Ireland. The results of AGB have been included in the European Labsegment from the date of acquisition.

On April 1, 2005, the Company acquired AdvancedInstruments Sales & Services, Inc. (“AI”) for cash considerationof approximately $16.8 and common stock of approximately $0.5. AI performsservices and distributes scientific supplies in Puerto Rico and isheadquartered in San Juan, Puerto Rico. The results of AI have been included inthe North American Lab segment from the date of acquisition.

60

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Theexcess investment made by the Company in 2005 over the estimates of the fairmarket value of the identifiable assets and liabilities for the threeacquisitions discussed above and one other minor acquisition was $23.3 and issummarized below.

| Purchase price,  including $0.5 of common stock |   | $     | 45.0   |   |
|-------------------------------------------------|--------|-------|--------|--------|
| Transaction costs                               |   | 1.5   |   |
| Net tangible  assets acquired                   |   | (9.3  | )      |
| Intangible assets  acquired                     |   | (13.9 | )      |
| Goodwill                                        |   | $     | 23.3   |   |

 

Had these acquisitions occurred at the beginning of2004, the pro-forma consolidated statements of operations would not have beenmaterially different from the amounts reported.

On June 1, 2004, our Science Education segmentacquired certain assets of a business that focuses on providing math kits andsupplies primarily to the publisher textbook market for approximately $2.7.

Cash consideration forthese acquisitions was funded from cash and cash equivalents on hand.

***(c) Predecessor’s Acquisition of VWRSP in 1995and 1999***

The Company’s North American business was formerlyVWRSP. In 1995, Merck KGaA, agreed to acquire approximately 49.9% of the thenoutstanding shares of VWRSP. In July 1999, affiliates of Merck KGaAacquired through a public tender offer the remaining 50.1% of the issued andoutstanding common shares of VWRSP for $584.0 to increase its beneficialownership to 100%. The total cumulative purchase price paid by Merck KGaA forthe 100% ownership was $792.0.

The 1999 acquisition has been accounted for under thepurchase method in the financial statements following the push down basis ofaccounting through April 7, 2004. After recording the purchase price inthe VWR statements, VWR had recorded $778.8 of goodwill, $17.5 of intangibleassets, and $773.3 of push down debt in addition to recording other assets andliabilities at their fair values.

Interest expense wasrecorded on pushdown debt based upon Merck KGaA’s intercompany interest rates, whichwere not necessarily indicative of rates VWR International Corporation wouldhave obtained if it were not an ultimate subsidiary of Merck KGaA. Interestexpense of $4.1, before tax effects, on pushdown debt, has been included in thepredecessor statement of operations and presented as a non-cash item in thepredecessor statement of cash flows and a capital contribution in thepredecessor statement of stockholders’ equity, as this interest was notrequired to be paid to Merck KGaA.

61

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(d) Goodwill and Other Intangible Assets***

Thefollowing table provides a summary of goodwill established as of theAcquisition and a roll forward of goodwill to December 31, 2006 asreflected in the accompanying consolidated balance sheets.

| ** **                                                                   | ** ** | **North**             | ** ** | **European** | ** ** | **Science**   | ** ** | ** ** | ** ** |
|------------------------------------------------------------------------------|------------|-----------------------|------------|--------------|------------|---------------|------------|------------|------------|
| ** **                                                                   | ** ** | **American Lab** | ** ** | **Lab**      | ** ** | **Education** | ** ** | **Total**  | ** ** |
| Balance as of  April 7, 2004 from Acquisition                           |       |                  | $          | 627.0        |       |          |       | $          | 164.3      |   |   |   | $ | 68.3 |   |   | $ | 859.6 |   |
| Changes as a result of purchase accounting adjustments  for the Acquisition  |       |                  | 4.5        |         |       |          | 8.9        |       |       |   | 0.9 |   |   | 14.3 |   |
| Currency translation changes                                                 |       |                  | 13.5       |         |       |          | 19.6       |       |       |   | — |   |   | 33.1 |   |
| Balance as of  December 31, 2004                                        |       |                  | 645.0      |         |       |          | 192.8      |       |       |   | 69.2 |   |   | 907.0 |   |
| Changes as a  result of purchase accounting adjustments for the Acquisition: |       |                  |       |         |       |          |       |       |       |   |   |   |   |   |   |
| Restructuring charges, net of tax                                            |       |                  | 1.1        |         |       |          | 19.2       |       |       |   | 0.2 |   |   | 20.5 |   |
| Curtailment of benefit plans, net of tax(1)                                  |       |                  | (12.1      | )            |       |          | —     |       |       |   | — |   |   | (12.1 | ) |
| Other adjustments, net(2)                                                    |       |                  | 0.8        |         |       |          | (4.9       | )          |       |   | (1.6 | ) |   | (5.7 | ) |
| 2005 acquisitions                                                            |       |                  | 7.3        |         |       |          | 16.0       |       |       |   | — |   |   | 23.3 |   |
| Currency translation changes                                                 |       |                  | 5.2        |         |       |          | (28.1      | )          |       |   | (0.1 | ) |   | (23.0 | ) |
| Balance as of  December 31, 2005                                        |       |                  | 647.3      |         |       |          | 195.0      |       |       |   | 67.7 |   |   | 910.0 |   |
| Finalization of purchase accounting for TSL                                  |       |                  | —     |         |       |          | (1.0       | )          |       |   | — |   |   | (1.0 | ) |
| Additional consideration for AGB                                             |       |                  | —     |         |       |          | 0.9        |       |       |   | — |   |   | 0.9 |   |
| Preliminary allocation for Sino                                              |       |                  | 1.4        |         |       |          | —     |       |       |   | — |   |   | 1.4 |   |
| Pre-Acquisition net operating and other tax loss  benefits(3)                |       |                  | (0.1       | )            |       |          | (1.5       | )          |       |   | — |   |   | (1.6 | ) |
| Currency translation changes                                                 |       |                  | —     |         |       |          | 23.4       |       |       |   | — |   |   | 23.4 |   |
| Balance as of  December 31, 2006                                        |       |                  | $          | 648.6        |       |          |       | $          | 216.8      |   |   |   | $ | 67.7 |   |   | $ | 933.1 |   |

----

(1)          During the first quarterof 2005, the Company finalized its plans with regard to the curtailment ofcertain U.S. benefit plans. In accordance with EITF 95-3, the curtailmentgains of $12.1, net of tax, were recorded as reductions to goodwill. See Note14 for further information.

(2)          Other adjustments, netinclude the favorable resolution of certain pre-Acquisition tax contingenciesof $3.6 and a charge of $4.5 that represents an adjustment to deferred taxesoriginally established in North American Lab; reductions to restructuringliabilities for environmental remediation and severances (See Note 4(a)) of$4.2 as well as a reduction to retirement benefit liabilities of $0.6 inEuropean Lab; and other minor adjustments to purchase price allocation.

(3)          The Company recognized abenefit for pre-Acquisition net operating tax losses that carried valuationallowances.

62

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Otherintangible assets, net for each of the reporting periods is shown in the tablebelow:

| ** **                                                                                                  | ** ** | **Weighted**     | ** ** | ** **            | ** ** | ** ** | ** ** |
|-------------------------------------------------------------------------------------------------------------|------------|------------------|------------|-----------------------|------------|------------|------------|
| ** **                                                                                                  | ** ** | **Average**      | ** ** | ** **            | ** ** | ** ** | ** ** |
| ** **                                                                                                  | ** ** | **Amortization** | ** ** | ** **            | ** ** | ** ** | ** ** |
| ** **                                                                                                  | ** ** | **Period**       | ** ** | **December 31,** | ** ** |
| ** **                                                                                                  | ** ** | **(Years)**      | ** ** | **2006**              | ** ** | **2005**   | ** ** |
| Amortizable  intangible assets:                                                                             |       |             |       |                  |       |       |       |   |   |
| Customer relationships in North America (net of  accumulated amortization of $20.5 and $13.2, respectively) |       |             | 32.8       |                  |       | $          | 225.4      |   | $ | 232.7 |   |
| Customer relationships in Europe (net of accumulated  amortization of $11.4 and $6.3, respectively)         |       |             | 20.3       |                  |       | 74.6       |       | 69.5 |   |
| Chemical supply agreements (net of accumulated  amortization of $9.1 and $5.2, respectively)                |       |             | 10.0       |                  |       | 23.6       |       | 24.2 |   |
| Other (net of accumulated amortization of $1.0 and  $0.4, respectively)                                     |       |             | 4.3        |                  |       | 0.2        |       | 0.8 |   |
| Total amortizable intangible assets (net of  accumulated amortization of $42.0 and $25.1, respectively)     |       |             |       |                  |       | 323.8      |       | 327.2 |   |
| Indefinite-lived  intangible assets:                                                                        |       |             |       |                  |       |       |       |   |   |
| Trademarks and tradenames                                                                                   |       |             |       |                  |       | 228.5      |       | 225.5 |   |
| Total intangible  assets, net                                                                               |       |             |       |                  |       | $          | 552.3      |   | $ | 552.7 |   |

 

Amortizationexpense for each of the reporting periods is shown in the table below:

| ** **            | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-----------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **            | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **            | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **            | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Amortization  expense |       | $                     | 15.5       |                    | $          | 14.8 |   |   | $ | 10.6 |   |   |   | $ | 0.4 |   |   |
|                       |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

Theestimated amortization expense for each of the five succeeding years andthereafter is as follows:

| Years ended  December 31: |   |   |   |
|--------------------------------|--------|--------|--------|
| 2007                           |   | $      | 15.3   |   |
| 2008                           |   | 15.3   |   |
| 2009                           |   | 15.3   |   |
| 2010                           |   | 15.2   |   |
| 2011                           |   | 15.2   |   |
| Thereafter                     |   | 247.5  |   |
|                           |   | $      | 323.8  |   |

 

63

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

**(6)   Investments**

Thecarrying amount of our 24% investment in KMF, accounted for under the equitymethod, was $8.1 and $7.4 as of December 31, 2006 and December 31,2005, respectively. Equity income, included in other (income) expense, net foreach of the reporting periods is shown in the table below:

| ** **    | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|---------------|------------|-----------------------|------------|-------------------------|------------|
| ** **    | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **    | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **    | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Equity income |       | $                     | 0.5        |                    | $          | 0.5 |   |   | $ | 0.4 |   |   |   | $ | 0.1 |   |   |
|               |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

The Company believes thatits equity investment does not qualify as a variable interest entity, asdefined in December 2003 by the FASB with its issuance of revisedInterpretation No. 46, *Consolidation ofVariable Interest Entities.*

**(7)   Fair Value ofFinancial Instruments**

Our financial instruments consist primarily of cashand cash equivalents held at financial institutions, accounts receivables,accounts payable, short- and long-term debt and foreign currency forwardcontracts.

The carrying amounts for cash and cash equivalents,accounts receivables, accounts payable and short-term debt approximate fairvalue due to the short-term nature of these instruments.

Thetable below shows the carrying amounts and estimated fair values of our fixedrate long-term note debt instruments. The fair values of these instruments wereestimated based on quotes from a bond trader making a market in these debtinstruments.

| ** **                                           | ** ** | **December 31, 2006** | ** ** | **December 31, 2005** | ** ** |
|------------------------------------------------------|------------|---------------------------------|------------|---------------------------------|------------|
| ** **                                           | ** ** | **Carrying**                    | ** ** | **Fair**                        | ** ** | **Carrying** | ** ** | **Fair** | ** ** |
| ** **                                           | ** ** | **Amount**                      | ** ** | **Value**                       | ** ** | **Amount** | ** ** | **Value** | ** ** |
| Unsecured Senior  Notes - 6.875%                     |       | $                               | 200.0      |                            | $          | 201.3 |   |   | $ | 200.0 |   |   | $ | 198.5 |   |
| Unsecured Senior  Subordinated  Notes - 8% |       | 320.0                           |       | 329.6                           |       |   | 320.0 |   |   | 318.4 |   |
| Senior Discount  Notes - 9.625%                      |       | 362.8                           |       | 372.8                           |       |   | 330.2 |   |   | 294.6 |   |
| Senior Floating  Rate Notes                          |       | 350.0                           |       | 350.0                           |       |   | — |   |   | — |   |
|                                                 |       | $                               | 1,232.8    |                            | $          | 1,253.7 |   |   | $ | 850.2 |   |   | $ | 811.5 |   |

 

64

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Thetables below show our outstanding foreign currency forward contracts, fairvalue of the outstanding contracts and pre-tax loss from settled contractsincluded in cost of goods sold for each of the reporting periods. The fairvalue of the foreign currency forward contracts was estimated based onperiod-end spot rates.

| ** **                              | ** ** | **December 31,** | ** ** |
|-----------------------------------------|------------|-----------------------|------------|
| ** **                              | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Outstanding  contracts (notional value) |       | $                     | 55.0       |   | $ | 47.0 |   |
| Fair value of contracts                 |       | 0.2                   |       | (0.7 | ) |
|                                         |            |                       |            |  |  |  |  |

 

 

| ** **  | ** ** | **Successor**                              | ** ** | **Predecessor**       | ** ** |
|-------------|------------|--------------------------------------------|------------|-----------------------|------------|
| ** **  | ** ** | ** **                                 | ** ** | ** **            | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **  | ** ** | **Year Ended December 31,** | ** ** | **December 31,** | ** ** | **April 6,** | ** ** |
| ** **  | ** ** | **2006**                                   | ** ** | **2005**              | ** ** | **2004** | ** ** | **2004** | ** ** |
| Pretax loss |       |                                       | $          | (2.0                  | )          |   |   | $ | (1.5 | ) |   |   | $ | (0.4 | ) |   |   | $ | (0.1 | ) |   |
|             |            |                                            |            |                       |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

The fair value of the Company’s interest rate cap wasnot material as of December 31, 2005.

Our financial instrumentsare spread across a number of financial institutions whose credit ratings wemonitor and believe do not currently carry any risk of non-performance. None ofthe off-balance-sheet financial instruments would result in a significant lossto the Company if the other party failed to perform according to the terms ofits agreement, as any such loss would generally be limited to the extent ofunrealized gain on any contract.

**(8)   Inventories**

Inventoriesconsist of purchased goods for sale and are valued at the lower of cost ormarket. The table below shows the percentage determined using the LIFO methodand amount that LIFO cost is less than current cost for each period.

| ** **                     | ** ** | **December 31,** | ** ** |
|--------------------------------|------------|-----------------------|------------|
| ** **                     | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Percent using  LIFO method     |       | 58                    | %          | 61 | % |
| Amount less than current  cost |       | $                     | 3.3        |   | $ | 1.4 |   |
|                                |            |                       |            |  |  |  |  |

 

The cost of the remaininginventories is determined using the average cost or FIFO methods.

65

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

**(9)   Property andEquipment**

Propertyand equipment, net, for each of the reporting periods is shown in the tablebelow:

| ** **                       | ** ** | **December 31,** | ** ** |
|----------------------------------|------------|-----------------------|------------|
| ** **                       | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Land                             |       | $                     | 13.6       |   | $ | 13.0 |   |
| Buildings and  improvements      |       | 96.8                  |       | 78.3 |   |
| Equipment and  computer software |       | 101.4                 |       | 94.4 |   |
| Capital additions  in process    |       | 4.8                   |       | 6.0 |   |
|                             |       | 216.6                 |       | 191.7 |   |
| Less accumulated  depreciation   |       | (59.7                 | )          | (34.9 | ) |
| Net property and  equipment      |       | $                     | 156.9      |   | $ | 156.8 |   |

 

Depreciationexpense for each of the reporting periods is shown in the table below:

| ** **            | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-----------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **            | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **            | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **            | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Depreciation  expense |       | $                     | 25.9       |                    | $          | 19.1 |   |   | $ | 15.2 |   |   |   | $ | 8.5 |   |   |
|                       |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

**(10)   AccountsPayable**

The Company maintains acentralized cash management system for certain U.S. accounts payable functions.Accordingly, included in accounts payable at December 31, 2006 and 2005are approximately $15.5 and $48.9, respectively, of uncleared payments.

**(11)   AccruedExpenses**

Thecomponents of accrued expenses for each of the reporting periods is shown inthe table below:

| ** **                              | ** ** | **December 31,** | ** ** |
|-----------------------------------------|------------|-----------------------|------------|
| ** **                              | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Other accrued  expenses                 |       | $                     | 61.7       |   | $ | 46.4 |   |
| Employee-related  accruals              |       | 49.4                  |       | 33.3 |   |
| Income taxes  payable                   |       | 23.9                  |       | 11.5 |   |
| Accrued interest                        |       | 16.1                  |       | 14.9 |   |
| Deferred income  taxes                  |       | 14.2                  |       | 6.7 |   |
| Restructuring-related  accruals         |       | 4.1                   |       | 16.6 |   |
| Current portion  of pension liabilities |       | 1.4                   |       | 10.1 |   |
|                                    |       | $                     | 170.8      |   | $ | 139.5 |   |

 

66

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

**(12)   Debt**

Thefollowing is a summary of our debt obligations:

| ** **                                       | ** ** | **December 31,** | ** ** |
|--------------------------------------------------|------------|-----------------------|------------|
| ** **                                       | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Senior Secured  Credit Facility                  |       | $                     | 448.7      |   | $ | 537.1 |   |
| 6.875% Unsecured  Senior Notes due 2012          |       | 200.0                 |       | 200.0 |   |
| 8% Unsecured  Senior Subordinated Notes due 2014 |       | 320.0                 |       | 320.0 |   |
| 9.625% Senior Discount  Notes due 2015           |       | 362.8                 |       | 330.2 |   |
| Senior Floating  Rate Notes due 2011             |       | 350.0                 |       | — |   |
| Bank loans                                       |       | 0.3                   |       | 0.3 |   |
| Capital leases                                   |       | 5.8                   |       | 5.8 |   |
| Total debt                                       |       | 1,687.6               |       | 1,393.4 |   |
| Less short-term  portion                         |       | (21.8                 | )          | (45.5 | ) |
| Total long  term-portion                         |       | $                     | 1,665.8    |   | $ | 1,347.9 |   |

 

Thefollowing table summarizes the maturities of our debt obligations as of December 31,2006:

| ** **                                              | ** ** | **2007** | ** ** | **2008** | ** ** | **2009** | ** ** | **2010** | ** ** | **2011** | ** ** | **Thereafter** | ** ** | **Total** | ** ** |
|---------------------------------------------------------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------|------------|----------------|------------|-----------|------------|
| Senior Secured Credit Facility                          |       | $        | 20.5       |     | $          | 4.7      |       | $        | 4.7        |     | $          | 221.9          |       | $         | 196.9      |   |   | $ | — |   |   | $ | 448.7 |   |
| 6.875% Unsecured  Senior Notes due 2012                 |       | —   |       | —   |       | —   |       | —   |       | —   |       |           | 200.0      |      |       | 200.0 |   |
| 8% Unsecured  Senior Subordinated Notes due 2014        |       | —   |       | —   |       | —   |       | —   |       | —   |       |           | 320.0      |      |       | 320.0 |   |
| 9.625% Senior  Discount Notes due 2015 (accreted value) |       | —   |       | —   |       | —   |       | —   |       | —   |       |           | 481.0      |      |       | 481.0 |   |
| Senior Floating  Rate Notes due 2011                    |       | —   |       | —   |       | —   |       | —   |       | 350.0    |       |           | —     |      |       | 350.0 |   |
| Bank loans                                              |       | 0.3      |       | —   |       | —   |       | —   |       | —   |       |           | —     |      |       | 0.3 |   |
| Capital leases                                          |       | 1.0      |       | 0.8      |       | 0.6      |       | 0.7      |       | 0.7      |       |           | 2.0        |      |       | 5.8 |   |
| Total                                                   |       | $        | 21.8       |     | $          | 5.5      |       | $        | 5.3        |     | $          | 222.6          |       | $         | 547.6      |   |   | $ | 1,003.0 |   |   | $ | 1,805.8 |   |

 

67

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

 

*(a) SeniorSecured Credit Facility*

The Senior Secured Credit Facility provides foraggregate maximum borrowings of approximately $598.7 under (1) a term loanfacility providing for a loan denominated in Euros in an aggregate principalamount currently outstanding of $141.6 as of December 31, 2006, (2) a termloan facility providing for a term loan denominated in U.S. dollars in anaggregate principal amount currently outstanding at $307.1, and (3) amulti-currency revolving credit facility, providing for up to $150.0 inmulti-currency revolving loans (reduced by the amount of any standby andcommercial letters of credit drawn under that facility) outstanding at anytime. As of December 31, 2006, noamount was outstanding under the multi-currency revolving creditfacility, and we had $9.5 in undrawn letters of credit and up to $140.5 ofadditional debt that could be incurred as revolving loans or under standby andcommercial letters of credit. Undrawn amounts under the multi-currencyrevolving credit facility are available on a revolving credit basis for generalcorporate purposes. The Senior SecuredCredit Facility permits one or more of our foreign subsidiaries to becomeborrowers under the facility upon the satisfaction of certain conditions. InAugust of 2006, the Senior Secured Credit Facility was amended to allowfor $60.0 to be spent on acquisitions going forward, subject to annualincreases.

The term loan facilities will mature in 2011 and themulti-currency revolving credit facility will mature in 2009. The principalamount of the term loans are amortized in annual installments for the first sixyears and quarterly installments during the seventh year, subject to adjustmentif VWR makes optional or mandatory prepayments on the term loans.

Subject to certainexceptions, the Senior Secured Credit Facility is subject to mandatoryprepayment and reduction in an amount equal to:

·       Thenet proceeds of (1) any permitted receivables securitization program, (2) certaindebt offerings, (3) certain asset sales and (4) certain insurancerecovery and condemnation events; and

·       50%of VWR’s excess cash flow net of any voluntary principal prepayments (asdefined) for any fiscal year unless certain leverage ratio targets are met.

A $44.5 mandatoryprincipal prepayment was made in March 2006 based on VWR’s excess cashflow (as defined) generated in 2005. A payment of $20.5 is due in March 2007based on VWR’s excess cash flow generated in 2006. These amounts are includedin short-term debt in our consolidated balance sheets as of December 31,2006 and 2005, respectively. In September 2006, a $60.0 voluntaryprincipal prepayment was made.

***Security; Guarantees***

The obligations under the Senior Secured CreditFacility are guaranteed by VWR’s parent, CDRV Holdings, Inc., and certainof VWR’s domestic subsidiaries, as that term is defined in the creditagreement. The Senior Secured Credit Facility and the guarantees thereunder aresecured by security interests in and pledges of or liens on substantially allof the tangible and intangible domestic assets of VWR.

68

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

The Senior Secured CreditFacility and the guarantees thereunder are also secured by a pledge of 65% ofthe capital stock of the foreign subsidiary holding companies of CDRV Holdings, Inc.and VWR, which in turn hold the capital stock of certain of our foreignsubsidiaries.

***Interest***

At our election, theinterest rates applicable to the U.S. dollar-denominated term loan can be basedon a fluctuating rate of interest measured by reference to either (1) anadjusted London inter-bank offered rate, or LIBOR, plus a borrowing margin or (2) analternate base rate, or ABR, plus a borrowing margin. The interest rateapplicable to the Euro-denominated term loan is based on a fluctuating rate ofinterest measured by reference to an adjusted EURIBOR plus a borrowing margin.As of December 31, 2006, the interest rates on the U.S. dollar-denominatedand Euro-denominated term loans were 7.63% and 6.28%, respectively.

***Covenants***

The Senior Secured CreditFacility contains a number of covenants that, among other things, limit orrestrict VWR’s ability to dispose of assets, incur additional indebtedness,incur guarantee obligations, prepay other indebtedness, make acquisitions,engage in mergers or consolidations, change the business conducted taken as awhole, make capital expenditures, or engage in certain transactions withaffiliates. In addition, the Senior Secured Credit facility requires VWR tocomply with specified financial ratios and tests, including a minimum interestexpense coverage ratio, a maximum leverage ratio and a maximum capitalexpenditures test. As of December 31, 2006, VWR was in compliance with allcovenants.

***Subsequent Amendment***

The terms of the SeniorSecured Credit Facility and the indentures governing the VWR Notes significantlyrestrict VWR from making distributions and otherwise transferring assets to itsdirect or indirect parent companies. In January 2007, VWR amendedprovisions in the credit agreement of the Senior Secured Credit Facility toprovide VWR with more flexibility to make dividends or other payments to enable the Company to pay Cash Interest withrespect to the Senior Floating Rate Notes and decreased the interestmargin it pays on the Euro-denominated term loan by 50 basis points. On March 1,2007, VWR paid a dividend of $7.4 thatenabled the Company to make a Cash Interest payment with respect to the SeniorFloating Rate Notes.

***(b) VWR Notes***

The 67¤8% unsecuredsenior notes mature on April 15, 2012 and the 8% unsecured seniorsubordinated notes mature on April 15, 2014. The VWR Notes requiresemiannual cash interest payments on April 15 and October 15 toholders of record at the close of business as of the preceding April 1 andOctober 1. The senior subordinated notes are subordinated in right ofpayment to all secured debt of VWR and the senior notes.

The senior notes are required to be guaranteed on asenior basis by any significant domestic subsidiary of VWR. The seniorsubordinated notes are required to be guaranteed on a senior subordinated basisby 

69

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

any significant domesticsubsidiary of VWR. As of December 31, 2006, neither of the VWR Notes areguaranteed by any of VWR’s subsidiaries because none constitutes a significantdomestic subsidiary as defined in the indentures for these notes.

These VWR Notes contain anumber of covenants which, among other things, limit VWR’s ability to incuradditional indebtedness, make distributions of cash or property, makeacquisitions, engage in transactions with affiliates and incur liens on assets.As of December 31, 2006, VWR was in compliance with all covenants. Upon achange of control, holders of these notes have the right to require VWR torepurchase these notes at a purchase price equal to 101% of principal plusaccrued and unpaid interest through the date of repurchase. Subject to specificterms and conditions contained in the indentures for these notes, the seniornotes and senior subordinated notes are redeemable at the VWR’s option prior tomaturity.

***(c) ******Senior Discount Notes***

On December 16, 2004,CDRV issued $481.0 aggregate principal amount at maturity ($299.4 grossproceeds) of Senior Discount Notes. The proceeds, net of $1.5 of debt issuancecosts, were used to pay a cash dividend to holders of our common stock in December 2004.In connection with various transactions involving the issuance of the SeniorFloating Rate Notes, on December 6, 2006, Holdings Corp assumed theobligations under the Senior Discount Notes. We guarantee the Senior DiscountNotes on an unsecured senior subordinated basis. The Senior Discount Notes aresenior unsecured obligations of Holdings Corp and are structurally subordinatedto all obligations and other liabilities of Holdings Corp’s existing and futuresubsidiaries. No cash interest will accrue on the Senior Discount Notes priorto January 1, 2010. Thereafter, cash interest will accrue and be payablesemiannually in arrears on January 1, and July 1 of each year,commencing on July 1, 2010, at the rate of 95¤8% per annum,provided that on any interest payment date, interest will be payable only tothe extent of funds actually available for distribution by our subsidiaries to HoldingsCorp under specified provisions of the indentures governing the VWR Notes andthe Senior Secured Credit Facility covenants.

***(d) ******Senior Floating Rate Notes***

On December 14, 2006, CDRV issued $350.0aggregate principal amount of Senior Floating Rate Notes. The proceeds from theissuance, net of related expenses, were used to pay a distribution to theholders of our common stock. The Senior Floating Rate Notes are seniorunsecured obligations of the Company and are structurally subordinated to allobligations and other liabilities of the Company’s existing and futuresubsidiaries. Interest will accrue and be payable quarterly, commencing March 1,2007. Interest on the Senior Floating Rate Notes may be paid (1) entirelyin cash (“Cash Interest”), (2) entirely by increasing the principal amountof the outstanding Senior Floating Rate Notes (“PIK Interest”) or (3) 50%as Cash Interest and 50% as PIK Interest. Cash Interest will accrue on theSenior Floating Rate Notes at a rate per annum equal to the applicable LIBORrate plus the Applicable Spread (as defined in the agreement) (“Cash InterestRate”). PIK Interest will accrue on the Senior Floating Rate Notes at a rateper annum equal to the Cash Interest Rate plus 75 basis points.

VWR does not guarantee theobligations under the Senior Discount Notes or the Senior Floating Rate Notes.

70

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

***(e) Bank Loans***

Bank loans consist ofamounts owed by certain foreign subsidiaries that are operating from time totime with and without formal lines of credit with local banks to fundshort-term needs. The bank loans had an average interest rate of 4.3% and 5.4%as of December 31, 2006 and December 31, 2005, respectively. Theborrowings available to and drawn from time to time by our foreign subsidiariesare limited in aggregate by certain covenants contained within the SeniorSecured Credit Facility, as noted above.

***(f) Interest on Push Down Debt***

The push down debtreflected the debt incurred by Merck KGaA as a result of its acquisition ofVWRSP. The push down debt was classified as long-term because Merck KGaA hadrepresented it would not require payment on the debt before 12 months. Theaverage interest rate on the push down debt was 2.0% for the period January 1,2004 to April 6, 2004. This interest rate reflects the rate charged byMerck KGaA related to intercompany borrowing. This debt was extinguished inconnection with the Acquisition.

***(g) Interest on Loans from Merck KGaA and Affiliates***

Prior to the Acquisition,VWR International Corporation had various loans with Merck KGaA and itsaffiliates. Interest expense and average interest rate on these loans was $1.4and 2.6% for the period January 1, 2004 to April 6, 2004. This debtwas extinguished in connection with the Acquisition.

**(13)**   **Income Taxes**

Taxeson income before cumulative effect of a change in accounting principle arebased on income before income taxes as follows:

| ** **    | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|---------------|------------|-----------------------|------------|-------------------------|------------|
| ** **    | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **    | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **    | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| United States |       |                  | $          | 19.0                    |       |   |   | $ | 2.3 |   |   |   | $ | 25.4 |   |   |   | $ | 20.0 |   |   |
| Foreign       |       |                  | 60.1       |                    |       |   | 40.6 |   |   |   | 28.7 |   |   |   | 15.8 |   |   |
| Total         |       |                  | $          | 79.1                    |       |   |   | $ | 42.9 |   |   |   | $ | 54.1 |   |   |   | $ | 35.8 |   |   |

 

71

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Theprovision for income taxes is as follows:

| ** **                              | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-----------------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                              | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                              | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                              | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Current:                                |       |                  |       |                    |       |   |   |   |   |   |   |   |   |
| Federal                                 |       | $                     | 2.9        |                    | $          | (2.6 | ) |   | $ | 4.1 |   |   |   | $ | 10.1 |   |   |
| State                                   |       | 2.0                   |       | 0.6                     |       |   | 1.6 |   |   |   | 0.5 |   |   |
| Foreign                                 |       | 22.4                  |       | 21.2                    |       |   | 14.3 |   |   |   | 5.2 |   |   |
|                                    |       | 27.3                  |       | 19.2                    |       |   | 20.0 |   |   |   | 15.8 |   |   |
| Deferred:                               |       |                  |       |                    |       |   |   |   |   |   |   |   |   |
| Federal                                 |       | 5.1                   |       | 7.4                     |       |   | 4.5 |   |   |   | 0.3 |   |   |
| State                                   |       | 1.0                   |       | 2.6                     |       |   | 0.2 |   |   |   | — |   |   |
| Foreign                                 |       | (0.7                  | )          | (8.3                    | )          |   | (1.7 | ) |   |   | 0.6 |   |   |
|                                    |       | 5.4                   |       | 1.7                     |       |   | 3.0 |   |   |   | 0.9 |   |   |
| Tax benefit on  push down debt interest |       | —                |       | —                  |       |   | — |   |   |   | (1.6 | ) |   |
| Total tax  provision                    |       | $                     | 32.7       |                    | $          | 20.9 |   |   | $ | 23.0 |   |   |   | $ | 15.1 |   |   |

 

The tax benefit on push down debt interest is anon-cash benefit, which is recorded in the statements of stockholders’ equity.

Thereconciliation of tax computed at the U.S. federal statutory tax rate of 35% onincome before income taxes and cumulative effect of a change in accountingprinciple to the actual income tax provision is as follows:

| ** **                                     | ** ** | **Successor**                                                                                | ** ** | **Predecessor**                                                                              | ** ** |
|------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|
| ** **                                     | ** ** | **Year Ended**                                                                          | ** ** | **April 7 -**                                                                      | ** ** | **January 1 -** | ** ** |
| ** **                                     | ** ** | **December 31,**                                                                        | ** ** | **December 31,**                                                                        | ** ** | **April 6,** | ** ** |
| ** **                                     | ** ** | **       2006       ** | ** ** | **       2006       ** | ** ** | **2004** | ** ** | **       2004       ** | ** ** |
| Statutory tax  expense                         |       |                                                                                         | 35.0       | %                                                                                            |       |   | 35.0 | % |   |   | 35.0 | % |   |   | 35.0 | % |   |
| State income  taxes net of federal tax benefit |       |                                                                                         | 2.5        | %                                                                                            |       |   | 4.7 | % |   |   | 1.9 | % |   |   | 0.1 | % |   |
| Foreign rate  differential                     |       |                                                                                         | 0.8        | %                                                                                            |       |   | (1.9 | )% |   |   | (3.6 | )% |   |   | — |   |   |
| Nondeductible  expenses                        |       |                                                                                         | 0.7        | %                                                                                            |       |   | 2.3 | % |   |   | 4.0 | % |   |   | 1.1 | % |   |
| Change in  valuation allowance                 |       |                                                                                         | 0.4        | %                                                                                            |       |   | 6.3 | % |   |   | 5.1 | % |   |   | 6.1 | % |   |
| Other, net                                     |       |                                                                                         | 1.9        | %                                                                                            |       |   | 2.3 | % |   |   | — |   |   |   | (0.1 | )% |   |
| Total tax  provision                           |       |                                                                                         | 41.3       | %                                                                                            |       |   | 48.7 | % |   |   | 42.4 | % |   |   | 42.2 | % |   |

 

72

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Deferred taxliabilities and assets are comprised of the following:

| ** **                                                    | ** ** | **December 31,** | ** ** |
|---------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                    | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Deferred tax assets:                                          |       |                  |       |   |   |
| Pensions                                                      |       | $                     | 16.6       |   | $ | 25.0 |   |
| Other compensation  benefits                                  |       | 6.4                   |       | 5.1 |   |
| Net operating loss  carryforwards                             |       | 43.1                  |       | 24.9 |   |
| Foreign tax credit and  alternative minimum tax carryforwards |       | 4.0                   |       | 3.7 |   |
| Inventory overhead  capitalization                            |       | 2.5                   |       | 3.0 |   |
| Accrued expenses                                              |       | 6.7                   |       | 5.5 |   |
| Receivables                                                   |       | 3.7                   |       | 1.9 |   |
| Other, net                                                    |       | —                |       | 0.5 |   |
|                                                          |       | 83.0                  |       | 69.6 |   |
| Valuation allowances                                          |       | (39.5                 | )          | (21.8 | ) |
| Total deferred tax  assets, net of valuation allowances       |       | 43.5                  |       | 47.8 |   |
| Deferred tax liabilities:                                     |       |                  |       |   |   |
| Depreciation                                                  |       | 12.6                  |       | 14.1 |   |
| Goodwill amortization                                         |       | 32.0                  |       | 20.8 |   |
| Intangibles                                                   |       | 203.9                 |       | 207.3 |   |
| Inventory valuation                                           |       | 19.0                  |       | 18.6 |   |
| Total deferred tax  liabilities                               |       | 267.5                 |       | 260.8 |   |
| Net deferred tax liabilities                                  |       | $                     | 224.0      |   | $ | 213.0 |   |

 

Deferred incometaxes have been classified in the consolidated balance sheets as follows:

| ** **                                                          | ** ** | **December 31,** | ** ** |
|---------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                          | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Deferred tax  asset—current (included in other current assets) |       | $                     | (4.1       | ) | $ | (1.4 | ) |
| Deferred tax  asset—noncurrent                                 |       | (13.1                 | )          | (11.5 | ) |
| Deferred tax  liability—current (included in accrued expenses) |       | 14.2                  |       | 6.7 |   |
| Deferred tax  liability—noncurrent                             |       | 227.0                 |       | 219.2 |   |
| Net deferred tax liability                                          |       | $                     | 224.0      |   | $ | 213.0 |   |

 

The Company evaluates therealizability of deferred tax assets taking into consideration such factors asthe future reversals of existing taxable temporary differences, projectedfuture operating results, the available carryforward period, and othercircumstances. Valuation allowances have been recorded for deferred tax assetsrelated to foreign net operating loss carryforwards, foreign tax creditcarryforwards and other deferred tax assets that are not expected to berealized. As of December 31, 2006, the Company had valuation allowances of$12.4 related to pre-Acquisition foreign operating losses and tax creditcarryforwards. Should such losses ultimately be recovered, the resultantreduction in the valuation allowance will be recorded as a reduction togoodwill. During 2006, certain tax benefits amounting to $1.4 reduced goodwill.With respect to the remaining deferred tax assets, management believes it ismore likely than not that the Company will realize the benefits of thesedeductible differences, net of the existing valuation allowances.

73

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Neither income taxes norforeign withholding taxes have been provided on approximately $121.7 ofcumulative undistributed earnings of foreign subsidiaries at December 31,2006. These earnings are considered permanently invested in the business and,under the tax laws, are not subject to such taxes until distributed.

As of December 31,2006, the Company has a federal net operating loss carryforward of $15.7 thatbegins to expire in 2025 and U.S. state net operating loss carryforwards ofapproximately $12.9 that expire at various times through 2025. In addition, theCompany has foreign net operating loss carryforwards of approximately $127.0,$2.0 that begin to expire in 2013 and another $125.0 that have indefiniteexpirations. Of these foreign losses, approximately $57.0 arose from certainfinancing arrangements. These losses have full valuation allowances. In thepast, these amounts were presented net of the related valuation allowance.Further, as of December 31, 2006, there are U.S. foreign tax creditcarryforwards of $3.6 that will expire at various times through 2016.

The Company files aconsolidated federal and certain state combined income tax returns with itsdomestic subsidiaries.

**(14)   BenefitPrograms**

VWR sponsors variousretirement plans for most full-time employees. During 2004, we launched acomprehensive study of our U.S. employee benefit programs. The study wasdesigned to both benchmark our benefits from a competitive perspective andassess the balance of the program components in terms of employee needs. TheBoard of Directors approved a number of benefit changes during February 2005that were implemented effective June 1, 2005. The most significant changesinvolved the curtailment of our U.S. defined benefit plan, improvements in therate of employer matching contributions to our defined contribution plan,increased rates of employee contributions to fund ongoing medical benefits, andthe elimination of carryover vacation days by the end of 2006. These changesare expected to modestly reduce our benefit costs prospectively.

***(a) Adoptionof SFAS 158***

Asdiscussed in Note 2 (u), the Company adopted the provisions of SFAS 158 as of December 31,2006. The table below summarizes the incremental effects of the adoption ofSFAS 158 on the individual line-items in our consolidated balance sheet at December 31,2006:

| ** **                             | ** ** | **Pre SFAS 158** | ** ** | **SFAS 158** | ** ** | **Post SFAS 158** | ** ** |
|----------------------------------------|------------|----------------------------|------------|-------------------|------------|-----------------------------|------------|
| ** **                             | ** ** | **Adoption**               | ** ** | **Adjustment**    | ** ** | **Adoption**                | ** ** |
| Assets:                                |       |                       |       |              |       |                        |       |   |   |   |   |   |   |
| Deferred income  taxes—noncurrent |       |                       | $          | 11.6              |       |                        |       | $ | 1.5 |   |   |   | $ | 13.1 |   |   |
| Other assets—noncurrent           |       |                       | 43.4       |              |       |                        | (0.3       | ) |   |   | 43.1 |   |   |
| Liabilities:                           |       |                       |       |              |       |                        |       |   |   |   |   |   |   |
| Accrued expenses                       |       |                       | 178.0      |              |       |                        | (7.2       | ) |   |   | 170.8 |   |   |
| Other long-term  liabilities           |       |                       | 69.8       |              |       |                        | 10.7       |   |   |   | 80.5 |   |   |
| Stockholders’ Equity:             |       |                       |       |              |       |                        |       |   |   |   |   |   |   |
| Accumulated other comprehensive income |       |                       | 53.1       |              |       |                        | (2.3       | ) |   |   | 50.8 |   |   |
|                                        |            |                            |            |                   |            |                             |            |  |  |  |  |  |  |  |  |  |

 

In accordance with SFAS158, our accounting and related disclosures for previous periods were notaffected by the adoption of this Standard. Subsequent changes in funded statuswill be recognized as a 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

componentof other comprehensive income to the extent they have not yet been recognizedas a component of net periodic benefit cost.

***(b) U.S.Defined Benefit Plan***

Pension plan benefits forthe defined benefit plan are based primarily on participants’ compensation andyears of credited service. It has been VWR’s policy to fund the minimum amountrequired by local regulations.

As a result of the decision to curtail the plandiscussed above, future benefits were frozen effective May 31, 2005 for mostparticipants. Most participants will earn no further benefits under the planafter that date. As a result, there was a reduction in the plan’s projectedbenefit obligation of $19.4 that was recorded as a reduction to pensionliabilities at December 31, 2005. Goodwill and deferred tax assets werealso reduced by $11.9 and $7.5, respectively, at December 31, 2005.

VWR uses a December 31measurement date for the plan. The change in benefit obligation, change in planassets, and reconciliation of funded status of VWR’s defined benefit plan thatpreviously covered substantially all of its U.S. employees, except foremployees covered by independently operated collective bargaining plans, wereas follows:

| ** **                                          | ** ** | **Year Ended  December 31,** | ** ** |
|-----------------------------------------------------|------------|----------------------------------------|------------|
| ** **                                          | ** ** | **2006**                               | ** ** | **2005** | ** ** |
| Change in benefit  obligation:                      |       |                                   |       |   |   |
| Benefit obligation—beginning  of period        |       | $                                      | 150.4      |   | $ | 151.9 |   |
| Service cost                                        |       | 2.3                                    |       | 4.6 |   |
| Interest cost                                       |       | 8.3                                    |       | 8.2 |   |
| Actuarial loss (gain)                               |       | (7.7                                   | )          | 9.5 |   |
| Benefits paid                                       |       | (4.5                                   | )          | (4.4 | ) |
| Curtailment                                         |       | (1.4                                   | )          | (19.4 | ) |
| Benefit obligation—end of  period              |       |   147.4                           |       |   150.4 |   |
| Change in plan assets:                              |       |                                   |       |   |   |
| Fair value of plan  assets—beginning of period |       |   107.1                           |       |   105.1 |   |
| Actual gain on plan  assets                         |       | 14.3                                   |       | 6.4 |   |
| Company contributions                               |       | 12.4                                   |       | — |   |
| Benefits paid                                       |       | (4.5                                   | )          | (4.4 | ) |
| Fair value of plan assets—end  of period       |       |   129.3                           |       |   107.1 |   |
| Funded status                                       |       | $                                      | (18.1      | ) | $ | (43.3 | ) |

 

Amounts recognizedin the consolidated balance sheet were as follows:

| ** **                                          | ** ** | **December 31,** | ** ** |
|-----------------------------------------------------|------------|-----------------------|------------|
| ** **                                          | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Accrued expenses                                    |       | $                     | —     |   | $ | (8.5 | ) |
| Other long-term  liabilities                        |       | (18.1                 | )          | (32.9 | ) |
| Accumulated other  comprehensive income—pretax |       | 4.4                   |       | 17.1 |   |
|                                                     |            |                       |            |  |  |  |  |

 

75

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

The amount in accumulatedother comprehensive income that has not been recognized as net periodic pensioncost at December 31, 2006 relates to an actuarial loss.

The accumulated benefit obligation was $147.4 and$148.5 at December 31, 2006 and 2005, respectively.

Netperiodic pension cost includes the following components:

| ** **                      | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|---------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                      | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                      | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                      | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Service cost                    |       | $                     | 2.3        |                    | $          | 4.6 |   |   | $ | 5.0 |   |   |   | $ | 1.8 |   |   |
| Interest cost                   |       | 8.3                   |       | 8.2                     |       |   | 5.9 |   |   |   | 2.2 |   |   |
| Expected return on plan  assets |       | (9.1                  | )          | (8.5                    | )          |   | (5.6 | ) |   |   | (2.5 | ) |   |
| Recognized net actuarial  loss  |       | 0.4                   |       | —                  |       |   | — |   |   |   | 0.8 |   |   |
| Net periodic pension cost       |       | $                     | 1.9        |                    | $          | 4.3 |   |   | $ | 5.3 |   |   |   | $ | 2.3 |   |   |

 

Inaddition to the net periodic cost above, the following (decreases)/increases inthe liability included in other comprehensive income occurred:

| ** **                                                               | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|--------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                                                               | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                                                               | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                                                               | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| (Decrease) increase in  liability included in other comprehensive income |       | $                     | (12.7      | )                       | $          | 17.1 |   |   | $ | — |   |   |   | $ | — |   |   |
|                                                                          |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

Thenet periodic pension cost and the projected benefit obligation were based onthe following assumptions:

| ** **                                                                                         | ** ** | **Successor**                                                                                | ** ** | **Predecessor**                                                                              | ** ** |
|----------------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------|------------|
| ** **                                                                                         | ** ** | **Year Ended**                                                                          | ** ** | **April 7 -**                                                                      | ** ** | **January 1 -** | ** ** |
| ** **                                                                                         | ** ** | **December 31,**                                                                        | ** ** | **December 31,**                                                                        | ** ** | **April 6,** | ** ** |
| ** **                                                                                         | ** ** | **       2006       ** | ** ** | **       2005       ** | ** ** | **2004** | ** ** | **       2004       ** | ** ** |
| Discount rate for  benefit obligation                                                              |       |                                                                                         | 5.95       | %                                                                                            |       |   | 5.65 | % |   |   | 5.90 | % |   |   | 6.25 | % |   |
| Discount rate for net  periodic pension cost                                                       |       |                                                                                         | 5.65       | %                                                                                            |       |   | 5.90 | % |   |   | 6.25 | % |   |   | 6.25 | % |   |
| Expected rate of return  on plan assets for net periodic pension cost                              |       |                                                                                         | 8.25       | %                                                                                            |       |   | 8.25 | % |   |   | 8.25 | % |   |   | 9.00 | % |   |
| Assumed annual rate of compensation increase for  benefit obligation and net periodic pension cost |       |                                                                                         | 4.00       | %                                                                                            |       |   | 4.00 | % |   |   | 4.00 | % |   |   | 4.00 | % |   |

 

We select our discount rate by reviewing certain bondyield curves available as of year end with Moody’s or Standard & Poor’sratings of “Aa” or “AA”, respectively. Based on our review, at 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

December 31, 2006, weselected 5.95% to adjust for any differences between the terms of the bonds andthe actual future benefit payments.

Thetable below shows the asset allocation target range and the December 31,2006 and 2005 positions for each asset class:

| ** **                 | ** ** | **Target**            | ** ** | ** **            | ** ** | ** ** | ** ** |
|----------------------------|------------|-----------------------|------------|-----------------------|------------|------------|------------|
| ** **                 | ** ** | **range at**     | ** ** | ** **            | ** ** | ** ** | ** ** |
| ** **                 | ** ** | **December 31,** | ** ** | **December 31,** | ** ** |
| ** **                 | ** ** | **2006**              | ** ** | **2006**              | ** ** | **2005**   | ** ** |
| Domestic equity funds      |       |                  | 40%-60%    |                  |       |       | 59         | % |   |   | 61 | % |   |
| Fixed income fund          |       |                  | 20%-30%    |                  |       |       | 21         | % |   |   | 25 | % |   |
| International equity  fund |       |                  | 0%-10%     |                  |       |       | 12         | % |   |   | 11 | % |   |
| Money market funds         |       |                  | 0%-20%     |                  |       |       | 8          | % |   |   | 3 | % |   |
|                       |       |                  |       |                  |       |       | 100        | % |   |   | 100 | % |   |

 

The principal investmentobjective is to obtain the highest return (defined as income plus realized andunrealized capital gains and losses) consistent with the long-term security ofanticipated benefit payments. This is to be achieved by (a) investing asubstantial portion of fund assets in equity investments; (b) investmentcosts and volatility will be limited by investing the fund’s core assets inpassive or commingled funds that participate in a range of widely diversifiedequity and non-equity investments; (c) active managers will control nomore than a third of the fund’s assets; (d) in order to increase thestability of fund performance while maintaining expected returns, non-callablebonds, annuities or guaranteed insurance contracts may be purchased to coverpayments to retired participants whenever the rate of return offered by suchcontracts significantly exceeds the average returns projected for other fundassets and (e) fund contributions will be set to meet an asset fundingtarget of 125% of the present value of accumulated pension benefits. Theexpected rate of return on plan assets was based on our historical returns.

The Company expects to make contributions to the planof approximately $8.2 in 2007.

Thefollowing benefit payments, which reflect expected future service, are expectedto be paid:

| 2007        |   | $    | 4.9    |   |
|-------------|--------|------|--------|--------|
| 2008        |   | 5.3  |   |
| 2009        |   | 5.7  |   |
| 2010        |   | 6.1  |   |
| 2011        |   | 6.5  |   |
| 2012 - 2016 |   | 41.6 |   |

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

 

***(c) Other U.S. Benefit Plans***

VWRalso sponsors defined contribution plans and a supplemental pension plan forcertain senior officers. In addition, certain employees are covered underunion-sponsored, collectively bargained plans. Expenses under these union-sponsoredplans are determined in accordance with negotiated labor contracts. Expensesincurred under these plan were as follows:

| ** **                  | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-----------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                  | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                  | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                  | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Defined  contribution plans |       | $                     | 6.2        |                    | $          | 3.5 |   |   | $ | 1.6 |   |   |   | $ | 0.6 |   |   |
| Union-sponsored  plans      |       | 0.7                   |       | 0.8                     |       |   | 0.6 |   |   |   | 0.1 |   |   |
| Supplemental pension  plan  |       | 0.4                   |       | 0.3                     |       |   | 0.4 |   |   |   | 0.2 |   |   |
|                             |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

VWRprovides health benefits to certain retirees and a limited number of active employeesand their spouses. These benefit plans are unfunded. Shown below are theaccumulated postretirement benefit obligation and the weighted average discountrate used in determining the accumulated postretirement benefit obligation. Theannual cost of these plans is not material.

| ** **                                                                         | ** ** | **December 31,** | ** ** |
|------------------------------------------------------------------------------------|------------|-----------------------|------------|
| ** **                                                                         | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Postretirement  benefit obligations                                                |       | $                     | 2.6        |   | $ | 2.8 |   |
| Weighted average  discount rate                                                    |       | 5.95                  | %          | 5.65 | % |
| Health care cost  trend rate assumed for next year                                 |       | 10.50                 | %          | 11.00 | % |
| Rate to which the  cost trend rate is assumed to decline (the ultimate trend rate) |       | 5.00                  | %          | 5.00 | % |
| Year that the rate  reaches the ultimate trend rate                                |       | 2014                  |       | 2013 |   |
|                                                                                    |            |                       |            |  |  |  |  |

 

Assumed health care costtrend rates have a significant effect on the amounts reported for health careplans. A one-percentage-point change in assumed health care cost trend rateswould change our postretirement benefit obligation as of December 31, 2006by approximately $0.5.

***(d) Non-U.S. Benefit Plans***

VWR has defined benefit pension plans at variousforeign subsidiaries. Our significant Non-U.S. defined benefit plans are inGermany, the UK and France.

Our German subsidiary has an unfunded defined benefitpension plan for current employees and retirees. Prior to the Acquisition, ourUK subsidiary had employees that participated in Merck KGaA sponsored definedbenefit pension plans, which were treated as multiemployer plans. VWR’scontributions to these multiemployer plans were $0.2 for the period January 1,2004 to April 6, 2004. In connection with the Acquisition, Merck KGaAagreed to deliver fully funded plans to VWR if VWR withdrew from Merck KGaAsponsored defined benefit pension plans. Effective April 7, 2004, VWRwithdrew from the Merck KGaA sponsored plans and our UK subsidiary establishedtwo defined benefit plans to provide for the 

78

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

benefits previouslycovered under the Merck KGaA sponsored defined benefit plans. Our Frenchsubsidiary has a defined benefit pension plan for a certain group of employeesthat is closed to new participants.

Inaddition, VWR has several small defined benefit pension plans at otherlocations. VWR uses a December 31 measurement date for these plans.Combined information for the German, French and the UK plans’ change in benefitobligation, change in plan assets, and reconciliation of funded status were asfollows:

| ** **                                         | ** ** | **Year Ended  December 31,** | ** ** |
|----------------------------------------------------|------------|----------------------------------------|------------|
| ** **                                         | ** ** | **2006**                               | ** ** | **2005** | ** ** |
| Change in benefit  obligation:                     |       |                                   |       |   |   |
| Benefit obligation—beginning of period        |       | $                                      | 88.9       |   | $ | 84.1 |   |
| Service cost                                       |       | 2.9                                    |       | 3.4 |   |
| Interest cost                                      |       | 4.3                                    |       | 4.0 |   |
| Plan participants’ contributions              |       | 0.4                                    |       | 0.5 |   |
| Actuarial loss                                     |       | 0.6                                    |       | 10.9 |   |
| Benefits paid                                      |       | (4.4                                   | )          | (3.8 | ) |
| Currency translation changes                       |       | 11.9                                   |       | (10.2 | ) |
| Benefit obligation—end of period              |       | 104.6                                  |       | 88.9 |   |
| Change in plan assets:                             |       |                                   |       |   |   |
| Fair value of plan assets—beginning of period |       | 58.8                                   |       | 55.5 |   |
| Actual gain on plan assets                         |       | 5.0                                    |       | 9.5 |   |
| Company contributions                              |       | 2.4                                    |       | 3.4 |   |
| Plan participants’ contributions              |       | 0.5                                    |       | 0.5 |   |
| Benefits paid                                      |       | (4.4                                   | )          | (3.8 | ) |
| Currency translation changes                       |       | 8.4                                    |       | (6.3 | ) |
| Fair value of plan assets—end of period       |       | 70.7                                   |       | 58.8 |   |
| Funded status                                      |       | $                                      | (33.9      | ) | $ | (30.1 | ) |

 

Amountsrecognized in the consolidated balance sheet were as follows:

| ** **                                          | ** ** | **December 31,** | ** ** |
|-----------------------------------------------------|------------|-----------------------|------------|
| ** **                                          | ** ** | **2006**              | ** ** | **2005** | ** ** |
| Other long-term  assets                             |       | $                     | —     |   | $ | 0.2 |   |
| Accrued expenses                                    |       | (0.9                  | )          | (1.6 | ) |
| Other long-term  liabilities                        |       | (33.0                 | )          | (24.8 | ) |
| Accumulated other  comprehensive income—pretax |       | 5.8                   |       | 2.0 |   |
|                                                     |            |                       |            |  |  |  |  |

                                                            

The amount in accumulated other comprehensive incomethat has not been recognized as net periodic pension cost at December 31,2006 relates to actuarial losses.

The combined accumulated benefit obligation was $97.4and $81.7 at December 31, 2006 and 2005, respectively.

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Combinednet periodic pension cost includes the following components:

| ** **                      | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|---------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                      | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                      | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                      | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Service cost                    |       | $                     | 2.9        |                    | $          | 3.4 |   |   | $ | 1.7 |   |   |   | $ | 0.1 |   |   |
| Interest cost                   |       | 4.3                   |       | 4.0                     |       |   | 1.0 |   |   |   | 0.3 |   |   |
| Expected return  on plan assets |       | (3.9                  | )          | (3.5                    | )          |   | (0.1 | ) |   |   | — |   |   |
| Recognized net  actuarial loss  |       | 0.3                   |       | 0.1                     |       |   | — |   |   |   | — |   |   |
| Net periodic  pension cost      |       | $                     | 3.6        |                    | $          | 4.0 |   |   | $ | 2.6 |   |   |   | $ | 0.4 |   |   |

 

Thecombined net periodic pension cost and the combined projected benefitobligation were based on the following weighted average assumptions:

| ** **                                                                                        | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** | ** **                |
|---------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|---------------------------|
| ** **                                                                                        | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** | ** ** |
| ** **                                                                                        | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,**         | ** ** | ** ** |
| ** **                                                                                        | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004**                  | ** ** | **2004** | ** ** | ** ** |
| Discount rate for  benefit obligation                                                             |       |                  | 4.83       | %                       |       |                      | 4.56 | % |   |   | 5.05 | % |   |   | 5.72 | % |   |   |
| Discount rate for  net periodic pension cost                                                      |       |                  | 4.57       | %                       |       |                      | 5.05 | % |   |   | 5.49 | % |   |   | 5.83 | % |   |   |
| Expected rate of  return on plan assets for net periodic pension cost (French and UK plans  only) |       |                  | 6.17       | %                       |       |                      | 6.58 | % |   |   | 6.49 | % |   |   | 3.50 | % |   |   |
| Assumed annual  rate of compensation increase for benefit obligation                              |       |                  | 3.37       | %                       |       |                      | 3.19 | % |   |   | 3.36 | % |   |   | 3.00 | % |   |   |
| Assumed annual rate of  compensation increase for net periodic pension cost                       |       |                  | 3.20       | %                       |       |                      | 3.36 | % |   |   | 3.54 | % |   |   | 3.00 | % |   |   |

 

The Company expects to make contributions to theFrench and UK plans of approximately $1.5 in 2007.

Thetable below shows the combined asset allocation target and the combined December 31,2006 and 2005 positions for each asset class:

| ** **        | ** ** | **Target at**    | ** ** | ** **            | ** ** | ** ** | ** ** |
|-------------------|------------|-----------------------|------------|-----------------------|------------|------------|------------|
| ** **        | ** ** | **December 31,** | ** ** | **December 31,** | ** ** |
| ** **        | ** ** | **2006**              | ** ** | **2006**              | ** ** | **2005**   | ** ** |
| Equity securities |       |                  | 67         | %                     |       |       | 68         | % |   |   | 67 | % |   |
| Debt securities   |       |                  | 33         | %                     |       |       | 32         | % |   |   | 33 | % |   |
|              |       |                  |       |                  |       |       | 100        | % |   |   | 100 | % |   |

 

80

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Thefollowing combined benefit payments, which reflect expected future service, asappropriate, are expected to be paid:

| 2007        |   | $    | 3.1    |   |
|-------------|--------|------|--------|--------|
| 2008        |   | 2.6  |   |
| 2009        |   | 2.7  |   |
| 2010        |   | 2.9  |   |
| 2011        |   | 3.6  |   |
| 2012 - 2016 |   | 19.9 |   |

 

***(e) Other Non-U.S. Postemployment Benefits***

Certain of VWR’s Europeansubsidiaries provide post employment benefits in the form of lump-sum cashpayments to employees when they leave VWR, regardless of their reason forleaving. VWR estimates and accrues a liability for these benefits. The largestsuch plans are in France and Italy. The combined liability recorded for theseplans was $1.5 and $1.6 at December 31, 2006 and 2005, respectively.

**(15)   Stock-BasedCompensation**

***(a) CDRV Investors, Inc.Stock Incentive Plan***

Shortly after theAcquisition, we adopted the CDRV Investors, Inc. Stock Incentive Plan (the“Stock Plan”). Under the Stock Plan, our board of directors may grant rights topurchase shares of our common stock, options to purchase shares of our commonstock, shares of our common stock, restricted stock units and other share-basedawards to any of our executive officers or other employees and to ourdirectors, who are not also our employees or associated with Clayton, Dubilier &Rice, Inc. (“CD&R” or “Outside Directors”). Options granted under theStock Plan to date have provided for vesting in equal annual installments oneach of the first five anniversaries of the grant date and expire ten yearsfrom the grant date. Restricted stock units granted under the Stock Planrepresent a future right to receive shares of our common stock. Awards grantedunder the Stock Plan would all vest earlier if the Company has a change incontrol or in certain other situations.

As of December 31,2006, there were 1,026,591 shares of our common stock authorized for all typesof awards under the Stock Plan. Based on shares issued, options outstanding andrestricted stock units granted under the Stock Plan as of December 31,2006, there are 126,632 of such authorized shares available for future awards.

***(b) Stock andOption Activities under the Stock Plan***

*2006Activities*

During the first quarterof 2006, our President and Chief Executive Officer purchased 19,643 sharesat $56.00 per share. The offer to purchase the shares was issued in the fourthquarter of 2005 when the fair market value was $75.00 per share.

During the second quarterof 2006, we offered 85 of our officers and employees the opportunity topurchase 40,166 shares at $75.00 per share when the fair market value was$107.00 per share. Accordingly, 

81

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

$1.3 wascharged to operations in the second quarter of 2006 for these purchase options,which were valued in accordance with the provisions of SFAS 123R. Fifty-one ofour officers and employees ultimately purchased 25,070 shares in the secondquarter of 2006. Coincident with these purchases, these officers and employeeswere to be granted two options, for each share purchased. These options wereinstead granted in the third quarter of 2006, as noted below. As a result ofthe delay in the issuance of the options, these officers and employees receiveda special bonus totaling $2.2 that was recorded as a compensation charge.

During the third quarterof 2006, our President and Chief Executive Officer purchased 4,201 sharesfor $119.00 per share. Coincident with this purchase, this executive wasgranted options to purchase 12,603 shares at an exercise price of $119.00 pershare. Also during the third quarter of 2006, we granted options to purchase49,140 shares at an exercise price of $119.00 per share to 50 of our officersand employees in connection with the second quarter of 2006 offering discussedabove.

In December 2006, weused the net proceeds from the sale of the Senior Floating Rate Notes to pay adistribution to the holders of our common stock. Under the terms of the StockPlan, this distribution required an adjustment to the exercise price or otherterms of all stock options outstanding under the Stock Plan to the extentnecessary or appropriate to reflect the distribution. Accordingly, the exerciseprice of all outstanding stock options was reduced, but, in consideration ofapplicable U.S. federal tax regulations, we were not able to sufficiently lowerthe exercise price of certain stock options. As a result, we made cash paymentsin the form of special payments of approximately $13.5 to certain holders ofvested and unvested stock options, to ensure that such holders maintained thesame rights and benefits under such options after the distribution as they hadbefore the distribution. Individual payments were equal to the difference, ifany, between the per share amount of the distribution and the amount by whichthe option exercise price would otherwise have been reduced. These paymentsconstitute a partial settlement of certain outstanding stock options and, inaccordance with the provisions of SFAS 123R, $1.4 of this payment was recordedas a compensation charge, which represents a portion of the unamortized grantdate fair value of the unvested options that was accelerated as of the date ofpayment. In addition, we also charged $12.1 of the payment to additionalpaid-in capital in accordance with SFAS 123R, since there was no incrementalvalue being provided in connection with the transaction.

Also during 2006, weissued 3,373 shares to Outside Directors for director compensation and issued25,660 shares at $50.52 per share in connection with the exercise of vestedstock options.

*2005 Activities*

During 2005, we offeredcertain of our officers and employees the opportunity to purchase shares of ourcommon stock for a purchase price equal to $56.00 per share, which was the fairmarket value of a share on the offer date. Eighteen of our officers andemployees, and one of our Outside Directors purchased a total of23,407 shares and were granted options to purchase 45,920 shares at $56.00per share. In connection with the acquisition of AI during 2005, discussed inNote 5(b), we issued 8,929 shares, as consideration (for value of $0.5), andgranted options to purchase 17,858 shares. Because the option exercise pricesequaled the fair market value per share of our common stock at the time ofgrants, under APB 25 no compensation expense related to these stock options isreflected in the Company’s 2005 income statement.

82

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

In November 2005, in connection with the hiringof our President and Chief Executive Officer, we offered this executive officerthe opportunity to purchase 35,714 shares of our common stock for a purchaseprice of $56.00 per share when the fair market value was $75.00 per share. As aresult of this discount we recorded a compensation charge of $0.7 using theintrinsic value guidance in APB 25.

Also during 2005, weissued 5,625 shares to Outside Directors for director compensation.

*2004 Activities*

Shortly after the Acquisition, we made an initialoffering of awards under the Stock Plan to certain of our officers andemployees. Such participants were offered the opportunity to purchase shares ofour common stock for a purchase price per share, which we believe was the fairmarket value of a share on the offer date and equal to the fair market value asof the acquisition date. As part of the offer, participants who elected topurchase a number of shares within the range of shares offered to them weregranted options under the Stock Plan to purchase two additional shares of ourcommon stock (certain of our named executive officers at that time were grantedoptions to purchase three shares for each share they purchased). All optionswere granted with an exercise price per share, which we believe was equal tothe fair market value of our common stock on the date of grant.

As part of this initial offering, Outside Directorswere offered the opportunity to purchase up to 2,500 shares of our commonstock. Such directors were not offered options.

We closed the initial offering in respect of 198 ofour officers and employees, and 4 of our directors. In the initial offering,these officers, employees, and directors purchased a total of239,835 shares and were granted options to purchase 485,990 shares underthe Stock Plan. Because the option exercise price equaled the fair market valueper share of our common stock at the time of grant, under APB 25 nocompensation expense related to the stock options is reflected in the Company’s2004 income statement.

In December 2004, we used the net proceeds fromthe sale of the Senior Discount Notes to pay a special dividend to the holdersof our common stock and the original exercise price of $100.00 per share foreach option was adjusted to $50.52 per share pursuant to the antidilutionprovision of the Stock Plan. As a result of the special dividend distribution,the Company recorded compensation expense of approximately $1.2.

Alsoduring 2004, we issued 1,382 shares to Outside Directors for directorcompensation.

***(c) Restricted Stock Unit Grants under the Stock Plan***

In 2005, we granted 21,333 restricted stock units witha total fair market value of $1.6 to certain of our officers and other keyexecutives that will vest in equal annual installments over a five-year period.The restricted units will vest earlier in certain circumstances if the Companyhas a change of control. The granting of these units was reflected in the December 31,2005 financial statements by increasing additional paid-in capital by $1.6 anda contra-equity account of unamortized value of restricted stock issued of$1.6. In accordance with the provisions of SFAS 123R, the unamortized value ofrestricted stock issued of $1.6 as of the adoption date of January 1, 2006was eliminated against additional paid-in capital. 

83

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

The unearned compensationis being recognized as compensation expense over the five-year vestingperiod of the restricted units granted. Compensation expense related to theserestricted stock units was $0.3 for the year ended December 31, 2006.

In2004, we granted 5,000 restricted stock units to one of our executive officersthat would have vested on the seventh anniversary of his commencement ofemployment with the Company. The granting of these units has been reflected inthe December 31, 2004 financial statements by increasing additionalpaid-in capital by $0.3 and a contra-equity account of unamortized value ofrestricted stock units issued of $0.3. The unearned compensation was beingamortized as compensation expense over the seven-year vesting period ofthe restricted stock units granted. As a result of this executive’s resignationin December 2005, the compensation expense previously recorded and the$0.3 increases to additional paid-in capital and the contra-equity account ofunamortized value of restricted stock issued have been reversed in the December 31,2005 financial statements.

***(d) Adoption of SFAS 123R***

As discussed in Note 2 (o) and (u), we adoptedSFAS 123R effective January 1, 2006.

The Company adopted SFAS 123R using the modifiedprospective transition method. Accordingly, compensation cost includes the costfor all options granted prior to, but not yet vested as of January 1, 2006and all prospective awards without restatement of prior periods. The impact ofadopting SFAS 123R, including the second quarter charge for the stock purchaseoptions of $1.3, the December charge of $1.4 discussed above andstock-based compensation associated with outstanding options of $1.9 for theyear ended December 31, 2006 was an increase to selling, general andadministrative expenses of $4.6, and a reduction to income tax provision of$1.8.

Hadcompensation expense for our stock options granted been determined based on thefair value at the grant date for awards under the plan, consistent with theprovisions of SFAS 123R, the Company’s net income would have approximated thepro-forma amounts indicated below:

| ** **                                                                                                     | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** |
|----------------------------------------------------------------------------------------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                                                                                                     | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** |
| ** **                                                                                                     | ** ** | **2005**              | ** ** | **2004**                | ** ** |
| Net income, as  reported                                                                                       |       |                  | $          | 21.5                    |       |   |   | $ | 31.1 |   |   |
| Add: stock-based  compensation expense in reported net income, net of tax                                      |       |                  | 0.5        |                    |       |   | — |   |   |
| Deduct:  stock-based compensation expense determined using fair value based method for  all awards, net of tax |       |                  | (1.4       | )                       |       |   | (0.3 | ) |   |
| Pro-forma net income                                                                                           |       |                  | $          | 20.6                    |       |   |   | $ | 30.8 |   |   |

 

84

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Thefair value of each option was estimated using the Black-Scholes option-pricingmodel. The weighted average fair value of options granted and the assumptionsused for each of the reporting periods are as follows:

| ** **                     | ** ** | ** **                                 | ** ** | ** **            | ** ** | **April 7 -** | ** ** |
|--------------------------------|------------|--------------------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                     | ** ** | **Year Ended December 31,** | ** ** | **December 31,** | ** ** |
| ** **                     | ** ** | **2006**                                   | ** ** | **2005**              | ** ** | **2004**                | ** ** |
| Fair value of  options granted |       | $                                          | 43.07      |                  | $          | 25.56                   |       |   | $ | 26.25 |   |   |
| Risk-free  interest rate       |       | 4.69                                       | %          | 4.11                  | %          |                    | 3.79       | % |   |
| Expected life of  options      |       | 6.5 years                                  |       | 6.5 years             |       |                    | 6.5 years  |   |   |
| Volatility                     |       | 34                                         | %          | 38                    | %          |                    | 20         | % |   |
| Expected dividend yield        |       | 0.0                                        | %          | 0.0                   | %          |                    | 0.0        | % |   |
|                                |            |                                            |            |                       |            |                         |            |  |  |  |  |  |

 

The risk-free interestrate is based on the U.S. treasury yield curve in effect at the time of grant,the expected life is calculated using the “simplified” method allowable underSEC Staff Accounting Bulletin No. 107, and volatility is estimated basedon historical peer group industry data.

We recognize compensationexpense for our stock options granted to our employees that contain pro-ratavesting, on a straight-line basis.

Informationregarding our stock options granted to our employees under the Stock Plan foreach of the reporting periods are as follows:

| ** **                                                  | ** ** | ** ** | ** ** | **Weighted** | ** ** |
|-------------------------------------------------------------|------------|------------|------------|--------------|------------|
| ** **                                                  | ** ** | **Number** | ** ** | **Average**  | ** ** |
| ** **                                                  | ** ** | **of**     | ** ** | **Exercise** | ** ** |
| ** **                                                  | ** ** | **Shares** | ** ** | **Price**    | ** ** |
| Outstanding at  April 7, 2004                          |       | —     |       |         | $          | — |   |   |
| Granted                                                     |       | 485,990    |       |         | 50.52      |   |   |
| Forfeited                                                   |       | (1,400     | )          |         | 50.52      |   |   |
| Outstanding at  December 31, 2004                      |       | 484,590    |       |         | 50.52      |   |   |
| Granted                                                     |       | 63,778     |       |         | 56.00      |   |   |
| Forfeited                                                   |       | (63,320    | )          |         | 50.52      |   |   |
| Canceled                                                    |       | (1,320     | )          |         | 50.52      |   |   |
| Outstanding at  December 31, 2005                      |       | 483,728    |       |         | 51.24      |   |   |
| Granted                                                     |       | 120,672    |       |         | 97.51      |   |   |
| Forfeited                                                   |       | (57,485    | )          |         | 51.58      |   |   |
| Canceled                                                    |       | (3,421     | )          |         | 52.17      |   |   |
| Exercised                                                   |       | (25,660    | )          |         | 50.52      |   |   |
| Outstanding prior  to distribution                          |       | 517,834    |       |         | 62.04      |   |   |
| Repricing due to  distribution (See Note 15(b))        |       |       |       |         |       |   |   |
| Canceled                                                    |       | (517,834   | )          |         | 62.04      |   |   |
| Granted                                                     |       | 456,591    |       |         | 24.66      |   |   |
| Granted                                                     |       | 61,243     |       |         | 59.64      |   |   |
| Forfeited                                                   |       | (2,100     | )          |         | 24.66      |   |   |
| Outstanding at  December 31, 2006                      |       | 515,734    |       |         | 28.81      |   |   |
| Vested and  expected to vest rest at December 31, 2006 |       | 487,079    |       |         | 28.70      |   |   |
| Exercisable at  December  31, 2006                     |       | 150,778    |       |         | 24.66      |   |   |

 

85

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

 

Cash received as a result of stock options exercisedwas $1.3 and the tax benefit realized was $0.1 for the year ended December 31,2006. Total intrinsic value related to stock options exercised was $0.7 for theyear ended December 31, 2006. No options were exercised prior to 2006.

Informationregarding unvested stock options for the year ended December 31, 2006 isas follows:

| ** **                                  | ** ** | ** ** | ** ** | **Weighted** | ** ** |
|---------------------------------------------|------------|------------|------------|--------------|------------|
| ** **                                  | ** ** | **Number** | ** ** | **Average**  | ** ** |
| ** **                                  | ** ** | **of**     | ** ** | **Fair**     | ** ** |
| ** **                                  | ** ** | **Shares** | ** ** | **Value**    | ** ** |
| Unvested options  at January 1, 2006   |       | 398,330    |       |         | $          | 17.18 |   |   |
| Granted                                     |       | 120,672    |       |         | 43.07      |   |   |
| Forfeited                                   |       | (59,585    | )          |         | 17.05      |   |   |
| Vested                                      |       | (94,461    | )          |         | 16.93      |   |   |
| Unvested options at  December 31, 2006 |       | 364,956    |       |         | 25.83      |   |   |

 

Thefollowing is a summary of outstanding stock options as of December 31,2006. The exercise prices below reflect the reduction that occurred as a resultof the distribution in December 2006, discussed in Note 15 (b).

| ** **          | ** ** | **Weighted**                                  | ** ** | ** **                   | ** ** | ** **                      | ** ** | ** **             | ** ** | ** **                      | ** ** |
|---------------------|------------|-----------------------------------------------|------------|------------------------------|------------|---------------------------------|------------|------------------------|------------|---------------------------------|------------|
| ** **          | ** ** | **Average**                                   | ** ** | **Options Outstanding** | ** ** | **Options Exercisable**    | ** ** |
| **Exercise  Price** | ** ** | **Remaining  Contractual  Life (Years)** | ** ** | **Number  of  Shares**       | ** ** | **Aggregate  Intrinsic  Value** | ** ** | **Number  of  Shares** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
|                | $          | 24.66                                         |       |                         |       | 8.0                             |       |                   | 454,491    |                            |       | $ | 33.6 |   |   | 150,778 |   |   | $ | 11.2 |   |   |
|                | 59.64      |                                          |       |                         | 9.5        |                            |       | 61,243                 |       |                            | 2.4        |   |   | — |   |   | — |   |   |
|                |       |                                          |       |                         |       |                            |       | 515,734                |       |                            | $          | 36.0 |   |   | 150,778 |   |   | $ | 11.2 |   |   |
|                     |            |                                               |            |                              |            |                                 |            |                        |            |                                 |            |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

As of December 31, 2006, the aggregate estimatedfuture compensation expense related to unvested options outstanding and theunamortized value of restricted stock units issued is $8.0. This expense willbe recognized over a weighted average period of 3.8 years.

It isthe Company’s policy to issue new shares upon share option exercises, and itexpects to issue new shares upon the settlement of restricted stock units.

***(e) Guaranteed Loans***

In connection with certain of the offerings discussedabove for participants who are not also executive officers, we arranged througha third-party financial institution to help these participants purchase theirshares. VWR has guaranteed an aggregate principal amount of $0.5 and $2.6 as ofDecember 31, 2006 and 2005, respectively, borrowed by individuals underthis arrangement. VWR would become liable for such amounts in the event that aparticipant would fail to repay the principal and interest when due. Theseloans mature on November 5, 2008 and bear interest at the one month LIBORplus 2.05%. In accordance with 

86

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

FASB Interpretation No. 45,*Guarantor’s**Accounting and Disclosure Requirements forGuarantees, Including Indirect Guarantees of Indebtedness of Others,*the Company has determined that the obligation for the fair value of theguarantee is immaterial. We recorded compensation expense and a correspondingincrease in paid-in-capital of $0.1, for the period April 7, 2004 to December 31,2004 for the favorable interest rate provided to individuals who have utilizedthe loan facility.

GivenVWR’s guarantee of the loan balances, we have considered the proceeds receivedfrom the sale of the our common stock to represent an obligation that may beredeemable upon the occurrence of an event that is not within our control inaccordance with Accounting Series Release No. 268 issued by the SEC.Therefore, to the extent the loans guaranteed by VWR are outstanding, we havepresented the balance that may become due under the guarantee outside ofstockholders’ equity. As loans are repaid by the employees, the amount classifiedoutside of stockholders’ equity is reclassified to additional paid-in capital.

**(16)   Commitmentsand Contingencies**

The Company leases office and warehouse space andcomputer equipment under operating leases, certain of which extend up to 15years, subject to renewal options. Rental expense is shown in the table below:

| ** **     | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|----------------|------------|-----------------------|------------|-------------------------|------------|
| ** **     | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **     | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **     | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Rental expense |       | $                     | 31.3       |                    | $          | 33.4 |   |   | $ | 24.9 |   |   |   | $ | 9.1 |   |   |
|                |            |                       |            |                         |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

Futureminimum lease payments as of December 31, 2006, under noncancelableoperating leases having initial lease terms of more than one year are asfollows:

| Years ended  December 31: |   |   |   |
|--------------------------------|--------|--------|--------|
| 2007                           |   | $      | 28.5   |   |
| 2008                           |   | 22.1   |   |
| 2009                           |   | 17.8   |   |
| 2010                           |   | 15.6   |   |
| 2011                           |   | 11.7   |   |
| Thereafter                     |   | 37.3   |   |
| Total minimum payments         |   | $      | 133.0  |   |

 

We are involved in variousenvironmental, contractual and product liability cases and claims which areconsidered routine to our business and from time to time the Company is namedas a defendant in cases as a result of our distribution of scientific supplies,including litigation resulting from the distribution of products containingasbestos by the Company and certain of its predecessors. While the impact ofthis litigation has typically been immaterial, there can be no assurance thatthe impact of the pending and any future claims will not be material to ourbusiness, financial condition and results of operations in the future.

87

 

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

During 2005, the German Federal Cartel Officeinitiated an investigation with regard to our European Distribution Agreementwith Merck KGaA. The purpose of the investigation is to determine whether thisagreement violates or otherwise infringes the general prohibition ofanti-competitive agreements under either German or EU rules. The Companysubmitted information to the German Federal Cartel Office in response to itsinitial request. In January 2007, the German Federal Cartel Officerequested additional information which we have recently provided. At thecurrent time, we cannot assess the likely outcome of the investigation orpotential economic impact associated with an adverse ruling. In connection withthe Acquisition, we recorded intangible assets related to our EuropeanDistribution Agreement with Merck KGaA. As of December 31, 2006, theunamortized net book value of these intangible assets is approximately  $23.6.

In March 2006,the Company was served with a complaint filed in the United States DistrictCourt, Western District of New York, by Corning Incorporated (“Corning”)alleging a breach of contract and unliquidated damages. In April 2006,Corning amended its complaint to allege trademark and unfair competition claims.In November 2006, the Court dismissed Corning’s breach of contract claim,but in March 2007, reconsidered its ruling and has now permitted Corningto proceed with the claim. In January 2007, the Company filedcounterclaims for breach of rebate obligation, unfair competition and tortiousinterference. The Company believes Corning’s claims are without merit and willvigorously defend itself on those claims and pursue its counterclaims.

** (17)**                     Transactionswith Related Parties (Merck KGaA was a Related Party Prior to the Acquisition)

***(a) Merck KGaA***

Merck KGaA (Merck KGaAand/or affiliates) and the Company have entered into various transactions andagreements in the ordinary course of business. Prior to the entering intoagreements with Merck KGaA, the Company and Merck KGaA conducted business witheach other in a manner that was not materially different than those describedbelow. In connection with the Acquisition, the Company entered into newagreements with Merck KGaA that are described below. The following summarizessignificant transactions between the Company and Merck KGaA:

*Sales to Merck KGaA*

The Company sells productsto Merck KGaA for which it is paid in the normal course of business.

*Purchases from Merck KGaA*

The Company purchases certain chemical products forresale from Merck KGaA for which it pays Merck KGaA in the normal course ofbusiness. The Company and Merck KGaA have entered into contracts that providefor the Company to be the distributor of certain Merck KGaA products in certaincountries. These two contracts for North American and European territoriesexpire on April 6, 2009 and may be extended for an additional five-yearterm subject to the occurrence of certain conditions.

In connection with theAcquisition, we also entered into other distribution agreements with MerckKGaA, including five-year distribution agreements with Merck KGaA to distributeits bioscience products in Europe and North America. In addition, we haveentered into a supply agreement with Merck KGaA, 

88

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

pursuantto which it agreed to continue to manufacture certain of our private labelproducts for a period of three years from April 7, 2004, and thereafter toprovide technical assistance in transitioning their manufacture to othermanufacturers. During 2005, this supply agreement was extended through December 31,2007.

*Logistics Services in Europe*

Under the terms of anagreement that expires on December 31, 2007, Merck KGaA continues toprovide logistics services to certain of our subsidiaries. Unless earlierterminated following a notice period, such logistics service agreements will beautomatically renewed for an additional three years.

*Systems/Technology Services*

Prior to the Acquisition,we and Merck KGaA had historically performed certain information technologyfunctions for each other. In order to maintain continuous and efficientoperations, effective as of April 7, 2004, we entered into an informationservices master agreement with Merck KGaA to maintain these relationshipsfollowing the Acquisition until such time as these services can be obtainedinternally or from other sources. We and Merck KGaA have continued to providecertain information technology services to each other consistent with thearrangements in place prior to the Acquisition, including Merck KGaA’soperation and support of the main enterprise resource planning and businesswarehouse software and databases for our European companies. The informationservices master agreement has an initial five-year term and will expire in April 2009,although individual services may be terminated during this term following anotice period.

*Other Services Provided by the Company and by MerckKGaA*

Certain subsidiaries of Merck KGaA and certain of oursubsidiaries have continued to lease or sublease from one another, or otherwiseshare, space in various offices and warehouses in Europe since the completionof the Acquisition. The terms of these leasing and subleasing arrangementsrange from less than one year to up to six or more years and are generally atmarket rents and conditions. Certain other existing contracts with Merck KGaAhave also remained in place since the Acquisition.

Thefollowing table summarized the transactions between VWR InternationalCorporation and Merck KGaA during the periods when VWR InternationalCorporation was a wholly-owned subsidiary of Merck KGaA:

| ** **                                                                                 | ** ** | **January 1-** | ** ** |
|--------------------------------------------------------------------------------------------|------------|---------------------|------------|
| ** **                                                                                 | ** ** | **April 6,**   | ** ** |
| ** **                                                                                 | ** ** | **2004**            | ** ** |
| Sales to Merck  KGaA, included in net sales                                                |       |                | $          | 8.4 |   |   |
| Purchases from  Merck KGaA, included in cost of goods sold and inventory                   |       |                | 80.7       |   |   |
| Services provided  by Merck KGaA, included in selling, general and administrative expenses |       |                | 3.3        |   |   |
| Services provided to  Merck KGaA, included in selling, general and administrative expenses |       |                | 1.5        |   |   |

 

89

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

MerckKGaA continues to be a significant supplier to the Company. Purchases fromMerck KGaA, included in cost of goods sold and inventory, were approximately$283.3 for the year ended December 31, 2006, $288.7 for the year ended December 31,2005 and $204.9 for the period April 7, 2004 to December 31, 2004.

***(b) Transactions with CD&R***

Underthe terms of a consulting agreement between the Company and CD&R dated April 7,2004 the Company paid CD&R $18.0 for transaction services rendered inconnection with the Acquisition. In addition, the consulting agreement includesan annual consulting fee of $1.5 for financial advisory and managementconsulting services and a provision that CD&R would be paid an additionalfee of $0.5 for any period CD&R provided the Company with an individual tobe our Chief Executive Officer. In accordance with this provision, we paid $0.3to CD&R in 2005. The consulting agreement terminates upon the earlier of (1) April 7,2014; (2) the date on which an investment fund managed by CD&R nolonger owns, directly or indirectly, any shares of common stock of the Companyor its successor company; or (3) upon thirty days written notice of eitherparty.

***(c) Services performed by Debevoise &Plimpton LLP***

TheCompany is provided legal services by Debevoise & Plimpton LLP. Asenior member of that law firm is related to an individual that was a former memberof our Board of Directors and a principal of CD&R. Total fees for servicesrendered during 2006, 2005 and 2004 were approximately $1.4, $0.3 and $7.4,respectively.

***(d) Services performed by SIRVA, Inc.***

The Company is provided with product transportationand relocation services by SIRVA, Inc. (“SIRVA”). Three members of theCompany’s Board of Directors are also members of SIRVA’s Board of Directors.SIRVA is a related party because certain funds managed by CD&R, includingClayton, Dubilier & Rice Fund VI Limited Partnership that ownsapproximately 70% of our outstanding common stock as of December 31, 2006,have equity interests in SIRVA. Total expenses incurred with SIRVA during 2006,2005 and 2004 were approximately $1.7, $1.7 and $1.0, respectively.

In December 2006,the Company and John Ballbach, our President and Chief Executive Officer,entered into an agreement, under which SIRVA would purchase Mr. Ballbach’sformer house at its current fair market value of $1.0. As of December 31,2006, the Company recorded an other current asset and an accrued expense of$1.0 to SIRVA under this agreement.

** (18)**                     Segmentand Geographical Financial Information

We report financial results on the basis of thefollowing three business segments: North American laboratory distribution (“NorthAmerican Lab”), European laboratory distribution (“European Lab”), and ScienceEducation. Asia Pacific operations are embedded within the North American Laband European Lab segments. Both the North American Lab and European Lab segmentsare comprised of the distribution of supplies to customers in majorpharmaceutical, biotechnology, chemical, technology, food 

90

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

processing and consumerproducts industries, as well as governmental agencies, universities andresearch institutes and environmental organizations. Science Education iscomprised of the manufacture and distribution of scientific supplies andspecialized kits principally to primary and secondary schools in North America.

The Company’s operating segments have been identifiedgiving consideration to both geographic areas and the nature of products amongbusinesses within its geographic area. North American Lab and European Lab areorganized as distinct operating segments primarily because of geographicdispersion and the inherent differences in business models. The North AmericanLab segment is highly standardized and operated as an integrated business,whereas the European Lab business is more fragmented and its customer marketsmore localized. The Science Education operating segment has been differentiatedfrom the North American Lab segment because of its unique and specializedproduct lines, concentration of customers in the educational sector and becauseit has higher gross margins. Operations within North America (excluding ScienceEducation) have been aggregated due to the similarity of economiccharacteristics, product lines, customers and distribution methods. Similarly,operations within the European Lab segment have been aggregated because ofcommon economic characteristics as well as the similarity among products,customers and distribution networks.

The Companyallocates its centralized management of corporate costs to its operatingsegments as follows:

·                    Corporatecosts are allocated to its North American Lab and Science Education operatingsegments using allocation factors that management considers reasonable todistribute costs on the basis of usage.

·                    Centralizedcosts related to the management of the European Lab operating segment areincurred within the segment structure and no inter-segment allocation isrequired.

91

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

Selectedbusiness segment financial information is presented below. Inter-segmentactivity has been eliminated. Therefore, revenues reported for each operatingsegment are substantially all from external customers.

| ** **                        | ** ** | **Successor**         | ** ** | **Predecessor**         | ** ** |
|-----------------------------------|------------|-----------------------|------------|-------------------------|------------|
| ** **                        | ** ** | **Year Ended**   | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                        | ** ** | **December 31,** | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                        | ** ** | **2006**              | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| **Net Sales**                     | ** ** | ** **            | ** ** | ** **              | ** ** |   | ** ** | ** ** |   |   | ** ** | ** ** |   |
| North American Lab                |       | $                     | 1,966.0    |                    | $          | 1,902.4 |   |   | $ | 1,350.7 | ** ** |   |   | $ | 486.5 |   |   |
| European Lab                      |       | 1,137.6               |       | 1,089.8                 |       |   | 752.3 | ** ** |   |   | 283.0 |   |   |
| Science Education                 |       | 154.0                 |       | 146.0                   |       |   | 109.2 | ** ** |   |   | 23.7 |   |   |
| Total                             |       | $                     | 3,257.6    |                    | $          | 3,138.2 |   |   | $ | 2,212.2 | ** ** |   |   | $ | 793.2 |   |   |
| **Operating Income**              |       |                  |       |                    |       |   |   | ** ** |   |   |   |   |   |
| North American Lab                |       | $                     | 112.2      |                    | $          | 91.0 |   |   | $ | 65.1 | ** ** |   |   | $ | 28.5 |   |   |
| European Lab                      |       | 59.4                  |       | 38.1                    |       |   | 24.1 | ** ** |   |   | 13.1 |   |   |
| Science Education                 |       | 19.4                  |       | 14.0                    |       |   | 14.7 | ** ** |   |   | (0.1 | ) |   |
| Total                             |       | $                     | 191.0      |                    | $          | 143.1 |   |   | $ | 103.9 | ** ** |   |   | $ | 41.5 |   |   |
| **Capital Expenditures**          |       |                  |       |                    |       |   |   | ** ** |   |   |   |   |   |
| North American Lab                |       | $                     | 15.7       |                    | $          | 10.8 |   |   | $ | 6.5 | ** ** |   |   | $ | 1.2 |   |   |
| European Lab                      |       | 5.8                   |       | 6.9                     |       |   | 6.2 | ** ** |   |   | 2.1 |   |   |
| Science Education                 |       | 2.1                   |       | 0.7                     |       |   | 0.4 | ** ** |   |   | — |   |   |
| Total                             |       | $                     | 23.6       |                    | $          | 18.4 |   |   | $ | 13.1 | ** ** |   |   | $ | 3.3 |   |   |
| **Depreciation and Amortization** |       |                  |       |                    |       |   |   | ** ** |   |   |   |   |   |
| North American Lab                |       | $                     | 22.5       |                    | $          | 19.8 |   |   | $ | 15.4 | ** ** |   |   | $ | 5.1 |   |   |
| European Lab                      |       | 17.3                  |       | 12.7                    |       |   | 9.3 | ** ** |   |   | 3.6 |   |   |
| Science Education                 |       | 1.6                   |       | 1.4                     |       |   | 1.1 | ** ** |   |   | 0.2 |   |   |
| Total                             |       | $                     | 41.4       |                    | $          | 33.9 |   |   | $ | 25.8 | ** ** |   |   | $ | 8.9 |   |   |

 

| ** **         | ** ** | **December 31,** | ** ** |
|--------------------|------------|-----------------------|------------|
| ** **         | ** ** | **2006**              | ** ** | **2005** | ** ** |
| **Assets**         | ** ** | ** **            | ** ** | ** ** | ** ** |
| North American Lab |       | $                     | 1,618.1    |   | $ | 1,676.9 |   |
| European Lab       |       | 833.2                 |       | 690.6 |   |
| Science Education  |       | 158.8                 |       | 165.9 |   |
| Total              |       | $                     | 2,610.1    |   | $ | 2,533.4 |   |

 

The following is a reconciliation of reportedoperating income by segment to income before income taxes and cumulative effectof a change in accounting principle:

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

| ** **                                                                            | ** ** | **Successor**             | ** ** | **Predecessor**         | ** ** |
|---------------------------------------------------------------------------------------|------------|---------------------------|------------|-------------------------|------------|
| ** **                                                                            | ** ** | **Year Ended ** | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **                                                                            | ** ** | **December 31,**     | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **                                                                            | ** ** | **2006**                  | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| Operating income, as  reported                                                        |       |                      |       |                    |       |   |   |   |   |   |   |   |   |
| North American  Lab                                                                   |       | $                         | 112.2      |                    | $          | 91.0 |   |   | $ | 65.1 |   |   |   | $ | 28.5 |   |   |
| European Lab                                                                          |       | 59.4                      |       | 38.1                    |       |   | 24.1 |   |   |   | 13.1 |   |   |
| Science Education                                                                     |       | 19.4                      |       | 14.0                    |       |   | 14.7 |   |   |   | (0.1 | ) |   |
| Total                                                                                 |       | 191.0                     |       | 143.1                   |       |   | 103.9 |   |   |   | 41.5 |   |   |
| Interest income                                                                       |       | (6.7                      | )          | (2.7                    | )          |   | (0.8 | ) |   |   | (0.2 | ) |   |
| Interest expense                                                                      |       | 117.1                     |       | 106.7                   |       |   | 52.7 |   |   |   | 5.8 |   |   |
| Other expense  (income), net                                                          |       | 1.5                       |       | (3.8                    | )          |   | (2.1 | ) |   |   | 0.1 |   |   |
| Income before income  taxes and cumulative effect of a change in accounting principle |       | $                         | 79.1       |                    | $          | 42.9 |   |   | $ | 54.1 |   |   |   | $ | 35.8 |   |   |

 

Netsales, long-lived assets and total assets by geographic area are as follows:

| ** **    | ** ** | **Successor**             | ** ** | **Predecessor**         | ** ** |
|---------------|------------|---------------------------|------------|-------------------------|------------|
| ** **    | ** ** | **Year Ended ** | ** ** | **April 7 -** | ** ** | **January 1 -** | ** ** |
| ** **    | ** ** | **December 31,**     | ** ** | **December 31,**   | ** ** | **April 6,** | ** ** |
| ** **    | ** ** | **2006**                  | ** ** | **2005**                | ** ** | **2004** | ** ** | **2004** | ** ** |
| **Net Sales** |       |                      |       |                    |       |   |   |   |   |   |   |   |   |
| United States |       | $                         | 1,871.7    |                    | $          | 1,813.1 |   |   | $ | 1,322.6 |   |   |   | $ | 456.5 |   |   |
| International |       | 1,385.9                   |       | 1,325.1                 |       |   | 889.6 |   |   |   | 336.7 |   |   |
| Total         |       | $                         | 3,257.6    |                    | $          | 3,138.2 |   |   | $ | 2,212.2 |   |   |   | $ | 793.2 |   |   |

 

| ** **            | ** ** | **December 31,** | ** ** |
|-----------------------|------------|-----------------------|------------|
| ** **            | ** ** | **2006**              | ** ** | **2005** | ** ** |
| **Long-lived Assets** |       |                  |       |   |   |
| United States         |       | $                     | 1,062.3    |   | $ | 1,072.0 |   |
| International         |       | 644.5                 |       | 612.7 |   |
| Total                 |       | $                     | 1,706.8    |   | $ | 1,684.7 |   |
| **Assets**            |       |                  |       |   |   |
| United States         |       | $                     | 1,506.2    |   | $ | 1,545.4 |   |
| International         |       | 1,103.9               |       | 988.0 |   |
| Total                 |       | $                     | 2,610.1    |   | $ | 2,533.4 |   |

 

93

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

 

** (19)**                     UnauditedQuarterly Financial Information

| ** **                                                                            | ** ** | **2006**  | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------|------------|
| ** **                                                                            | ** ** | **First** | ** ** | **Second** | ** ** | **Third** | ** ** | **Fourth(1)** | ** ** |
| Net sales                                                                             |       | $         | 795.8      |   | $ | 815.0 |   | $ | 817.6 |   |   | $ | 829.2 |   |   |
| Gross profit                                                                          |       | 214.4     |       | 219.1 |   | 223.6 |   |   | 226.2 |   |   |
| Operating  income(3)                                                                  |       | 46.1      |       | 45.5 |   | 54.7 |   |   | 44.7 |   |   |
| Interest expense,  net                                                                |       | 27.4      |       | 26.7 |   | 27.9 |   |   | 28.4 |   |   |
| Other expense  (income), net                                                          |       | 0.8       |       | (0.4 | ) | (0.1 | ) |   | 1.2 |   |   |
| Income before  income taxes and cumulative effect of a change in accounting principle |       | 17.9      |       | 19.2 |   | 26.9 |   |   | 15.1 |   |   |
| Net income                                                                            |       | 11.0      |       | 13.4 |   | 15.6 |   |   | 6.4 |   |   |
|                                                                                       |            |           |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

| ** **                                                                            | ** ** | **2005**  | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------|------------|
| ** **                                                                            | ** ** | **First** | ** ** | **Second** | ** ** | **Third** | ** ** | **Fourth(2)** | ** ** |
| Net sales                                                                             |       | $         | 754.1      |   | $ | 794.8 |   | $ | 812.0 |   |   | $ | 777.3 |   |   |
| Gross profit                                                                          |       | 192.7     |       | 200.8 |   | 209.6 |   |   | 200.6 |   |   |
| Operating income                                                                      |       | 25.0      |       | 32.8 |   | 47.3 |   |   | 38.0 |   |   |
| Interest expense,  net                                                                |       | 25.1      |       | 25.6 |   | 26.3 |   |   | 27.0 |   |   |
| Other expense  (income), net                                                          |       | (1.0      | )          | (0.8 | ) | (1.3 | ) |   | (0.7 | ) |   |
| Income before  income taxes and cumulative effect of a change in accounting principle |       | 0.9       |       | 8.0 |   | 22.3 |   |   | 11.7 |   |   |
| Cumulative effect  of a change in accounting principle                                |       | —    |       | — |   | — |   |   | (0.5 | ) |   |
| Net income                                                                            |       | 0.5       |       | 4.8 |   | 12.3 |   |   | 3.9 |   |   |
|                                                                                       |            |           |            |  |  |  |  |  |  |  |  |  |  |  |  |

 

----

(1)          Operating income in thefourth quarter of 2006 includes net charges of $5.8 primarily to correctaccounting errors related to the accounting for fixed assets as well as variousaccounting errors related to one of our European subsidiaries. Depreciationexpense and loss on disposal of assets were increased by $6.0 and $0.4,respectively, due to accounting errors related to fixed assets acquired as partof the Acquisition, and selling, general and administrative expense wasdecreased by $2.4 due to the inadvertent expensing of certain portable assetssince the Acquisition. Additionally, $1.7 of accounting errors related to oneof our foreign subsidiaries were identified and corrected in connection withthe conversion to a new accounting system during the fourth quarter of 2006,which resulted in increases to cost of goods sold; selling, general andadministrative expenses; and other expense (income), net of $0.9, $0.2, and$0.6, respectively.

The effect of the adjustments on the cumulativeresults of operations were charges of $2.4 for the period from the Acquisitionthrough December 31, 2005. The remaining charge of $3.4 would have(decreased)/increased the first, second and third quarter 2006 results by($2.3), ($3.1), and $2.0, respectively. Management does not believe the errorsare material to the current annual or previously reported annual and interimperiods.

Operating income in the fourth quarter of 2006 also includesa reduction in 2006 accrued bonuses of approximately $2.5 resulting from achange in accounting estimate.

94

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

(2)          Operatingincome in the fourth quarter of 2005 includes a reduction in 2005 accruedbonuses of approximately $4.1 and a charge of $1.7 to write-off deferred costsassociated with the termination of a customer contract by the Company duringthe quarter.

(3)          Operatingincome includes stock-based compensation expense related to our adoption ofSFAS 123R of $0.4, $1.8, $0.4 and $2.0 for the first, second, third and fourthquarters of 2006, respectively.

** (20)**                     CondensedConsolidating Financial Information

Holdings Corp was incorporated on November 22,2006 as a direct wholly owned subsidiary of CDRV. On December 6, 2006,Holdings Corp assumed the obligations under the Senior Discount Notes, andbecame the obligor on the Senior Discount Notes. CDRV has guaranteed the SeniorDiscount Notes on an unsecured senior subordinated basis. On December 14,2006, CDRV issued the Senior Floating Rate Notes and paid a dividend to itsstockholders in December 2006.

The following condensed consolidating financialinformation presents the balance sheet at December 31, 2006 and statementsof operations and cash flows for the year ended December 31, 2006 (exceptin the case of Holdings Corp, where the statements of operations and cash flowsare from its date of incorporation to December 31, 2006) of (1) CDRV,(2) Holdings Corp, the obligor on the Senior Discount Notes,(3) subsidiaries of the Company that are not guarantors (the“Non-Guarantor Subsidiaries”), (4) elimination entries necessary toconsolidate CDRV, Holdings Corp and the Non-Guarantor Subsidiaries, and(5) the Company on a consolidated basis.

**Condensed Consolidating Balance Sheet**
|                                                      | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                           | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| **Assets**                                           |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |
| Cash and cash equivalents                            |       | $          | 1.3        |         |       | $                 | —     |             |       |        | $          | 138.1 |   |   |   | $ | — |   |   | $ | 139.4 |   |
| Trade accounts receivable, net                       |       | —     |       |         | —     |              |       |             | 452.7      |        |       |   | — |   |   | 452.7 |   |
| Inventories                                          |       | —     |       |         | —     |              |       |             | 260.6      |        |       |   | — |   |   | 260.6 |   |
| Other current assets                                 |       | 17.1       |       |         | —     |              |       |             | 56.6       |        |       |   | (23.1 | ) |   | 50.6 |   |
| Total current assets                                 |       | 18.4       |       |         | —     |              |       |             | 908.0      |        |       |   | (23.1 | ) |   | 903.3 |   |
| Property and equipment, net                          |       | —     |       |         | —     |              |       |             | 156.9      |        |       |   | — |   |   | 156.9 |   |
| Goodwill                                             |       | —     |       |         | —     |              |       |             | 933.1      |        |       |   | — |   |   | 933.1 |   |
| Other intangible assets, net                         |       | —     |       |         | —     |              |       |             | 552.3      |        |       |   | — |   |   | 552.3 |   |
| Deferred income taxes                                |       | 5.1        |       |         | 0.8        |              |       |             | 7.2        |        |       |   | — |   |   | 13.1 |   |
| Investment in subsidiaries, net                      |       | 392.4      |       |         | 752.7      |              |       |             | —     |        |       |   | (1,145.1 | ) |   | — |   |
| Other assets                                         |       | 5.8        |       |         | 1.2        |              |       |             | 44.4       |        |       |   | — |   |   | 51.4 |   |
| Total assets                                         |       | $          | 421.7      |         |       | $                 | 754.7      |             |       |        | $          | 2,601.9 |   |   |   | $ | (1,168.2 | ) |   | $ | 2,610.1 |   |
| **Liabilities  and Stockholders’ Equity**       |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |
| Short-term debt                                      |       | $          | —     |         |       | $                 | —     |             |       |        | $          | 38.3 |   |   |   | $ | (16.5 | ) |   | $ | 21.8 |   |
| Accounts payable                                     |       | —     |       |         | —     |              |       |             | 380.8      |        |       |   | — |   |   | 380.8 |   |
| Accrued expenses                                     |       | 8.3        |       |         | —     |              |       |             | 169.1      |        |       |   | (6.6 | ) |   | 170.8 |   |
| Total current liabilities                            |       | 8.3        |       |         | —     |              |       |             | 588.2      |        |       |   | (23.1 | ) |   | 573.4 |   |
| Long-term debt                                       |       | 350.0      |       |         | 362.8      |              |       |             | 953.0      |        |       |   | — |   |   | 1,665.8 |   |
| Other long-term liabilities                          |       | —     |       |         | —     |              |       |             | 80.5       |        |       |   | — |   |   | 80.5 |   |
| Deferred income taxes                                |       | —     |       |         | —     |              |       |             | 227.0      |        |       |   | — |   |   | 227.0 |   |
| Total liabilities                                    |       | 358.3      |       |         | 362.8      |              |       |             | 1,848.7    |        |       |   | (23.1 | ) |   | 2,546.7 |   |
| Common stock purchase subject to guarantee agreement |       | 0.5        |       |         | —     |              |       |             | 0.5        |        |       |   | (0.5) |   |   | 0.5 |   |
| Stockholders’ equity                            |       | 62.9       |       |         | 391.9      |              |       |             | 752.7      |        |       |   | (1,144.6 | ) |   | 62.9 |   |
| Total liabilities and stockholders’ equity      |       | $          | 421.7      |         |       | $                 | 754.7      |             |       |        | $          | 2,601.9 |   |   |   | $ | (1,168.2 | ) |   | $ | 2,610.1 |   |

 

95

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**CDRV INVESTORS, INC. Notes to Consolidated Financial Statements  (Continued) December 31, 2006, 2005 and 2004 (Dollars in millions, except share data)**

**CondensedConsolidating Statement of Operations**
|                                                                           | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|---------------------------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                                                | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| Net sales                                                                 |       | $          | —     |         |       | $                 | —     |             |       |        | $          | 3,257.6 |   |   |   | $ | — |   |   | $ | 3,257.6 |   |
| Cost of goods  sold                                                       |       | —     |       |         | —     |              |       |             | 2,374.3    |        |       |   | — |   |   | 2,374.3 |   |
| Gross profit                                                              |       | —     |       |         | —     |              |       |             | 883.3      |        |       |   | — |   |   | 883.3 |   |
| Selling, general  and administrative   expenses                           |       | 0.1        |       |         | —     |              |       |             | 693.2      |        |       |   | — |   |   | 693.3 |   |
| Restructuring  credits                                                    |       | —     |       |         | —     |              |       |             | (1.0       | )           |       |   | — |   |   | (1.0 | ) |
| Operating (loss) income                                                   |       | (0.1       | )          |         | —     |              |       |             | 191.1      |        |       |   | — |   |   | 191.0 |   |
| Interest, net of  interest income                                         |       | 31.6       |       |         | 2.2        |              |       |             | 76.6       |        |       |   | — |   |   | 110.4 |   |
| Other expense,  net                                                       |       | —     |       |         | —     |              |       |             | 1.5        |        |       |   | — |   |   | 1.5 |   |
| (Loss) income before income taxes and equity in  earnings of subsidiaries |       | (31.7      | )          |         | (2.2       | )                 |       |             | 113.0      |        |       |   | — |   |   | 79.1 |   |
| Income tax  benefit (provision)                                           |       | 10.8       |       |         | 0.8        |              |       |             | (44.3      | )           |       |   | — |   |   | (32.7 | ) |
| Equity in earnings  of subsidiaries, net   of tax                         |       | 67.3       |       |         | 3.5        |              |       |             | —     |        |       |   | (70.8 | ) |   | — |   |
| Net income                                                                |       | $          | 46.4       |         |       | $                 | 2.1        |             |       |        | $          | 68.7 |   |   |   | $ | (70.8 | ) |   | $ | 46.4 |   |

 

**CondensedConsolidating Statement of Cash Flows**
|                                                                              | ** ** | ** ** | ** ** | **Holdings** | ** ** | **Non-Guarantor** | ** ** | ** **       | ** ** | **Total**   | ** ** |
|------------------------------------------------------------------------------|------------|------------|------------|--------------|------------|-------------------|------------|------------------|------------|-------------|------------|
| ** **                                                                   | ** ** | **CDRV**   | ** ** | **Corp**     | ** ** | **Subsidiaries**  | ** ** | **Eliminations** | ** ** | **Company** | ** ** |
| Net cash provided  by operating activities                                   |       | $          | 2.7        |         |       | $                 | —     |             |       |        | $          | 170.5 |   |   |   | $ | — |   |   |   | $ | 173.2 |   |   |
| Cash flows from  investing activities:                                       |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |   |   |
| Capital expenditures                                                         |       | —     |       |         | —     |              |       |             | (23.6      | )           |       |   | — |   |   |   | (23.6 | ) |   |
| Other investing activities, net                                              |       | —     |       |         | —     |              |       |             | (0.5       | )           |       |   | — |   |   |   | (0.5 | ) |   |
| Net cash used in investing activities                                        |       | —     |       |         | —     |              |       |             | (24.1      | )           |       |   | — |   |   |   | (24.1 | ) |   |
| Cash flows from  financing activities:                                       |       |       |       |         |       |              |       |             |       |        |       |   |   |   |   |   |   |   |   |
| Proceeds from debt                                                           |       | 350.0      |       |         | —     |              |       |             | 4.4        |        |       |   | — |   |   |   | 354.4 |   |   |
| Repayment of debt                                                            |       | —     |       |         | —     |              |       |             | (106.1     | )           |       |   | — |   |   |   | (106.1 | ) |   |
| Net change in bank checks outstanding                                        |       | —     |       |         | —     |              |       |             | (33.4      | )           |       |   | — |   |   |   | (33.4 | ) |   |
| Dividends paid                                                               |       | (343.5     | )          |         | —     |              |       |             | —     |        |       |   | — |   |   |   | (343.5 | ) |   |
| Other financing activities, net                                              |       | (7.9       | )          |         | —     |              |       |             | (2.6       | )           |       |   | — |   |   |   | (10.5 | ) |   |
| Net cash used in financing activities                                        |       | (1.4       | )          |         | —     |              |       |             | (137.7     | )           |       |   | — |   |   |   | (139.1 | ) |   |
| Effect of  exchange rate changes on cash                                     |       | —     |       |         | —     |              |       |             | 3.3        |        |       |   | — |   |   |   | 3.3 |   |   |
| Net increase in cash and cash equivalents           |       | 1.3        |       |         | —     |              |       |             | 12.0       |        |       |   | — |   |   |   | 13.3 |   |   |
| Cash and cash  equivalents beginning of period      |       | —     |       |         | —     |              |       |             | 126.1      |        |       |   | — |   |   |   | 126.1 |   |   |
| Cash and cash  equivalents end of period                                     |       | $          | 1.3        |         |       | $                 | —     |             |       |        | $          | 138.1 |   |   |   | $ | — |   |   |   | $ | 139.4 |   |   |

 

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**(21) Subsequent Events**

On March 12, 2007, we announced that investmentbanks Goldman Sachs & Co. and Banc of America Securities LLC have beenretained to explore strategic options for us.

During March 2007, weagreed to acquire the remaining 76% interest in KMF, an equity affiliate of theCompany, effective April 1, 2007. KMF is a German-based scientificlaboratory supply distribution firm that offers highly diversified chemicalsand consumable products to the laboratory industry in Germany. The purchaseprice, including the assumption of debt, is approximately $21.0 and will befunded from our operating cash flows.

**ITEM 9.**                CHANGESIN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

**ITEM 9A.**        CONTROLSAND PROCEDURES

*Management’s Evaluation of Disclosure Controls andProcedures*

The Company’s management,with the participation of the Company’s Chief Executive Officer and ChiefFinancial Officer, evaluated the effectiveness of the Company’s disclosurecontrols and procedures (as defined in Exchange Act Rules 13a-15(e) and15d-15(e)) as of December 31, 2006. Based on this evaluation, theCompany’s Chief Executive Officer and Chief Financial Officer concluded that,as of December 31, 2006, the Company’s disclosure controls and procedureswere effective in providing reasonable assurance that information required tobe disclosed by the Company in the reports that it files or submits under theExchange Act is recorded, processed, summarized, reported and accumulated andcommunicated to the Company’s management, including its Chief Executive Officerand Chief Financial Officer, as appropriate to allow timely decisions regardingrequired disclosure.

*Management’s Annual Report on Internal Control OverFinancial Reporting*

The Company’s management,including the Company’s Chief Executive Officer and Chief Financial Officer, isresponsible for establishing and maintaining adequate internal control overfinancial reporting (as defined in Exchange Act Rules 13a-15(f) and15d-15(f)) for the Company. Internal control over financial reporting isa process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. TheCompany’s management conducted an assessment of the effectiveness of theCompany’s internal control over financial reporting as of December 31,2006 based on criteria established in *InternalControl—Integrated Framework* issued by the Committee of SponsoringOrganizations of the Treadway Commission. Based on this assessment, the Company’smanagement concluded that, as of December 31, 2006, the Company’s internalcontrol over financial reporting was effective.

The Company’s independentregistered public accounting firm, KPMG LLP, has audited the effectiveness ofthe Company’s internal control over financial reporting and management’sassessment of the effectiveness of the Company’s internal control over financialreporting as of December 31, 2006, as stated in their report below.

*Changes in InternalControl over Financial Reporting*

There have been no changesin the Company’s internal control over financial reporting (as defined inExchange Act Rules 13a-15(f) and 15d-15(f) duringthe fiscal quarter ended December 31, 2006, that have materially affectedor are reasonably likely to materially affect the Company’s internal controlover financial reporting.

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*Report ofIndependent Registered Public Accounting Firm*

TheBoard of Directors and StockholdersCDRV Investors, Inc.:

We have audited management’s assessment, included inthe accompanying annual report oninternal control over financial reporting*,*thatCDRV Investors, Inc. and subsidiaries maintained effective internalcontrol over financial reporting as of December 31, 2006, based on criteria established in *Internal Control—Integrated Framework*issuedby the Committee of Sponsoring Organizations of the Treadway Commission (COSO)*.*CDRV Investors, Inc.’smanagement is responsible for maintaining effective internal control overfinancial reporting and for its assessment of the effectiveness of internalcontrol over financial reporting. Our responsibility is to express an opinionon management’s assessment and an opinion on the effectiveness of the Company’sinternal control over financial reporting based on our audit.

We conducted our audit in accordance with thestandards of the Public Company Accounting Oversight Board (United States).Those standards require that we plan and perform the audit to obtain reasonableassurance about whether effective internal control over financial reporting wasmaintained in all material respects. Our audit included obtaining anunderstanding of internal control over financial reporting, evaluatingmanagement’s assessment, testing and evaluating the design and operatingeffectiveness of internal control, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides areasonable basis for our opinion.

A company’s internal control over financial reportingis a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for externalpurposes in accordance with generally accepted accounting principles. A company’sinternal control over financial reporting includes those policies andprocedures that (1) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accountingprinciples, and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of thecompany; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorized acquisition, use, or disposition of thecompany’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controlover financial reporting may not prevent or detect misstatements. Also,projections of any evaluation of effectiveness to future periods are subject tothe risk that controls may become inadequate because of changes in conditions,or that the degree of compliance with the policies or procedures maydeteriorate.

Inour opinion, management’s assessment that CDRV Investors, Inc. maintainedeffective internal control over financial reporting as of December 31,2006, is fairly stated, in all material respects, based on criteria establishedin *Internal Control—Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission(COSO). Also, in our opinion, CDRV Investors, Inc. maintained, in allmaterial respects, effective internal control over financial reporting as of December 31,2006, based on criteria established in *Internal Control—IntegratedFramework* issued by the Committee of Sponsoring Organizations of theTreadway Commission (COSO).

We also have audited, in accordance with the standardsof the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of CDRVInvestors, Inc. and subsidiaries (Successor)as of December 31, 2006 and 2005, and the related consolidated statements of operations, stockholders’ equity andother comprehensive income, and cash flows for the years ended December 31,2006 and 2005 and for the period April 7, 2004 to December 31, 2004(Successor periods) and from January 1, 2004 to April 6, 2004(Predecessor period), and our report dated March 30, 2007**expressedan unqualified opinion on thoseconsolidated financial statements.

/s/ KPMG LLP

Philadelphia, PennsylvaniaMarch 30, 2007

**ITEM 9B.  OTHER INFORMATION**

None.

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**PART III**

**ITEM 10.**         DIRECTORS,EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

**Directors andExecutive Officers**

Thefollowing chart sets forth certain information regarding our directors andexecutive officers:

| **Name**                     | ** ** | ** ** | ** ** | **Age**                                                                                       | ** ** | **Position** | ** ** | ** ** |
|------------------------------|------------|------------|------------|-----------------------------------------------------------------------------------------------|------------|--------------|------------|------------|
| John M. Ballbach             |       | 46         |       | President, Chief  Executive Officer and Director                                              |       |         |
| Jack L. Wyszomierski         |       | 51         |       | Executive Vice President  and Chief Financial Officer                                         |       |         |
| Matthew Malenfant            |       | 45         |       | Senior Vice President  and President of North America, Lab Distribution and Services          |       |         |
| Manuel Brocke-Benz           |       | 48         |       | Senior Vice  President & Managing Director of Europe, Lab Distribution and  Services |       |         |
| George Van Kula              |       | 43         |       | Senior Vice President,  General Counsel and Secretary                                         |       |         |
| Charles F. Canfield          |       | 57         |       | Senior Vice President,  Human Resources                                                       |       |         |
| Theodore C. Pulkownik        |       | 49         |       | Senior Vice President,  Corporate Development, Asia/Pacific and Export                        |       |         |
| Kevin P. Leak                |       | 47         |       | Senior Vice President,  Category Management, Marketing and Supply Chain Management            |       |         |
| Jon Michael Colyer           |       | 33         |       | Vice President and  General Manager of Science Education                                      |       |         |
| Gregory L. Cowan             |       | 53         |       | Vice President and  Corporate Controller                                                      |       |         |
| B. Charles Ames              |       | 81         |       | Director                                                                                      |       |         |
| Charles A. Banks             |       | 66         |       | Chairman                                                                                      |       |         |
| Robert L. Barchi             |       | 60         |       | Director                                                                                      |       |         |
| Alan W. Dunton               |       | 52         |       | Director                                                                                      |       |         |
| Joseph F.  Eckroth, Jr. |       | 48         |       | Director                                                                                      |       |         |
| Lewis S. Edelheit            |       | 64         |       | Director                                                                                      |       |         |
| George K. Jaquette           |       | 32         |       | Director                                                                                      |       |         |
| Brian P. Kelley              |       | 46         |       | Director                                                                                      |       |         |
| Richard J. Schnall           |       | 37         |       | Director                                                                                      |       |         |
| Carl T. Stocker              |       | 63         |       | Director                                                                                      |       |         |
| Robert J. Zollars            |       | 49         |       | Director                                                                                      |       |         |

 

Each of our directors will hold office until our nextannual meeting or until a successor is elected or appointed. None of ourexecutive officers or directors has any familial relationship with any otherdirector or executive officer. “Familial relationship” for the purposes of thissection means any relationship by blood, marriage or adoption, not more remotethan first cousin.

*JohnM. Ballbach* is our President and Chief ExecutiveOfficer, as well as one of our directors, positions he has held since November 2005.Before joining us, Mr. Ballbach was a private investor since April 2004,and President of Ballbach Consulting LLC since June 2004. Prior to that,he was an officer of The Valspar Corporation, a global coatings and paintmanufacturer and distributor, and served as its President and Chief OperatingOfficer from 2002 until January 2004. From 2000 to 2002, Mr. Ballbachserved as the Senior Vice President of EPS, Color Corporation and Operations,of The Valspar Corporation. Mr. Ballbach joined the Valspar Corporation in1990 and had been its group Vice President, Packaging, since 1998. Mr. Ballbachholds a Bachelor of Arts from Georgetown College and a Masters of BusinessAdministration from the Harvard Business School.

*JackL. Wyszomierski*is our Executive Vice President andChief Financial Officer, a position he has held since June 2004. Prior tojoining us in 2004, Mr. Wyszomierski spent over 20 years atSchering-Plough 

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Corporation, a corporationthat develops and markets prescription drugs, animal health products,over-the-counter drugs and personal care products. Mr. Wyszomierski held avariety of positions at Schering-Plough, most recently serving as ExecutiveVice President and Chief Financial Officer from 1996 until 2003. Mr. Wyszomierskiis a member of the Board of Directors and the Chairman of the Audit Committeeof Exelixis, Inc. Mr. Wyszomierski holds a Bachelor of Science and aMasters of Science from Carnegie Mellon University.

*MatthewMalenfant* is our Senior Vice President, and Presidentof North America, Lab Distribution and Services, a position he has held since January 2006.Mr. Malenfant joined us in 1995 when we acquired Baxter International’sindustrial distribution business, which was the successor to American HospitalSupply Corporation. Prior to assuming his present position with us, Mr. Malenfantserved as our Senior Vice President of Sales for the Eastern Zone from 1997 to1999, as our Senior Vice President Marketing and Global Sourcing from 1999 to2004, as our Senior Vice President Global Marketing from 2004 to 2005, and asour Senior Vice President, Supplier Management and Services during 2005. Mr. Malenfantgraduated from Arizona State University in 1985 with a Bachelor of Arts inMarketing and a Bachelor of Science in Communication.

*ManuelBrocke-Benz*is our Senior Vice President &Managing Director of Europe, Lab Distribution and Services, a position he hasheld since January 2006. Mr. Brocke-Benz joined the company in 1987.Prior to assuming his present position, Mr. Brocke-Benz served as ourSenior Vice President and General Manager Continental Europe from 2003 to 2005and as our Corporate Senior Vice President Process Excellence from 2001 to2003. During the years 1996 to 2001 he served as General Manager Beneluxcountries, VP European Key Accounts, VP European Marketing and Corporate SeniorVP Global E-business. Mr. Brocke-Benz holds a law degree fromAlbert-Ludwigs University in Freiburg, Germany.

*GeorgeVan Kula* isour Senior Vice President, General Counsel and Secretary, a position he hasheld since May 2006. Prior to joining us in 2006, Mr. Van Kula workedfor Honeywell International Inc., where he spent approximately ten years andmost recently was Vice President and General Counsel, Europe, Middle East andAfrica, based in Brussels, Belgium. Prior to Honeywell, Mr. Van Kula beganhis legal career with Latham & Watkins in the Los Angeles and Londonoffices. Mr. Van Kula received his law degree from the University ofMichigan Law School and has a Bachelor of Arts degree from the University ofNotre Dame.

*CharlesF. Canfield*is our Senior Vice President, HumanResources, a position he has held since July 2004. Prior to joining us in2004, Mr. Canfield was the Senior Vice President, Human Resources andCommunications, of the Ondeo Nalco Company from 2001 until 2003. Before joiningOndeo Nalco, Mr. Canfield had a long tenure with Moore CorporationLimited, a company specializing in the manufacture of business forms. Mr. Canfieldbegan his career at Moore in 1973, most recently serving as the President ofMoore’s Canadian operating division from 1997 until 1998, and as Moore’s VicePresident, Corporate Human Resources and Communications, from 1988 until 1997and from 1998 until 2001. Mr. Canfield holds a Bachelor of Science fromCalifornia State University and a Masters of Business Administration from theUniversity of Toronto.

*TheodoreC. Pulkownik* is our Senior Vice President, CorporateDevelopment, Asia/Pacific and Export, a position he has held since July 2004.Prior to joining us in 2004, Mr. Pulkownik held two positions withStandard & Poors, which is a division of the McGraw-Hill Companies.From 2002 until 2004, Mr. Pulkownik was a Managing Director of Standard &Poors Corporate Value Consulting, and from 2000 to 2002, Mr. Pulkownik wasthe Senior Vice President, Business Development, for Standard & Poors.Before joining Standard & Poors, Mr. Pulkownik was a Senior VicePresident for Holberg Industries, a diversified private holding company locatedin Greenwich, Connecticut, from 1999 until 2000. From 1997 until 1999, Mr. Pulkownikwas a Managing Director, Corporate Business and Development, for GeneralElectric Capital Corporation. Prior to GE, Mr. Pulkownik spent five yearsat McKinsey and Co. and nine 

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years at Procter andGamble. Mr. Pulkownik holds a Bachelor of Business Administration from theUniversity of Wisconsin and a Masters of Business Administration from theUniversity of Michigan.

*KevinP. Leak* is our Senior Vice President, CategoryManagement, Marketing and Supply Chain Management, a position he has held sinceJanuary 2006. Mr. Leak joined us in 1995 when we acquired BaxterInternational’s industrial distribution business. Prior to assuming his currentposition, Mr. Leak served as our Vice President of Global StrategicSourcing & Supply Chain Management from 2004 to 2005, the NorthAmerica Vice President of Marketing from 2000 to 2004, and Vice President ofMarketing for our Production Supplies & Services business from 1998 to2000. Mr. Leak is a former United States Army officer where he held severalpositions in both command and staff. He is a graduate of Pace University with aBachelor of Business Administration in Management and Masters of BusinessAdministration in Marketing.

*JonMichael Colyer*is our Vice President and GeneralManager of Science Education, a position he has held since May 2005. Mr. Colyerjoined us in 2004 as our Vice President North American Call Centers. Prior tojoining us, Mr. Colyer worked for Textron, a large industrialconglomerate, as the Director for Enterprise Excellence and Director of BellHelicopter’s Composite Manufacturing facility. Prior to Textron, Mr. Colyerspent five years with GE in various roles including Six Sigma Black Belt,E-commerce Program Manager, and Leadership Development Program Member. Mr. Colyergraduated from the University at Buffalo in 1996 with a Bachelor of Science inCivil Engineering and Masters of Business Administration in Corporate Finance.

*GregoryL. Cowan*isour Vice President and Corporate Controller, a position he has held since December 2004.Prior to joining us, Mr. Cowan spent approximately five years atCDI Corporation in various senior financial positions and most recently asSenior Vice President and Chief Accounting Officer. Prior to CDI Corporation, Mr. Cowanwas Vice President of Internal Audit at Crown Cork and Seal Company Inc. forapproximately six years and a senior manager at PricewaterhouseCoopers LLC,where he served in various audit capacities for eleven years. Mr. Cowangraduated from Rutgers University with a degree in Accounting. Mr. Cowanis also a Certified Public Accountant.

*B.Charles Ames* is one of our directors, a position hehas held since the Acquisition. Mr. Ames is Vice Chairman and an operatingprincipal of CD&R. Prior to joining CD&R in 1987, Mr. Ames servedas Chairman and President and Chief Executive Officer of Reliance ElectricCompany, Chief Executive Officer of Acme Cleveland Corporation, and ChiefExecutive Officer and Chairman of The Uniroyal Goodrich Tire Company. Mr. Ames’family trust is a limited partner of CD&R Associates VI LimitedPartnership. Mr. Ames is a director and stockholder of CD&R InvestmentAssociates VI, Inc. He also serves on the Board of Directors of RemingtonArms Company, Inc. Mr. Ames holds a Ph.B. from Illinois Wesleyan Universityand a Masters of Business Administration from Harvard Business School.

*CharlesA. Banks*is our Chairman, a position he has held sinceDecember 2006. Mr. Banks is an operating principal at CD&R. Priorto joining CD&R, he served as Chief Executive Officer at Wolseley, theworld’s largest specialist trade distributor of plumbing and heating productsto professional contractors and a leading supplier of building materials inNorth America, UK and Continental Europe. He was appointed to the Board ofDirectors of Wolseley in 1992. Prior to Wolseley, Mr. Banks held a numberof executive positions at Ferguson Enterprises, a subsidiary of Wolseley and adistributor of plumbing supplies, pipes, valves and fittings and a distributorof heating and cooling equipment in the U.S. Mr. Banks is a member of theBoard of Directors of Bunzl plc, a worldwide distribution company, and ofTownebank Peninsula, formerly Harbor Bank. Mr. Banks also sits on theCollege of William and Mary Board of Visitors and is a member of the Board ofRegents, Harris Manchester College, Oxford University. He graduated from BrownUniversity, after which he spent two years in the U.S. Navy on active dutyattaining the rank of Lieutenant JG.

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*RobertL. Barchi*is one of our directors, a position he hasheld since May 2006. Dr. Barchi is currently the President of ThomasJefferson University. Prior to coming to Thomas Jefferson University, Dr. Barchiwas the Provost of the University of Pennsylvania, having spent much of hisprior academic career in the University of Pennsylvania’s School of Medicine.As the Provost and Chief Academic Officer, Dr. Barchi was responsible forthe oversight of University of Pennsylvania’s twelve schools and its researchenterprise, academic policies and student activities. Dr. Barchi is adirector of Covance, Inc., a trustee of Ursinus College, and serves on theeditorial boards and numerous journals in the field of neuroscience andneurology. Dr. Barchi received Bachelor and Master of Science degrees fromGeorgetown University, as well as a Doctor of Philosophy degree and a Doctor ofMedicine degree, both from the University of Pennsylvania.

*AlanW. Dunton*is one of our directors, a position he hasheld since May 2006. Dr. Dunton has served as the Chief ExecutiveOfficer and a director of Panacos Pharmaceuticals, Inc., a biotechnologycompany, since January 2007. He also has been a principal consultant withDanerius, LLC, a healthcare consulting company, since January 2006. During2006, Dr. Dunton served as the non-executive chairman of the Board ofDirectors at ActivBiotics, Inc., a privately held biopharmaceuticalcompany. Previously, he held executive positions as President and ChiefExecutive Officer of Metaphore Pharmaceuticals (from 2003 until 2005, when itmerged with ActivBiotics), a privately held pharmaceutical company thatdeveloped drugs for the treatment of pain, autoimmune disorders andinflammation, President and Chief Operating Officer of Emisphere Technologies, Inc.(from January through December 2002), and President and ManagingDirector of the Janssen Research Foundation, a Johnson & Johnsoncompany. Dr. Dunton is also a member of the Board of Directors of AdamsRespiratory Therapeutics, Inc., MediciNova, Inc. and Targacept, Inc.Dr. Dunton received his medical degree from the New York University Schoolof Medicine.

*JosephF. Eckroth, Jr.*is one of our directors, aposition he has held since November 9, 2004. Mr. Eckroth is theExecutive Vice President and Chief Operating Officer for New Century FinancialCorporation. Prior to joining New Century, Mr. Eckroth served as the ChiefInformation Officer for Mattel, Inc., a position he held from 2000 until2005. Prior to joining Mattel, Inc., Mr. Eckroth served as aninformation technology executive for the General Electric Company from 1996until 2000, where he was the Chief Information Officer for GE Medical Systemsand GE Industrial Systems business units. Prior to joining General Electric, Mr. Eckrothserved in a variety of senior leadership positions for the Northrop GrummanCorporation from 1985 until 1996, most recently as Director of InformationSystems and Technology. Mr. Eckroth holds a Bachelor of Science from theUniversity of La Verne and a Masters of Business Administration from PepperdineUniversity School of Business and Management.

*Dr. LewisS. Edelheit*is one of our directors, a position he hasheld since August 31, 2004. Dr. Edelheit retired from his position asthe Senior Vice President, Corporate Research and Development, for the GeneralElectric Company in 2001. Dr. Edelheit began his long tenure at GeneralElectric as a physicist in the General Electric Research and Development Centerin 1969, and returned to General Electric in 1991 to head its research anddevelopment efforts after a stint as the President and Chief Executive Officerof Quantum Medical Systems from 1986 until 1991. Dr. Edelheit is a memberof the National Academy of Engineering, and a Fellow of the American PhysicalSociety. Dr. Edelheit serves as a director of Sonic Innovations, Inc.and Hubspan, Inc. Dr. Edelheit holds a Bachelor of Science, a Mastersof Science and a Ph.D. from the University of Illinois.

*GeorgeK. Jaquettev*is one of our directors, a position he hasheld since December 2006. Mr. Jaquette is a professional employee ofCD&R. Prior to joining CD&R, Mr. Jaquette worked in the PrincipalInvestment Area and Investment Banking Division of Goldman, Sachs &Co. He also worked at K Capital Management, a multi-strategy investment firm.Mr. Jaquette holds a Bachelor of Science from Bucknell University andMasters of Business Administration from Harvard Business School.

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*BrianP. Kelley* is one of our directors, a position he hasheld since August 31, 2004. Mr. Kelley currently is the President andChief Executive Officer of SIRVA, Inc., a position he has held since 2002.He also currently serves as a director of SIRVA, Inc. Mr. Kelleyresigned in his capacity as an officer and director of SIRVA, Inc.effective April 1, 2007 to become President, Coca-Cola CompanyNon-Carbonated Beverages. Prior to joining SIRVA, Inc., Mr. Kelleywas an executive for the Ford Motor Company, serving as the President of Ford’sLincoln Mercury business from 2001 until 2002, and as Ford’s Vice President ofGlobal Consumer Services from 1999 until 2001. Prior to joining Ford, Mr. Kelleywas a senior executive for General Electric Company from 1994 until 1999. Mr. Kelleybegan his career at Procter & Gamble in 1983, where he was ultimatelyresponsible for some of the company’s most recognized brand names. Mr. Kelleyreceived a Bachelor of Arts in economics from The College of Holy Cross.

*RichardJ. Schnall*is one of our directors, a position he hasheld since the Acquisition. Mr. Schnall is a financial principal ofCD&R. Prior to joining CD&R in 1996, he worked in the InvestmentBanking division of Donaldson, Lufkin & Jenrette, Inc. and SmithBarney & Co. Mr. Schnall is a limited partner of CD&RAssociates VI Limited Partnership, and a director and stockholder of CD&RInvestment Associates VI, Inc. He serves as a director of SIRVA, Incand Sally Beauty Holdings. Mr. Schnall is a graduate of the Wharton Schoolof Business at the University of Pennsylvania and holds a Masters of BusinessAdministration from Harvard Business School.

*CarlT. Stocker* is one of our directors, a position he hasheld since August 31, 2004. Since 1997, Mr. Stocker has owned andmanaged his own acquisition, investment and consulting company, CTSEnterprises, LLC. Prior to that time, Mr. Stocker served as the chieffinancial executive of General Electric’s Industrial Systems business from 1990until 1996, and concurrently served as chief information technology executivefrom 1992 until 1996. Mr. Stocker was also a member of General Electric’sCorporate Finance and Information Technology Councils during these sameperiods, and served as the senior integration leader for the Space SystemsDivision created by General Electric’s acquisition and merger of RCA’s AeroSpace Group. Mr. Stocker is a director of SIRVA, Inc. Mr. Stockergraduated from Wright State University in 1970 after serving with the U.S.Army.

*Robert J. Zollars*isone of our directors, a position he has held since August 31, 2004. Since July 2006,he has served as the President and Chief Executive Officer and a director ofWound Care Solutions, LLC, a private equity backed business serving the chronicwound care segment of healthcare. From 1999 until March of 2006, Mr. Zollarswas the Chairman and CEO of Neoforma, Inc., a healthcare technologycompany focusing on the supply chain. Prior to joining Neoforma, Mr. Zollarswas the EVP and Group President of Cardinal Health, Inc., from 1997 until1999, and was responsible for five of their wholly-owned subsidiaries. From1992 until 1996, Mr. Zollars was the President of the Hospital Supply andScientific Product distribution business at Baxter International. Mr. Zollarsserves as a director of For Health Technologies and Diamond Foods. Mr. Zollarsis the Chairman of the Center for Services Leadership at Arizona StateUniversity, and is a member of the Young Presidents Organization. Mr. Zollarsis a graduate of Arizona State University and holds a Masters of BusinessAdministration from John F. Kennedy University.

**Composition of ourBoard of Directors**

Our business and affairsare managed under the direction of our board of directors. Our board iscomposed of twelve directors, none of whom, with the exception of Mr. Ballbach,are executive officers of our company.

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**Audit Committee**

Our audit committeecurrently consists of Alan W. Dunton,Dr. Lewis S. Edelheit, George K.Jaquette Richard J. Schnall, and Carl T. Stocker. Our board of directorshas determined that Carl T. Stocker is the current audit committee financialexpert serving on the audit committee for purposes of the Securities andExchange Act of 1934. Mr. Stocker is an independent director within themeaning of the Securities and Exchange Act of 1934. Our audit committee hasresponsibility for, among other things, assisting our board of directors inmonitoring:

·       thequality of our financial reporting and other internal control processes,

·       thequality and integrity of our financial statements,

·       theindependent auditors’ qualifications and independence,

·       theperformance of our internal audit function and independent auditors, and

·       our compliance with legaland regulatory requirements and our Code of Ethics and Conduct.

**Code of Ethics**

The Company has adoptedthe VWR International, Inc. Code of Ethics and Conduct (the “Code”), acode of ethics as defined under Regulation S-K promulgated under the SecuritiesAct of 1933, that applies to all of the Company’s employees including theCompany’s Chief Executive Officer, Chief Financial Officer, CorporateController and all professionals in finance and finance-related departments.This Code is available on the Company’s website at *www.vwr.com*on the About VWR portion of the site. The Company intends to satisfy itsdisclosure obligations under Item 10 of Form 8-K by postinginformation about amendments to, or waivers from, a provision of the Code thatapply to the Company’s Chief Executive Officer, Chief Financial Officer, andCorporate Controller on the Company’s website at the address above.

**ITEM 11.**         EXECUTIVE COMPENSATION

*CompensationDiscussion and Analysis*

**Overview**

We are the indirect parentcompany of VWR. We do not have our own employees, and the same individualsserve on both VWR’s and our Board of Directors (and committees thereof) andsenior management team. These individuals do not receive separate cash considerationfrom us. The Compensation Committee of VWR’s Board of Directors (the “Committee”)has overall responsibility for evaluating the compensation and benefit plansavailable to the executive officers and ensuring overall alignment to ourcompensation philosophy. The Compensation Committee of our Board of Directorsdoes not make separate compensation decisions from the Committee, except thatour Compensation Committee or our full Board of Directors must approve theinvestment opportunities and equity incentive compensation provided to theexecutive officers since these relate to investments in, or grants linked to,our common stock. In developing the executive officer compensation program, theCommittee works in consultation with an outside consulting firm and with theChief Executive Officer (other than with respect to his own compensation), andthen the recommendations are submitted to VWR’s and our Board of Directors forapproval.

**CompensationPhilosophy and Objectives**

We believe that the compensation program for theexecutive officers should primarily reward the achievement of specific annual,long-term and strategic goals by us, and align executive officers’ interests 

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with those of thestockholders by providing opportunities to share in the gains in equity value. Accordingly,a significant percentage of total annual compensation has been allocated toperformance-based cash incentives because these are directly linked to theachievement of our business objectives. In addition, all of the executiveofficers have purchased shares of our common stock and have received grants ofequity-based awards from us, thereby directly linking their interests withthose of our stockholders.

Wereview and evaluate both performance and compensation at least annually toensure that we maintain our ability to attract and retain highly qualifiedexecutive officers. As part of this evaluation process, we engage an outsideglobal human resources consulting firm to conduct an annual review of thecompensation program for all executive officers. This firm provides us withrelevant market data, including information regarding the compensation programsimplemented by a peer group of companies for comparison purposes. In connectionwith our 2006 review of the compensation program, we considered the followingpeer group of companies:

| Agilent  Technologies, Inc.            |   | Owens &  Minor, Inc. |
|---------------------------------------------|--------|------------------------------------|
| Amgen, Inc.                            |   | Patterson Companies Inc.           |
| Applied  Industrial Technologies, Inc. |   | PSS World Medical Inc.             |
| Becton  Dickinson & Co.            |   | Henry Schein, Inc                  |
| Cintas Corp.                                |   | Sigma-Aldrich Corp.                |
| Genentech, Inc.                        |   | Thermo Fisher Scientific Inc.      |
| Grainger (W.W.)  Inc.                       |   | Waters Corp.                       |
| Hospira Inc.                                |   | Wesco International                |
| Omnicare, Inc.                         |   |                               |

We believe that thesecompanies are an appropriate peer group for comparison purposes because theyhave business models similar to ours and/or they represent an appropriatecross-section of the industries in which we are engaged or serve (i.e., theyinclude companies in the biotech, distribution, medical instrument, medical supplyand pharmaceutical industries). We adjust the compensation informationconcerning these companies, as appropriate, to reflect the relative size ofeach company versus our size (in terms of annual revenues), so that a propercomparison of compensation programs can be made.

When setting total compensation for each of theexecutive officers, the Committee reviews tally sheets that reflect theexecutive officer’s current compensation, including incentive compensation. Wetarget base salaries at or near the median, or 50th percentile, of our peer group because webelieve this strategy is necessary to retain the executives or, when necessary,attract a new executive. We set performance-based cash incentive compensationat or near the 75th percentile of our peer group because webelieve that a substantial piece of the overall annual cash compensation shouldbe dependent on meeting or exceeding the annual performance targets related tokey business objectives for that year.

The discussion belowprimarily addresses the compensation of the individuals who served as our ChiefExecutive Officer and Chief Financial Officer during 2006, as well as the otherindividuals included in the Summary Compensation Table (collectively, the “namedexecutive officers”). However, the types of compensation and benefits providedto the named executive officers are similar to those provided to otherexecutive officers.

**Components ofCompensation**

For 2006, theprincipal components of compensation for the named executive officers were:

·       basesalary;

·       performance-basedcash incentive compensation;

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·       aspecial bonus payment and a retention bonus plan that was instituted as aresult of our December 2006 recapitalization;

·       investmentopportunities and equity incentive compensation;

·       retirementand other benefits; and

·       perquisites and otherpersonal benefits.

**Base Salary**

As is customary, weprovide a base salary to the named executive officers. In 2006, we reviewed thebase salaries of the named executive officers. During such review, we took intoaccount the following:

·       marketdata provided by our outside consulting firm;

·       theexecutive officer’s position and responsibilities;

·       internalreview of the executive officer’s compensation, both individually and relativeto other officers; and

·       individualperformance of the executive officer.

As aresult of such review, the Committee established the annualized base salariesof the named executive officers for 2006, in comparison to 2005, as follows:

| **Name**                         | ** ** | ** ** | ** ** | **Year** | ** ** | **Salary ($)** | ** ** |
|----------------------------------|------------|------------|------------|----------|------------|---------------------|------------|
| John M. Ballbach                 |       |       |       |     |       |
| Director, President and          |       | 2006       |       | $        | 650,000    |                |
| Chief Executive Officer(1)       |       | 2005       |       | 650,000  |       |
| Jack L.  Wyszomierski            |       |       |       |     |       |
| Executive Vice President and     |       | 2006       |       | 385,000  |       |
| Chief Financial Officer          |       | 2005       |       | 350,000  |       |
| George Van Kula                  |       |       |       |     |       |
| Senior Vice President,           |       | 2006       |       | 325,000  |       |
| General Counsel and Secretary(2) |       | 2005       |       | —   |       |
| Theodore C.  Pulkownik           |       |       |       |     |       |
| Senior Vice President,           |       |       |       |     |       |
| Corporate Development,           |       | 2006       |       | 280,008  |       |
| Asia/Pacific & Export   |       | 2005       |       | 250,000  |       |
| Charles F.  Canfield             |       |       |       |     |       |
| Senior Vice President,           |       | 2006       |       | 280,000  |       |
| Human Resources                  |       | 2005       |       | 250,000  |       |
|                                  |            |            |            |          |            |                     |            |  |

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(1)          Mr. Ballbach joinedus in his current position in November 2005.

(2)          Mr. Van Kula joinedus in his current position in May 2006.

At its February 2007meeting, the Committee approved the following annualized base salaries for thenamed executive officers, effective September 1, 2007:  Mr. Ballbach—$750,000;Mr. Wyszomierski - $415,800; Mr. Van Kula—$344,500;Mr. Pulkownik—$299,600; and Mr. Canfield—$288,400.

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**Performance-Based Cash IncentiveCompensation**

The Committee hasestablished an annual performance-based cash incentive compensation programreferred to as the Management Incentive Plan (the “MIP”). Under the MIP,performance targets, expressed as a percentage of base salary, are establishedfor the participants in February of each year. Payments under the MIP fora given year are then determined based on the achievement by us and theparticipants of predetermined performance measures.

For 2006, the named executiveofficers’ target bonuses under the 2006 MIP, expressed as percentages of theirrespective base salaries, were as follows:

| ** **            | ** ** | **% of Base** | ** ** |
|-----------------------|------------|-------------------------|------------|
| **Name**              | ** ** | ** **              | ** ** | **Salary** | ** ** |
| John M. Ballbach      |       |                    | 100        | % |   |
| Jack L. Wyszomierski  |       |                    | 85         | % |   |
| George Van Kula       |       |                    | 75         | % |   |
| Theodore C. Pulkownik |       |                    | 75         | % |   |
| Charles F.  Canfield  |       |                    | 75         | % |   |
|                       |            |                         |            |  |  |  |  |

For 2006, each namedexecutive officer’s cash bonus award was based upon achievement of thefollowing factors or criteria:

(1)         Aninternal performance-based metric similar to EBITDA, based on our operatingplan (“Internal EBITDA”). Internal EBITDA is a financial measure that is usedby our senior management to establish financial earnings targets in its annualoperating plan, and differs from the term “EBITDA” as it is commonly used andalso differs from “Credit Agreement EBITDA”. See “Item 7—Management’sDiscussion and Analysis of Financial Condition and Results of Operations—Indebtedness”for a discussion of Credit Agreement EBITDA. Internal EBITDA is generallycalculated as consolidated net income before consolidated net interest expense,consolidated income taxes, consolidated depreciation and amortization, andincludes adjustments for certain non-recurring items and the impacts resultingfrom changes in accounting principles. In addition, Internal EBITDA iscalculated using fixed foreign currency exchange rates, which generally areestablished as of the beginning of each year. In 2006, Internal EBITDAnecessary to achieve 100% of the potential payout attributable to this factorwas $245 million.

(2)         Variousworking capital metrics, including days sales outstanding in accountsreceivable, days sales in inventory and days payables outstanding.

(3)         Variousstrategic/cultural objectives, which include individual performance goals andour compliance efforts to address the requirements of Section 404 of theSarbanes-Oxley Act prior to the mandatory compliance date of December 31,2007.

In 2006, each of thesefactors accounted for 70%, 15% and 15%, respectively, of the total potentialMIP award, and we were required to achieve a minimum internal EBITDA of $207.7million in order for a payment to be made with respect to any factor.

Based on our performanceduring 2006, the named executive officers earned the annual incentive cashcompensation reflected in the column “Non-Equity Incentive Plan Compensation”of the Summary Compensation Table.

**SpecialBonus and Retention Bonus Plan**

In December 2006, weused the net proceeds from the sale of $350 million aggregate principal amountof our senior floating rate notes to pay a distribution to the holders of ourcommon stock. Under the terms 

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of theStock Plan, this distribution requires an adjustment to the exercise price orother terms of outstanding stock options to the extent necessary or appropriateto reflect the distribution. Accordingly, the exercise price of all stockoptions outstanding under the Stock Plan was reduced, but, in consideration ofapplicable U.S. federal tax regulations, we were not able to reduce theexercise price of certain stock options to reflect the distribution to the fullextent provided under the Stock Plan. As a result, we made cash payments ofapproximately $13.5 million to certain holders of vested and unvestedstock options, including certain of the named executive officers, to ensurethat such holders maintained the same rights and benefits under such optionsafter the distribution as they had before the distribution. Individual paymentswere equal to the difference, if any, between the per share amount of thedistribution and the amount by which the option exercise price would otherwisehave been reduced. The payments made to the named executive officers as aresult of the foregoing are reflected in the column “Bonus” of the SummaryCompensation Table.

In December 2006, wealso adopted a Retention Bonus Plan (the “Retention Bonus Plan”) for certainexecutive officers and other employees who hold restricted stock units. Underthe Retention Bonus Plan, an aggregate payment of approximately $1.3 million isto be paid to holders of restricted stock units as of the date of adoption ofthe Retention Bonus Plan, including Messrs. Ballbach and Wyszomierski, ininstallments over approximately five years (subject to vesting). Amounts earnedby these named executive officers related to the Retention Bonus Plan in 2006are reflected in the column “Non-Equity Incentive Plan Compensation” of theSummary Compensation Table. See “Potential Payments Upon Termination or Changeof Control” for information regarding acceleration of vesting of thesepayments.

**InvestmentOpportunities and Equity Incentive Compensation**

*Investment Opportunities and related Option Grantsunder Stock Incentive Plan*

Shortly after thecompletion of the Acquisition in April 2004, we adopted the Stock Plan, pursuantto which our Board of Directors may provide the executive officers or certainother key employees, including the named executive officers, with theopportunity to purchase shares of our common stock. In March 2006, Mr. Ballbachpurchased 19,643 shares at a purchase price of $56 per share, and in September 2006,he purchased 4,201 shares at a purchase price of $119 per share. In June 2006,Mr. Van Kula purchased 6,670 shares at a purchase price of $75 per share. Therewere no other purchases of shares by named executive officers in 2006.

For each share of our common stock purchased by aparticipant, we generally have granted such participant two options (threeoptions in the case of Mr. Ballbach) to purchase additional shares of ourcommon stock. The options granted to the named executive officers in 2006 areshown on the Grants of Plan-Based Awards Table. The options vest in equalinstallments over the first five years of the ten-year option term. See “PotentialPayments Upon Termination or Change of Control” for information regardingacceleration of vesting of stock options. Prior to the exercise of an option,the holder has no rights as a stockholder with respect to the shares subject tosuch option, including voting rights and the right to receive dividends ordividend equivalents. Although each executive officer is eligible to beprovided with an investment opportunity pursuant to the Stock Plan, any suchopportunity provided to any individual or the officers as a group is entirelyat the discretion of our Board of Directors.

*Restricted Stock Unit Grants under Stock Plan*

From time to time, ourBoard of Directors has granted to certain executive officers and other keyemployees, including certain of the named executive officers, restricted stockunits under the Stock Plan. No restricted stock units were granted to the namedexecutive officers in 2006. The restricted stock units represent a future rightto receive shares of our common stock. The restricted stock units vest in equalinstallments over the first five years following the grant date. See “PotentialPayments Upon Termination or Change of Control” for information regardingacceleration of vesting of restricted stock units. Prior to 

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theissuance of shares represented by the restricted stock units, the holder has norights as a stockholder with respect to such shares, including voting rightsand the right to receive dividends or dividend equivalents. Although eachexecutive officer is eligible to receive restricted stock units, the grantingof restricted stock units to any individual or the officers as a group isentirely at the discretion of our Board of Directors.

Webelieve that these investment opportunities and grants encourage the executiveofficers to focus on our short-term and long-term performance, thereby aligningtheir interests with the interests of our other stockholders. The investmentopportunities provide an opportunity for executive officers and certaindesignated key employees to increase their stake in us by putting their ownfinancial resources “at risk” based on our performance. In addition, by using amix of long-term stock option and restricted stock unit grants, the executiveofficers are encouraged to focus on sustained increases in our share value. Specifically,the granting of stock options and restricted stock units assists us to:

·       enhancethe link between the creation of stockholder value and long-term executiveincentive compensation;

·       providean opportunity for increased equity ownership by executives; and

·       maintain competitive levelsof total compensation.

**Retirementand Other Benefits**

*Defined Benefit Plan*

VWR sponsors a definedbenefit pension plan that was frozen on May 31, 2005. The pension plancovered substantially all of VWR’s full-time U.S. employees (except employeescovered by collective bargaining agreements who participate in independentlyoperated plans). Because the pension plan complies with ERISA and InternalRevenue Code maximum compensation and defined benefit limitations, certain ofthe annual retirement benefits will be paid pursuant to our SupplementalPension Plan. None of the named executive officers are entitled to benefitsunder these defined benefit plans. 

*Savings Plan*

VWR sponsors the VWRInternational, Inc. Retirement Savings 401(k) Plan (the “Savings Plan”),which is a tax-qualified retirement savings plan pursuant to which all U.S.based associates, including the named executive officers, are able tocontribute the lesser of up to 25% of their earnings or the limit prescribed bythe Internal Revenue Service to the Savings Plan on a before-tax basis. VWRwill match 100% of the first 4% of pay that is contributed to the Savings Plan,subject to earnings limitations under applicable federal income tax rules. Inaddition, VWR makes a supplemental contribution of up to 2% of pay to alleligible participants, including named executive officers, if we meet certaininternal performance measures. This supplemental contribution also is subjectto earnings limitations under applicable federal income tax rules. Allcontributions to the Savings Plan are fully-vested upon contribution. All ofthe named executive officers were eligible for benefits under the Savings Plan.

**Perquisitesand Other Personal Benefits**

The Committee periodicallyreviews the levels of perquisites and other personal benefits provided toexecutive officers. Currently, the perquisites and other benefits provided toexecutive officers primarily include annual automobile allowances, financialplanning assistance, relocation benefits under our relocation policy and, inthe case of Mr. Pulkownik, a housing allowance and commutingreimbursements. In connection with Mr. Ballbach’s relocation, in December 2006,we agreed to an amendment to the terms of his employment agreement to requireus to cause our provider of employee relocation services to purchase his formerhouse at its current fair market value of $970,000. We agreed with the providerthat the house would be resold and any difference in the resale price would beour responsibility. In recognition 

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of thedecrease in the fair market value of the house since his commencement ofemployment in November 2005, we also agreed to pay Mr. Ballbach aspecial one-time bonus of $92,500.

Attributed costs of thepersonal benefits described above for the named executive officers for 2006,are included in the column “All Other Compensation” of the SummaryCompensation Table.

**Tax and Accounting Considerations**

**Deductibilityof Executive Compensation**

We generally structure ourcompensation programs so that they are deductible for federal income taxpurposes.

**Accountingfor Stock-Based Compensation**

Beginning on January 1,2006, we began accounting for stock-based awards in accordance with therequirements of SFAS 123R, which requires companies to recognize in the incomestatement the grant date fair value of equity-based compensation issued toemployees. We previously accounted for these awards using the intrinsic valuemethod of APB 25. Under APB 25, we generally did not recognize compensationexpense for the options granted because the options had an exercise price equalto their fair value on the date of grant.

Executive compensationdisclosed in the Summary Compensation Table includes the full amount of thespecial bonus to the named executive officers in connection with ourdistribution in December 2006, which is more fully described under “SpecialBonus and Retention Bonus Plan” and Note 15 under “Item 8—Financial Statementsand Supplementary Data.” The full amount of the distribution to VWR’semployees, including the named executive officers, was $13.5 million of which$1.4 million was recorded as a compensation charge and $12.1 million wascharged to additional paid-in-capital.

*Compensation Committee Report*

The Compensation Committeeof our Board of Directors has reviewed and discussed the CompensationDiscussion and Analysis required by Item 402(b) of Regulation S-Kwith management and, based on such review and discussions, the committeerecommended to the full Board of Directors that the Compensation Discussion andAnalysis be included in this Form 10-K.

THE COMPENSATION COMMITTEE

B. Charles AmesCharles A. BanksRobert L. BarchiJoseph F. Eckroth, Jr.Brian P. KelleyRobert J. Zollars

*Compensation Committee Interlocks and InsiderParticipation*

The Compensation Committeeof our Board of Directors currently consists of B. Charles Ames, Charles A.Banks, Robert L. Barchi, Joseph F. Eckroth, Jr., Brian P. Kelley andRobert J. Zollars. Messrs. Ames and Banks are affiliated with CD&R(and various of its affiliates) and are not independent within the meaning ofthe Securities and Exchange Act of 1934. See “Item 13—Certain Relationships andRelated Transactions—Other Relationships” for certain relationships involving Messrs. Barchiand Kelley.

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***Summary Compensation Table***

Thetable below summarizes the total compensation paid or earned by each of thenamed executive officers for 2006.

| Name                         | ** ** | ** ** | ** ** | **Year** | ** ** | **Salary  ($)** | ** ** | **Bonus(2)  ($)** | ** ** | **Stock  Awards(3)  ($)** | ** ** | **Option  Awards(4)  ($)** | ** ** | **Non-Equity  Incentive  Plan  Compensation(5)  ($)** | ** ** | **Change in  Pension  Value and  Nonqualified  Deferred  Compensation  Earnings  ($)** | ** ** | **All Other  Compensation(6)  ($)** | ** ** | **Total  ($)** | ** ** |
|------------------------------|------------|------------|------------|----------|------------|-----------------|------------|-------------------|------------|---------------------------|------------|----------------------------|------------|-------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------|------------|------------------------------------------|------------|----------------|------------|
| John M. Ballbach             |       | 2006       |       | $        | 650,004    |            | $          | 1,651,191         |       | $                         | 100,000    |                       | $          | 360,224                                               |       |                                                                                             | $          | 548,096                                  |       |           |       | $ | — |   |   |   | $ | 173,476 |   |   | $ | 3,482,991 |   |
| Director, President and      |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Chief Executive Officer      |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Jack L. Wyszomierski         |       | 2006       |       | 379,180  |       | 670,000         |       | 49,180            |       | 61,084                    |       |                       | 272,202    |                                                  |       |                                                                                             | —     |                                     |       |           | 25,032     |   |   | 1,456,678 |   |
| Executive  Vice President    |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| and Chief  Financial Officer |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| George Van Kula(1)           |       | 2006       |       | 210,594  |       | 586,960         |       | —            |       | 253,766                   |       |                       | 114,665    |                                                  |       |                                                                                             | —     |                                     |       |           | 162,986    |   |   | 1,328,971 |   |
| Senior Vice President,       |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| General Counsel and          |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Secretary                    |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Theodore C. Pulkownik        |       | 2006       |       | 275,010  |       | 670,000         |       | —            |       | 61,084                    |       |                       | 148,886    |                                                  |       |                                                                                             | —     |                                     |       |           | 89,664     |   |   | 1,244,644 |   |
| Senior  Vice President of    |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Strategey,  Corporate        |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Development  and Emerging    |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Markets                      |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Charles F. Canfield          |       | 2006       |       | 275,010  |       | 435,500         |       | —            |       | 39,704                    |       |                       | 148,886    |                                                  |       |                                                                                             | —     |                                     |       |           | 38,903     |   |   | 938,003 |   |
| Senior Vice President,       |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
| Human Resources              |       |       |       |     |       |            |       |              |       |                      |       |                       |       |                                                  |       |                                                                                             |       |                                     |       |           |       |   |   |   |   |
|                              |            |            |            |          |            |                 |            |                   |            |                           |            |                            |            |                                                       |            |                                                                                                  |            |                                          |            |                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)             Mr. Van Kula joined us in his current position in May 2006.

(2)             This column represents the payments made in connectionwith the one-time payments made to holders of stock options described in theCompensation Discussion and Analysis under “Special Bonus and Retention BonusPlan” and, in the cases of Messrs. Ballbach and Van Kula, one-time bonuspayments relating to option grants, as described below.

In connection with Mr. Ballbach’s purchase ofshares in March 2006, he was granted 58,929 options with an exercise priceof $75 per share, which exceeded the exercise price of $56 per share includedin Mr. Ballbach’s October 2005 employment agreement. Accordingly, wepaid Mr. Ballbach a one-time bonus of $1,119,651, reflecting thisincreased exercise price.

Pursuant to his March 2006employment agreement, Mr. Van Kula was granted the right to purchase 6,670shares and the right to acquire two options at an exercise price of $75 pershare for each share that he purchased. He purchased 6,670 shares in June 2006.The related options were not granted until September 2006, and they weregranted at an exercise price of $119 per share, which was the per share fairvalue at the time of this grant. Accordingly, we paid Mr. Van Kula aone-time bonus of $586,960, reflecting this increased exercise price.

(3)             This column represents the compensation cost recognizedfor financial statement reporting purposes in 2006 for restricted stock unitsthat vested during 2006. The value of each unit was determined as of the grantdate.

(4)             This column represents the compensation cost recognizedfor financial statement reporting purposes in 2006 for the fair value of stockoptions granted to each of the named executive officers, in accordance withSFAS 123R. Pursuant to SEC rules, the amounts shown exclude the impact ofestimated forfeitures related to service-based vesting conditions. Theseamounts reflect our accounting expense for these awards and do not necessarilycorrespond to the actual value that may be recognized.

For accountingpurposes, Mr. Van Kula’s right to purchase 6,670 shares described innote (2) above was treated as an option. Accordingly, we recognizedcompensation cost of $217,242 related to this option in accordance withSFAS 123R, and this compensation cost is included in the total for Mr. VanKula.

(5)             This column represents amounts earned under the MIPand, in the cases of Messrs. Ballbach and Wyszomierski, amounts earnedunder the Retention Bonus Plan of $79,151 and $39,569, respectively.

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(6)             This column represents the attributedcosts to us of the perquisites and other personal benefits listed in the tablebelow. The partial tax gross up reflected in the table below relates to ourpayment of Mr. Ballbach’s portion of the FICA tax associated with hispurchase of shares in March 2006 (and described in the Option Exercisesand Stock Vested Table).

| ** **            | ** ** | **Relocation Benefits** | ** ** | **Financial**            | ** ** | **Annual**                         | ** ** | **Company  Contributions** | ** ** | ** **                    | ** ** | ** **               | ** ** |
|-----------------------|------------|------------------------------|------------|--------------------------|------------|------------------------------------|------------|----------------------------|------------|-------------------------------|------------|--------------------------|------------|
| **Name**              | ** ** | ** **                   | ** ** | **Relocation  Expenses** | ** ** | **Reimbursement—  Residence** | ** ** | **Housing  Allowance**     | ** ** | **Commuting  Reimbursements** | ** ** | **Planning  Assistance** | ** ** | **Automobile  Allowance** | ** ** | **to Savings  Plan** | ** ** | **Partial Tax  Gross Up** | ** ** | **Total** | ** ** |
| John M. Ballbach      |       | $                            | 36,752     |                     |       | $                                  | 92,500     |                       |       |                          | $          | —                   |       |   |   | $ | — |   |   |   | $ | 13,355 |   |   |   | $ | 14,032 |   |   |   | $ | 11,000 |   |   |   | $ | 5,837 |   |   | $ | 173,476 |   |
| Jack L. Wyszomierski  |       | —                       |       |                     | —     |                               |       |                       | —     |                          |       |                     | —     |   |   |   | — |   |   |   | 14,032 |   |   |   | 11,000 |   |   |   | — |   |   | 25,032 |   |
| George Van Kula       |       | 118,442                      |       |                     | —     |                               |       |                       | —     |                          |       |                     | —     |   |   |   | 24,470 |   |   |   | 9,074 |   |   |   | 11,000 |   |   |   | — |   |   | 162,986 |   |
| Theodore C. Pulkownik |       | —                       |       |                     | —     |                               |       |                       | 36,000     |                          |       |                     | 6,886      |   |   |   | 21,889 |   |   |   | 13,889 |   |   |   | 11,000 |   |   |   | — |   |   | 89,664 |   |
| Charles F.  Canfield  |       | —                       |       |                     | —     |                               |       |                       | —     |                          |       |                     | —     |   |   |   | 13,871 |   |   |   | 14,032 |   |   |   | 11,000 |   |   |   | — |   |   | 38,903 |   |
|                       |            |                              |            |                          |            |                                    |            |                            |            |                               |            |                          |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

*Grants ofPlan-Based Awards*

Thefollowing table provides information about equity and non-equity awards grantedto the named executive officers in 2006.

| ** **             | ** ** | ** ** | ** ** | **Estimated Future Payouts  Under Non-Equity  Incentive Plan Awards(1)** | ** ** | **Estimated Future Payouts  Under Equity  Incentive Plan Awards** | ** ** | **All Other  Stock  Awards:  Number of  Shares of  Stock or** | ** ** | **All Other  Option  Awards:  Number of  Securities  Underlying** | ** ** | **Exercise  or Base  Price of  Option** | ** ** | **Grant  Date Fair  Value of  Stock and  Option** | ** ** |
|------------------------|------------|------------|------------|---------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------------|------------|-----------------------------------------------------------------------------|------------|---------------------------------------------------|------------|------------------------------------------------------------------|------------|
| Name                   | ** ** | ** ** | ** ** | **Grant  Date**                                                                                   | ** ** | **Threshold  ($)**                                                                         | ** ** | **Target  ($)**                                                                   | ** ** | **Maximum  ($)**                                                            | ** ** | **Threshold  (#)**                                | ** ** | **Target  (#)**                                                  | ** ** | **Maximum  (#)** | ** ** | **Units  (#)** | ** ** | **Options  (#)** | ** ** | **Awards  ($/sh)** | ** ** | **Awards  ($)** | ** ** |
| John M. Ballbach       |       | 2/15/2006  |       | $                                                                                                 | —     |                                                                                       | $          | 650,004                                                                           |       | $                                                                           | 650,004    |                                              |       | —                                                           |       |   |   | — |   |   |   | — |   |   |   | — |   |   |   | — |   |   | $ | — |   | $ | — |   |
|                   |       | 12/7/2006  |       | 395,753                                                                                           |       | 395,753                                                                                    |       | 395,753                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   | — |   | — |   |
|                   |       | 3/10/2006  |       | —                                                                                            |       | —                                                                                     |       | —                                                                            |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | 58,929 |   |   | 75.00 |   | 1,980,604 |   |
|                   |       | 9/6/2006   |       | —                                                                                            |       | —                                                                                     |       | —                                                                            |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | 12,603 |   |   | 119.00 |   | 661,027 |   |
| Jack L.   Wyszomierski |       | 2/15/2006  |       | —                                                                                            |       | 322,303                                                                                    |       | 322,303                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   | — |   | — |   |
|                   |       | 12/7/2006  |       | 197,847                                                                                           |       | 197,847                                                                                    |       | 197,847                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   | — |   | — |   |
| George Van Kula(2)     |       | 5/8/2006   |       | —                                                                                            |       | 157,946                                                                                    |       | 157,946                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | 6,670 |   |   | 75.00 |   | 217,242 |   |
|                   |       | 9/29/2006  |       | —                                                                                            |       | —                                                                                     |       | —                                                                            |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | 13,340 |   |   | 119.00 |   | 693,947 |   |
| Theodore C. Pulkownik  |       | 2/15/2006  |       | —                                                                                            |       | 206,258                                                                                    |       | 206,258                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   | — |   | — |   |
| Charles F.  Canfield   |       | 2/15/2006  |       | —                                                                                            |       | 206,258                                                                                    |       | 206,258                                                                           |       |                                                                        | —     |                                              |       |                                                             | —     |   |   |   | — |   |   |   | — |   |   |   | — |   |   | — |   | — |   |
|                        |            |            |            |                                                                                                   |            |                                                                                            |            |                                                                                   |            |                                                                             |            |                                                   |            |                                                                  |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)             These columns represent (i) the potential paymentunder the MIP for 2006 performance, as set by the Committee on February 15,2006, and (ii) in the cases of Messrs. Ballbach and Wyszomierski, thetotal potential bonus relating to the grants made to them on December 7,2006 under the Retention Bonus Plan. The potential payments under the MIP areperformance-driven and are completely at risk. The criteria and factors and theMIP percentages of base salary are described in the Compensation Discussion andAnalysis under “Performance-Based Cash Incentive Compensation.” Mr. VanKula’s MIP amounts were pro-rated due to his May 8, 2006 employmentcommencement date.

(2)             Pursuant to Mr. Van Kula’s employmentagreement, he was granted the right to purchase 6,670 shares at $75 per share,which for accounting purposes was treated as an option, and is reflected in thetable as an option. The fair value per share at the time of this grant was$107.

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*Outstanding EquityAwards at Fiscal Year-end*

Thefollowing table provides information on the current holdings of stock optionsand restricted stock units by the named executive officers. This table includesunexercised vested and unvested stock options and unvested restricted stockunits. Each equity grant is shown separately for each named executive officer.Each equity grant vests and, in the case of stock options, becomes exercisable,ratably in five equal annual installments, beginning one year after the grantdate. The market value of the restricted stock units is based on the fair valueof our common stock as of December 31, 2006 (as determined by the CDRVInvestors Board of Directors), which was $98.64. Additional information aboutthe stock option and restricted stock unit grants is provided in theCompensation Discussion and Analysis under “Investment Opportunities and EquityIncentive Compensation.”

| ** **            | ** ** | **Option Awards** | ** ** | **Stock Awards**                                                              | ** ** |                                                                                 |
|-----------------------|------------|------------------------|------------|------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------|
| **Name**              | ** ** | ** **             | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Exercisable** | ** ** | **Number of  Securities  Underlying  Unexercised  Options  (#)  Unexercisable** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Securities  Underlying  Unexercised  Unearned  Options  (#)** | ** ** | **Option  Exercise  Price(1)  ($)** | ** ** | **Option  Expiration  Date** | ** ** | **Number of  Shares of  Units of  Stock That  Have Not  Vested  (#)** | ** ** | **Market  Value of  Shares or  Units of  Stock That  Have Not  Vested  ($)** | ** ** | **Equity  Incentive  Plan Awards:  Number of  Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  (#)** | ** ** | **Equity  Incentive  Plan Awards:  Market or  Payout Value  of Unearned  Shares,  Units or  Other Rights  That Have  Not Vested  ($)** | ** ** |   |
| John M. Ballbach      |       |                   | —     |                                                                               |       |                                                                                 | 58,929 |   |   |   | — |   |   | $ | 24.66 |   | 3/10/2016 |   |   | 5,334 |   |   | $ | 526,146 |   |   | — |   |   |   | — |   |   |
|                  |       |                   | —     |                                                                               |       |                                                                                 | 12,603 |   |   |   | — |   |   | 59.64 |   | 9/6/2016 |   |   |   |   |   |   |   |   | — |   |   |   | — |   |   |
| Jack L. Wyszomierski  |       |                   | 8,000      |                                                                               |       |                                                                                 | 12,000 |   |   |   | — |   |   | 24.66 |   | 9/30/2014 |   |   | 2,667 |   |   | 263,073 |   |   | — |   |   |   | — |   |   |
| George Van Kula       |       |                   | —     |                                                                               |       |                                                                                 | 13,340 |   |   |   | — |   |   | 59.64 |   | 6/27/2016 |   |   | — |   |   | — |   |   | — |   |   |   | — |   |   |
| Theodore C. Pulkownik |       |                   | 8,000      |                                                                               |       |                                                                                 | 12,000 |   |   |   | — |   |   | 24.66 |   | 9/30/2014 |   |   | — |   |   | — |   |   | — |   |   |   | — |   |   |
| Charles F.  Canfield  |       |                   | 5,200      |                                                                               |       |                                                                                 | 7,800 |   |   |   | — |   |   | 24.66 |   | 9/30/2014 |   |   | — |   |   | — |   |   | — |   |   |   | — |   |   |
|                       |            |                        |            |                                                                                    |            |                                                                                      |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)             These exercise prices reflect thereductions to the exercise prices of outstanding stock options as a result ofthe December 2006 distribution to our common stock holders described inthe Compensation Discussion and Analysis under “Special Bonus and RetentionBonus Plan.”

*Option Exercises and Stock Vested*
|                       | ** ** | **Option Awards** | ** ** | **Stock Awards**                                           | ** ** |
|-----------------------|------------|------------------------|------------|-----------------------------------------------------------------|------------|
| **Name**              | ** ** | ** **             | ** ** | **Number of  Shares Acquired  on Exercise  (#)** | ** ** | **Value Realized  Upon Exercise  ($)** | ** ** | **Number of  Shares Acquired  on Vesting  (#)** | ** ** | **Value Realized  on Vesting  ($)** | ** ** |
| John M. Ballbach(1)   |       |                   | 19,643     |                                                            |       |   | $ | 373,217 |   |   |   | $ | — |   |   |   | $ | — |   |   |
|                  |       |                   | 4,201      |                                                            |       |   | — |   |   |   | — |   |   |   | — |   |   |
| Jack L. Wyszomierski  |       |                   | —     |                                                            |       |   | — |   |   |   | — |   |   |   | — |   |   |
| George Van Kula(2)    |       |                   | 6,670      |                                                            |       |   | 213,440 |   |   |   | — |   |   |   | — |   |   |
| Theodore C. Pulkownik |       |                   | —     |                                                            |       |   | — |   |   |   | — |   |   |   | — |   |   |
| Charles F.  Canfield  |       |                   | —     |                                                            |       |   | — |   |   |   | — |   |   |   | — |   |   |
|                       |            |                        |            |                                                                 |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)           Pursuant to his employment agreement, Mr. Ballbachwas granted the right to purchase shares at $56 per share. Prior to hispurchase of shares pursuant to this right, Mr. Ballbach’s employmentagreement was amended to require any purchases after March 15, 2006 to bemade at a per share purchase price equal to fair value on the purchase date. OnMarch 10, 2006, he purchased 19,643 shares when the fair value per sharewas $75. In September 2006, Mr. Ballbach purchased 4,201 shares at apurchase price equal to the fair value per share. For accounting purposes, hisright to purchase these shares is considered an option, and his purchases arereflected as exercises in the table.

(2)           Pursuant to his employment agreement, Mr. Van Kulawas granted the right to purchase 6,670 shares at $75 per share. InJune 2006, he purchased 6,670 shares when the fair value per share was$107. For accounting purposes, his right to purchase these shares is consideredan option, and his purchase is reflected as an exercise in the table.

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*Potential PaymentsUpon Termination or Change of Control*

The following tables showpotential payments to each of the named executive officers under existingcontracts, agreements, plans or arrangements, whether written or unwritten, forvarious scenarios involving a change in control of us or a termination ofemployment of such officer, assuming a December 31, 2006 effective date ofsuch change of control or termination.

**JOHNBALLBACH**

| **Executive Payments  upon Termination**   | ** ** | ** ** | ** ** | **Voluntary  Termination** | ** ** | **Early  Retirement** | ** ** | **Normal  Retirement** | ** ** | **Involuntary  not for Cause  Termination** | ** ** | **Involuntary  for Cause  Termination** | ** ** | **Change in  Control** | ** ** | **Death** | ** ** | **Disability** | ** ** |
|------------------------------------------------------|------------|------------|------------|----------------------------|------------|-----------------------|------------|------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------|------------|-----------------------------|------------|-----------|------------|----------------|------------|
| Severance Payments(1)                                |       |       | $          | —                     |       |                  |       | $                      | —     |                                                  |       |                                         | $          | —                      |       |      |       | $              | 975,000    |   |   |   | $ | — |   |   | $ | — |   | $ | — |   | $ | — |   |
| Stock Options (unvested and accelerated)(2)          |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   | 4,851,084 |   | 4,851,084 |   | 4,851,084 |   |
| Restricted Stock Units (unvested and accelerated)(3) |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   | 526,146 |   | 526,146 |   | 526,146 |   |
| Retention Bonus  Plan Compensation(4)                |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   | 316,602 |   | 316,602 |   | 316,602 |   |
|                                                      |            |            |            |                            |            |                       |            |                        |            |                                                       |            |                                              |            |                             |            |           |            |                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

**JACKWYSZOMIERSKI**

| **Executive Payments  upon Termination**   | ** ** | ** ** | ** ** | **Voluntary  Termination** | ** ** | **Early  Retirement** | ** ** | **Normal  Retirement** | ** ** | **Involuntary  not for Cause  Termination** | ** ** | **Involuntary  for Cause  Termination** | ** ** | **Change in  Control** | ** ** | **Death** | ** ** | **Disability** | ** ** |
|------------------------------------------------------|------------|------------|------------|----------------------------|------------|-----------------------|------------|------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------|------------|-----------------------------|------------|-----------|------------|----------------|------------|
| Severance Payments(1)                                |       |       | $          | —                     |       |                  |       | $                      | —     |                                                  |       |                                         | $          | —                      |       |      |       | $              | —     |   |   |   | $ | — |   |   |   | $ | — |   |   | $ | — |   | $ | — |   |
| Stock Options (unvested and accelerated)(2)          |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | 887,760 |   |   | 887,760 |   | 887,760 |   |
| Restricted Stock Units (unvested and accelerated)(3) |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | 263,073 |   |   | 263,073 |   | 263,073 |   |
| Retention Bonus  Plan Compensation(4)                |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | 158,278 |   |   | 158,278 |   | 158,278 |   |
|                                                      |            |            |            |                            |            |                       |            |                        |            |                                                       |            |                                              |            |                             |            |           |            |                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

**GEORGEVAN KULA**

| **Executive Payments  upon Termination**   | ** ** | ** ** | ** ** | **Voluntary  Termination** | ** ** | **Early  Retirement** | ** ** | **Normal  Retirement** | ** ** | **Involuntary  not for Cause  Termination** | ** ** | **Involuntary  for Cause  Termination** | ** ** | **Change in  Control** | ** ** | **Death** | ** ** | **Disability** | ** ** |
|------------------------------------------------------|------------|------------|------------|----------------------------|------------|-----------------------|------------|------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------|------------|-----------------------------|------------|-----------|------------|----------------|------------|
| Severance Payments(1)                                |       |       | $          | —                     |       |                  |       | $                      | —     |                                                  |       |                                         | $          | —                      |       |      |       | $              | 325,000    |   |   |   | $ | — |   |   |   | $ | — |   |   | $ | — |   | $ | — |   |
| Stock Options (unvested and accelerated)(2)          |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | 520,260 |   |   | 520,260 |   | 520,260 |   |
| Restricted Stock Units (unvested and accelerated)(3) |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | — |   |   | — |   | — |   |
| Retention Bonus  Plan Compensation(4)                |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | — |   |   | — |   | — |   |
|                                                      |            |            |            |                            |            |                       |            |                        |            |                                                       |            |                                              |            |                             |            |           |            |                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

**THEODOREPULKOWNIK**

| **Executive Payments  upon Termination**   | ** ** | ** ** | ** ** | **Voluntary  Termination** | ** ** | **Early  Retirement** | ** ** | **Normal  Retirement** | ** ** | **Involuntary  not for Cause  Termination** | ** ** | **Involuntary  for Cause  Termination** | ** ** | **Change in  Control** | ** ** | **Death** | ** ** | **Disability** | ** ** |
|------------------------------------------------------|------------|------------|------------|----------------------------|------------|-----------------------|------------|------------------------|------------|-------------------------------------------------------|------------|----------------------------------------------|------------|-----------------------------|------------|-----------|------------|----------------|------------|
| Severance Payments(1)                                |       |       | $          | —                     |       |                  |       | $                      | —     |                                                  |       |                                         | $          | —                      |       |      |       | $              | —     |   |   |   | $ | — |   |   |   | $ | — |   |   | $ | — |   | $ | — |   |
| Stock Options (unvested and accelerated)(2)          |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | 887,760 |   |   | 887,760 |   | 887,760 |   |
| Restricted Stock Units (unvested and accelerated)(3) |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | — |   |   | — |   | — |   |
| Retention Bonus  Plan Compensation(4)                |       |       | —     |                       |       |                  | —     |                   |       |                                                  | —     |                                         |       |                        | —     |      |       |           | —     |   |   |   | — |   |   | — |   | — |   |
|                                                      |            |            |            |                            |            |                       |            |                        |            |                                                       |            |                                              |            |                             |            |           |            |                |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

 

114

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**CHARLESCANFIELD**

| ** **                                           | ** ** | ** **    | ** ** | ** **      | ** ** | ** **     | ** ** | **Involuntary**             | ** ** | **Involuntary**    | ** ** | **Change**      | ** ** | ** **  | ** ** | ** ** | ** ** |
|------------------------------------------------------|------------|---------------|------------|-----------------|------------|----------------|------------|-----------------------------|------------|--------------------|------------|-----------------|------------|-------------|------------|------------|------------|
| **Executive Payments**                          | ** ** | **Voluntary** | ** ** | **Early**       | ** ** | **Normal**     | ** ** | **not for Cause** | ** ** | **for Cause** | ** ** | **in**          | ** ** | ** **  | ** ** | ** ** | ** ** |
| **upon Termination**                            | ** ** | ** **    | ** ** | **Termination** | ** ** | **Retirement** | ** ** | **Retirement**              | ** ** | **Termination**    | ** ** | **Termination** | ** ** | **Control** | ** ** | **Death**  | ** ** | **Disability** | ** ** |
| Severance Payments(1)                                |       |          | $          | —          |       |           |       | $                           | —     |               |       |            | $          | —      |       |       |       | $ | — |   |   |   | $ | — |   |   | $ | — |   | $ | — |   | $ | — |   |
| Stock Options (unvested and accelerated)(2)          |       |          | —     |            |       |           | —     |                        |       |               | —     |            |       |        | —     |       |       |   | — |   |   | 577,044 |   | 577,044 |   | 577,044 |   |
| Restricted Stock Units (unvested and accelerated)(3) |       |          | —     |            |       |           | —     |                        |       |               | —     |            |       |        | —     |       |       |   | — |   |   | — |   | — |   | — |   |
| Retention Bonus  Plan Compensation(4)                |       |          | —     |            |       |           | —     |                        |       |               | —     |            |       |        | —     |       |       |   | — |   |   | — |   | — |   | — |   |
|                                                      |            |               |            |                 |            |                |            |                             |            |                    |            |                 |            |             |            |            |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)           The potential severance payments to Messrs. Ballbachand Van Kula are based on the terms of the applicable named executive officer’semployment agreement, each of which provides that if such officer’s employmentis terminated by us without cause, he will be entitled to continued payments byus of his base salary until the earlier of (i) eighteen months (for Mr. Ballbach)and one year (for Mr. Van Kula) after termination, or (ii) until heobtains new employment. Such continued payments are subject to the officer’sexecution of a general release and standard provisions regardingconfidentiality, non-competition and non-solicitation of employees andcustomers.

(2)           The stock option agreements provide that the vesting ofoptions to purchase shares of our common stock granted pursuant thereto will beaccelerated if we experience a change in control (as defined in the StockPlan), unless our Board of Directors reasonably determines in good faith thatoptions with substantially equivalent or better terms are substituted for theexisting options. The amounts reflected in the table assume the acceleration ofvesting upon a change in control. In addition, the stock option agreements providethat, upon the officer’s termination of employment by reason of death ordisability, all unvested options will vest and remain exercisable until theearlier of (i) six months after such termination, and (ii) theexpiration of the option term. Our Board of Directors also has the discretionto accelerate the vesting of options at any time and from time to time. The “payments”relating to stock options represent the value of unvested and accelerated stockoptions as of December 31, 2006, calculated by multiplying the number ofaccelerated options by the difference between the exercise price and the fairvalue of our common stock (as determined by our Board of Directors) as of December 31,2006, which was $98.64.

(3)           The restricted stock unit agreements provide that, uponthe officer’s termination of employment by reason of death or disability orupon the effective date of a change in control (as defined in the Stock Plan),all unvested restricted stock units will vest. The “payments” relating torestricted stock units represent the value of unvested and acceleratedrestricted stock units, calculated by multiplying the number of acceleratedunits by the fair value of our common stock (as determined by our Board ofDirectors) as of December 31, 2006.

(4)           OurRetention Bonus Plan providesthat, within 30 days of the officer’s termination of employment by reason ofdeath or disability or the effective date of a change in control (as defined inthe Stock Plan), the officer will be entitled to any remaining payments underthe Retention Bonus Plan.

*DirectorCompensation*

Our directors who are not also employees of VWR oremployees or principals of CD&R (“Outside Directors”) are compensatedpursuant to VWR’s Directors Compensation Policy for their service on both VWR’sand our Board of Directors (and any committees thereof). Under this policy,such directors receive an annualized fee of $70,000 for their service on bothBoards, at least 50% of which is payable in shares (or rights to acquireshares) of our common stock granted under Stock Plan. Directors may elect toreceive up to 100% of their annual fee in shares or rights to acquire sharesgranted under the Stock Plan.

Any Outside Director serving as the chair of any ofthe committees of VWR’s and our Board of Directors will receive an additional$10,000 annual cash fee, $15,000 in the case of the chair of the auditcommittee.

All cash fees are paid by VWR, and the directors donot receive separate cash consideration from us.

115

 

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We do not pay any remuneration to any of our directorswho are also employees of VWR or who are employees or principals of CD&R,however all such directors are reimbursed for reasonable travel and lodgingexpenses incurred to attend Board and committee meetings.

Thetable below summarizes the compensation earned by Outside Directors for 2006.

| **Name**                     | ** ** | ** ** | ** ** | **Fees  Earned  or Paid in  Cash  ($)** | ** ** | **Stock  Awards  ($)** | ** ** | **Option  Awards  ($)** | ** ** | **Non-Equity  Incentive  Plan  Compens-  ation  ($)** | ** ** | **Change in  Pension Value  and  Nonqualified  Deferred  Compens-  ation Earnings  ($)** | ** ** | **All Other  Compens-  ation  ($)** | ** ** | **Total  ($)** |
|------------------------------|------------|------------|------------|-----------------------------------------|------------|------------------------|------------|-------------------------|------------|-------------------------------------------------------|------------|------------------------------------------------------------------------------------------|------------|-------------------------------------|------------|----------------|
| Robert L. Barchi(1)          |       | $26,250    |       | $26,250                                 |       | $—                |       | $—                 |       | $—                                               |       | $—                                                                                  |       | $52,500                             |
| Alan W. Dunton(1)            |       | 26,250     |       | 26,250                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 52,500                              |
| Joseph F.  Eckroth, Jr. |       | 35,000     |       | 35,000                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 70,000                              |
| Lewis S. Edelheit            |       | 35,000     |       | 35,000                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 70,000                              |
| Brian P. Kelley              |       | —     |       | 70,000                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 70,000                              |
| Axel Ruckert(1)              |       | —     |       | 52,500                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 52,500                              |
| Carl T. Stocker              |       | 50,000     |       | 35,000                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 85,000                              |
| Robert J. Zollars            |       | —     |       | 70,000                                  |       | —                 |       | —                  |       | —                                                |       | —                                                                                   |       | 70,000                              |

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(1)          Messrs. Barchi andDunton became directors in May 2006 and Mr. Ruckert resigned in September 2006.

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**ITEM 12.**         SECURITYOWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDERMATTERS

TheCompany owns, through CDRV Holdings, Inc., all of the outstanding capitalstock of VWR International, Inc. The following table lists all shares of ourcommon stock beneficially owned by the following holders as of March 16,2007:

| **Name and Address of Beneficial Owner(1)** | ** ** | ** ** | ** ** | **Number** | ** ** | **Percent** |
|----------------------------------------------------------------------|------------|------------|------------|------------|------------|-------------|
| CD&R Fund VI(2)                                                  |       | 4,200,000  |       | 70.31      |
| Banc of America Capital  Investors, L.P.(3)                          |       | 350,000    |       | 5.86       |
| John M. Ballbach(4)                                                  |       | 36,962     |       | *          |
| Jack L. Wyszomierski(5)                                              |       | 18,666     |       | *          |
| George Van Kula(6)                                                   |       | 6,670      |       | *          |
| Theodore C. Pulkownik(7)                                             |       | 18,000     |       | *          |
| Charles F. Canfield(8)                                               |       | 11,700     |       | *          |
| B.Charles Ames(9)                                                    |       | —     |       | *          |
| Charles A. Banks(9)                                                  |       | —     |       | *          |
| Robert L. Barchi                                                     |       | 325        |       | *          |
| Alan W. Dunton                                                       |       | 325        |       | *          |
| Joseph F.  Eckroth, Jr.(10)                                     |       | 2,733      |       | *          |
| Lewis S. Edelheit                                                    |       | 3,784      |       | *          |
| George K. Jaquette                                                   |       | —     |       | *          |
| Brian P. Kelley                                                      |       | 3,566      |       | *          |
| Richard J. Schnall(9)                                                |       | —     |       | *          |
| Carl T. Stocker                                                      |       | 4,284      |       | *          |
| Robert J. Zollars(11)                                                |       | 6,066      |       | *          |
| All directors and executive officers as a group (21  persons)        |       | 138,797    |       | 2.32       |

 

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                 * Less than 1%

       (1) In accordance with Rule 13d-3 under the Exchange Act, asamended, a person is deemed a “beneficial owner” of a security if he or she hasor shares the power to vote or direct the voting of such security or the powerto dispose or direct the disposition of such security. A person is also deemedto be a beneficial owner of any securities which that person has the right toacquire beneficial ownership of within 60 days. More than one person may bedeemed to be a beneficial owner of the same securities. Each of suchstockholders has sole voting and investment power as to the shares unlessotherwise noted.

       (2) CD&R Associates VI Limited Partnership, a Cayman Islandsexempted limited partnership, is the general partner of CD&R Fund VI andhas the power to direct CD&R Fund VI as to the voting and disposition ofshares held by CD&R Fund VI. CD&R Investment Associates VI, Inc.,a Cayman Island exempted company, is the general partner of CD&R AssociatesVI Limited Partnership and has the power to direct CD&R Associates VILimited Partnership as to its direction of CD&R Fund VI’s voting anddisposition of the shares held by CD&R Fund VI. No person controls thevoting and disposition of CD&R Investment Associates VI, Inc., withrespect to the shares owned by CD&R Fund VI. Each of CD&R Associates VILimited Partnership and CD&R Investment Associates VI, Inc.expressly disclaims beneficial ownership of the shares owned by CD&R FundVI. The business address for each of CD&R Fund VI, CD&R Associates VILimited Partnership and CD&R Investment Associates VI, Inc., is 1403Foulk Road, Suite 106, Wilmington, Delaware 19803.

       (3) Banc of America Capital Investors, L.P. is aDelaware limited partnership. Banc of America Capital Management, L.P., aDelaware limited partnership, is the general partner of Banc of America Capital

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Investors, L.P. andhas the power to direct Banc of America Capital Investors, L.P. as to thevoting and disposition of shares held by Banc of America Capital Investors,L.P. BACM I GP, LLC, a Delaware limited liability company, is the generalpartner of Banc of America Capital Management L.P. and has the power to directBanc of America Capital Management L.P. as to the voting and disposition ofshares held by Banc of America Capital Management L.P. The business address forBanc of America Capital Investors, L.P., Banc of America Capital Management,L.P. and BACM I GP, LLC, is Bank of America Corporate Center, 100 North TryonStreet, 25th Floor, Charlotte, NC 28255.

       (4) Mr. Ballbach owns 23,844 shares, has11,785 options that are currently vested and exercisable, and has 1,333 vestedrestricted stock units. All shares and awards were issued pursuant to the StockPlan.

       (5) Mr. Wyszomierski owns 10,000 shares, has8,000 options that are currently vested and exercisable, and has 666 vestedrestricted stock units. All shares and awards were issued pursuant to the StockPlan.

       (6) Mr. Van Kula owns 6,670 shares issuedpursuant to the Stock Plan.

       (7) Mr. Pulkownik owns 10,000 shares and has8,000 options that are currently vested and exercisable. All shares and awardswere issued pursuant to the Stock Plan.

       (8) Mr. Canfield owns 6,500 shares and has5,200 options that are currently vested and exercisable. All shares and awardswere issued pursuant to the Stock Plan.

       (9) Does not include 4,200,000 shares owned byCD&R Fund VI. Messrs. Ames, Banks and Schnall may be deemed to sharebeneficial ownership of the shares owned of record by  CD&R Fund VI by virtue of their status asstockholders of CD&R Investment Associates VI, Inc., the generalpartner of CD&R Associates VI Limited Partnership. However, each of Messrs. Banks,Ames and Schnall expressly disclaim beneficial ownership of the shares owned byCD&R Fund VI.

(10) Includes 1,090 shares that were purchased by Mr. Eckrothunder the Stock Plan that were immediately transferred to a trust created forthe benefit of Mr. Eckroth’s family.

(11) Includes 2,500 shares that were purchased by Mr. Zollarsunder the Stock Plan and immediately transferred to a limited partnershipcontrolled by Mr. Zollars.

**Equity Compensation Plan Information**

| **Plan Category**                                           | ** ** | ** ** | ** ** | **Number of Securities to  be Issued Upon Exercise  of Outstanding Options** | ** ** | **Weighted-Average  Exercise Price of  Outstanding Options** | ** ** | **Number of Securities  Remaining for Future  Issuance Under Equity  Compensation Plans  (Excluding Securities  Reflected in Column(a))** |
|-------------------------------------------------------------|------------|------------|------------|------------------------------------------------------------------------------|------------|--------------------------------------------------------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------|
| ** **                                                  | ** ** | **(a)**    | ** ** | **(b)**                                                                      | ** ** | **(c)(1)**                                                   |
| Equity compensation  plans approved by security  holders    |       | 515,734    |       | $28.81                                                                       |       | 126,632                                                      |
| Equity compensation  plans not approved by security holders |       | —     |       | —                                                                       |       | —                                                       |
| Total at  December 31,  2006                           |       | 515,734    |       | $28.81                                                                       |       | 126,632                                                      |

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(1)          Based on shares, optionsand restricted stock units issued under the Stock Plan.

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**ITEM 13.**         CERTAINRELATIONSHIPS, RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

*CertainRelationships and Related Transactions*

**Investment FundManaged by CD&R**

***Overview.***   Asof March 16, 2007, CD&R Fund VI beneficially owns approximately 70.3%of our outstanding common stock. CD&R Fund VI is a private investment fundmanaged by CD&R.

The general partner of CD&R Fund VI is CD&RAssociates VI Limited Partnership, a Cayman Islands exempted limitedpartnership. CD&R Associates VI Limited Partnership’s general partner isCD&R Investment Associates VI, Inc., a Cayman Islands exemptedcompany.

Four of our directors, B. Charles Ames (operatingprincipal), Charles A. Banks (operating principal), George K. Jaquette(professional employee) and Richard J. Schnall (financial principal), areprincipals or employees of CD&R (Messrs. Banks, Ames and Schnall areprincipals and Mr. Jaquette is a professional employee). Messrs. Ames,Banks and Schnall are limited partners (including a family trust of Mr. Ames)of CD&R Associates VI Limited Partnership and stockholders and directors ofCD&R Investment Associates VI, Inc.

CD&R is a private investment firm organized as aDelaware corporation. CD&R is the manager of a series of investment funds,including CD&R Fund VI. CD&R generally assists in structuring,arranging financing for and negotiating the acquisition of the companies inwhich the funds it manages invest. After the consummation of such transactions,CD&R generally provides management and financial consulting services to thecompanies. Such services include helping companies to establish effectivebanking, legal and other business relationships and assisting management indeveloping and implementing strategies for improving their operational,marketing and financial performance.

***ConsultingAgreement.***   CDRV Investors, CDRV Holdings, Inc.,VWR International, Inc., CDRV Investment Holdings Corporation and CD&Rare parties to an amended Consulting Agreement, pursuant to which CD&Rprovides us with financial advisory and management consulting services. We payCD&R a management fee of $1.5 million annually, which will be reviewed onan annual basis. We paid CD&R a fee of $18.0 million as compensation forperforming financial, investment banking, management advisory and otherservices in connection with the Acquisition, and reimbursed certain CD&Rexpenses. Effective as of May 15, 2005, the parties entered into a loanoutagreement under the Consulting Agreement whereby CD&R agreed to make theservices of James W. Rogers, the former Chairman of our Board and a CD&Remployee, available to us. The management fee payable to CD&R was increasedby $0.5 million annually for the period Mr. Rogers was our Chief ExecutiveOfficer, and $0.3 million was paid to CD&R in the year ended December 31,2005 in connection therewith. The loanout agreement terminated pursuant to itsterms upon the approval of Mr. Ballbach’s employment as our ChiefExecutive Officer in late 2005.

***IndemnificationAgreement.***   CDRV Investors, CDRV Holdings, Inc.,VWR International, Inc., and CDRV Investment Holdings Corporation areparties to an amended Indemnification Agreement with CD&R and CD&R FundVI, pursuant to which we indemnify CD&R, CD&R Fund VI, any otherinvestment vehicle managed by CD&R, their respective directors, officers,partners, employees, agents and controlling persons, against certainliabilities arising under federal securities laws, liabilities arising out ofthe performance of the consulting agreement and certain other claims andliabilities.

***Stock SubscriptionAgreement.***   As of March 16, 2007,CD&R Fund VI beneficially owns approximately 70.3% of the outstandingshares of our common stock. It subscribed for 4,800,000 shares of our commonstock for an aggregate purchase price of $480.0 million pursuant to a StockSubscription Agreement, dated as of April 7, 2004. Pursuant to thatagreement, CD&R Fund VI may designate all of the members of our Board ofDirectors and certain of its direct and indirect subsidiaries. CD&R is also

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entitled to consult withthe Company with respect to our operations at any time, to have observersattend meetings of its Board of Directors and those of its subsidiaries,including us, and to receive all of its quarterly and annual financial reportsand budgets, as well as other documents.

On June 22, 2004,CD&R Fund VI transferred an aggregate of 500,000 shares of our common stockto five of its limited partners, and on December 6, 2004, CD&R Fund VItransferred another 100,000 shares of our common stock to another of itslimited partners, pursuant to transfer agreements among the Company, CD&RFund VI and each such transferee. Pursuant to the transfer agreements,transferees are entitled to the rights and obligations of a minoritystockholder under the Registration and Participation Agreement, dated as of April 7,2004, including the transfer restrictions, registration rights, tag-alongrights and drag-along rights that are described below under the heading “—Agreementwith Management and Other Investors—Registration and Participation Agreement.”

**Agreements withManagement and Other Investors**

***Management EquityOfferings.***   Shortly after the Acquisition, weadopted the Stock Plan. Under the Stock Plan, our Board of Directors may grantto our directors who are not also our employees or associated with CD&R,any of our executive officers and certain other employees rights to purchaseshares of our common stock, options to purchase shares of our common stock,restricted stock units and other share-based awards.

See Note 15 to theFinancial Statements and “Item 11—Executive Compensation” for more informationregarding 2006 transactions pursuant to the Stock Plan.

***Registration and Participation Agreement.***

CDRV Investors, CD&R Fund VI and certain otherstockholders of CDRV Investors entered into a Registration and ParticipationAgreement, dated as of April 7, 2004, pursuant to which, among otherthings:

***TransferRestrictions.***   Until the earlier of theinitial public offering of our common stock and the fifth anniversary of theagreement, holders of our common stock other than CD&R Fund VI are subjectto certain restrictions on transfer.

***Registration Rights.***   Holdersof shares of our common stock, including certain executive officers, areentitled to registration rights for such shares of common stock held by them:

·       holdersconstituting, at any time prior to the initial public offering of our commonstock, at least 50% and thereafter, at least 25%, of the total registrablesecurities may request that the Company use its best efforts to register suchsecurities for public resale,

·       followingthe initial public offering of our common stock, under specified circumstances(and if the Company has qualified for registration on Form S-3),certain holders other than CD&R Fund VI may request that the Company useits best efforts to register their shares of its common stock for public resaleon Form S-3, and

·       ifthe Company registers any common stock at any time, either for its account orfor the account of any stockholder, the holders of registrable securities areentitled to request that it use its best efforts to include the number of theirshares of common stock that, in the opinion of the underwriters, can be sold.

The Company will bear all registration expenses (otherthan underwriting discounts) for the first four registrations, including thefees and expenses of counsel to the selling stockholders. Because only CD&RFund VI holds more than 50% of its outstanding common stock, it is the onlystockholder able to initiate the initial registration by itself. The Companyalso will bear the registration expenses (other than 

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underwriting discounts) fortwo registrations on Form S-3 requested by certain co-investors ofCD&R Fund VI, including the fees and expenses of counsel to the sellingstockholders.

If the Company files a registration statement underthe Securities Act with respect to a public offering of its common stock, noholders of its common stock will be permitted to effect any public sale ordistribution of any shares of such stock during the 20 days before and the 180days (or, in the case of a shelf registration, 90 days) after the effectivedate of the registration statement (other than as part of the public offering).

***ParticipationRights.***   Prior to the initial public offeringof the Company, certain holders of our common stock have the right to purchase,on a pro rata basis, additional shares of our common stock if CD&R Fund VIor any other investment vehicle managed by CD&R subscribes for additionalshares of common stock, excluding any issuances by way of dividends ordistributions on in kind, or stock splits, reclassifications, recapitalizationsor consolidations.

***Tag-Along Rights.***   Priorto such time as a public market has been established for 20% or more of ourcommon stock, certain holders of our common stock other than CD&R Fund VIhave the right to participate, on a pro rata basis and subject to the sameterms and conditions, in any sale by CD&R Fund VI of more than 10% of itsshares of common stock to a third party purchaser or to the Company.

***Drag-AlongRight.***   Priorto such time as a public market has been established for 20% or more of ourcommon stock, if CD&R Fund VI intends to sell more than 50% of its sharesof our common stock to a third party purchaser, CD&R Fund VI will have theright to require certain other holders of common stock to participate in suchsale, on a pro rata basis and subject to the same terms and conditions.

**Other Relationships**

***SIRVA.***   Wereceive product transportation and relocation services from SIRVA, Inc. (“SIRVA”).As of December 31, 2006, two private equity funds managed by CD&R,including CD&R Fund VI, beneficially owned approximately 33% of the equityinterests in SIRVA. Three members of our Board of Directors, Messrs. Kelley,Schnall and Stocker, are also members of SIRVA’s Board of Directors, and Mr. Kelleyis the President and Chief Executive Officer of SIRVA. In 2006, we incurredtotal expenses of approximately $1.7 million with SIRVA.

***Debevoise &Plimpton LLP.*****  **Wereceive certain legal services from the law firm of Debevoise &Plimpton LLP. A member of Debevoise & Plimpton LLP is the spouse ofJoseph L. Rice III, a former director of the Company and VWR. Mr. Rice isa principal of CD&R. Total fees for services rendered by Debevoise &Plimpton LLP during 2006 were approximately $1.4 million.

***Hertz Corporation.*****  **When business travel requires therental of an automobile, our officers and employees rent from The HertzCorporation (“Hertz”). As of February 12, 2007, certain investment fundsassociated with or designated by CD&R beneficially owned approximately 24%of the common stock of Hertz Global Holdings, Inc., Hertz’s ultimateparent company. In 2006, we reimbursed officer and employee expenses incurredfrom Hertz rentals in the aggregate amount of approximately $0.5 million.

***Thomas Jefferson University.******  ***We sellcertain products to Thomas Jefferson University. One of our directors, RobertL. Barchi, is the President of Thomas Jefferson University. In 2006, we hadless than $200,000 of net sales to Thomas Jefferson University.

*Review and Approvalof Transactions with Related Persons*

Our Board of Directors hasnot formally adopted a written policy and procedure for approval oftransactions involving the Company and “related persons” (directors andexecutive officers or their immediate family members, or shareholders owningfive percent or greater of the Company’s outstanding 

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stock).However, the Board believes that any such transactions have in the past been,and will continue to be, appropriately reviewed, approved and monitored. TheBoard intends to adopt a written policy covering any related person transactionthat meets the minimum threshold for disclosure under the relevant SEC rules (generally,transactions involving amounts exceeding $120,000 in which a related person hasa direct or indirect material interest).

*DirectorIndependence*

OurBoard of Directors has adopted Corporate Governance Guidelines, which, amongother things, require a majority of the Board members to satisfy theindependence requirements of the New York Stock Exchange and for the Board tomake an annual assessment regarding the members’ qualification as independent. TheBoard has determined that each of the following non-employee Directors isindependent and has no material relationship with the Company:

| (1) Robert L. Barchi             |   | (5) Brian P. Kelley   |
|---------------------------------------|--------|----------------------------|
| (2) Alan W.  Dunton              |   | (6) Carl T. Stocker   |
| (3) Joseph  F. Eckroth, Jr. |   | (7) Robert J. Zollars |
| (4) Lewis S.  Edelheit           |   |                       |

 

TheBoard has four standing committees to facilitate and assist the Board in theexecution of its responsibilities. The committees currently are the AuditCommittee, the Compensation Committee, the Executive Committee and a Nominating &Corporate Governance Committee. The table below shows current membership foreach of the standing Board committees. Messrs. Ames, Ballbach, Banks,Jaquette and Schnall are not independent.

| Audit  Committee    | ** ** | **Compensation  Committee** | ** ** | **Executive  Committee** | ** ** | **Nominating &  Corporate Governance  Committee** |
|---------------------|------------|-----------------------------|------------|--------------------------|------------|------------------------------------------------------------|
| Alan W. Dunton      |       | B. Charles Ames             |       | B. Charles Ames          |       | B. Charles Ames                                            |
| Lewis S. Edelheit   |       | Charles A. Banks            |       | John M. Ballbach         |       | Charles A. Banks                                           |
| George K.  Jaquette |       | Robert L. Barchi            |       | Charles A. Banks         |       | Lewis S. Edelheit                                          |
| Richard J.  Schnall |       | Joseph F. Eckroth, Jr. |       | Richard J. Schnall       |       | George K. Jaquette                                         |
| Carl T. Stocker     |       | Brian P. Kelley             |       |                     |       |                                                       |
|                |       | Robert J. Zollars           |       |                     |       |                                                       |

 

Axel Ruckert resigned fromour Board of Directors, effective September 22, 2006. Prior to hisresignation, Mr. Ruckert had been serving on the Audit Committee, and hewas independent. Joseph L. Rice, III and James W. Rogers resigned from ourBoard of Directors, effective December 7, 2006. Prior to theirresignations, Mr. Rice had been serving on the Audit Committee, and Mr. Rogershad been serving on the Executive and Compensation Committees, and neither Mr. Ricenor Mr. Rogers was independent.

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**ITEM 14.**         PRINCIPALACCOUNTANT FEES AND SERVICES

KPMGserved as the Company’s independent auditor for the fiscal years ended December 31,2006 and 2005. Fees and expenses for services rendered by KPMG in 2006 and 2005were approved by our Audit Committee. KPMG’s fees and expenses for servicesrendered to the Company for the past two fiscal years are set forth in thetable below. We have determined that the provision of these services is compatiblewith maintaining the independence of our independent auditors.

| **Type of Fees** | ** ** | ** **                           | ** ** | **2006** | ** ** | **2005** | ** ** |
|----------------------------|------------|--------------------------------------|------------|----------|------------|----------|------------|
| ** **                 | ** ** | **(dollars in thousands)** | ** ** |
| Audit Fees(1)              |       | $                                    | 4,259      |     | $          | 2,158    |       |
| Audit-Related  Fees(2)     |       | 170                                  |       | 88       |       |
| Tax Fees(3)                |       | 38                                   |       | 52       |       |
|                       |       | $                                    | 4,467      |     | $          | 2,298    |       |

 

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(1)          2006 and 2005 audit feesrelate to the audit of the Company’s global operations including statutoryaudits. 2006 also includes fees related to the audit of internal control overfinancial reporting. Also included herein are fees related to various employeebenefit plan audits.

(2)          2006 audit-relatedservices include procedures performed in connection with the issuance of theSenior Floating Rate Notes.

(3)          Fees for both yearsrelate to tax compliance services.

**Pre-Approval Policyfor Auditor Services**

The Audit Committee has adopted a policy that requiresit to pre-approve the audit and non-audit services performed by the Company’sauditor in order to assure that providing such services will not impair theauditor’s independence.

The Audit Committee has the sole and directresponsibility and authority for the appointment, termination and compensationto be paid to the independent accountants. The Committee has the responsibilityto approve, in advance of the provision thereof, all audit services and permissiblenon-audit services to be performed by the independent accountants as well ascompensation to be paid with respect to such services.

Our Audit Committee Charter authorizes the Committeeto delegate authority to pre-approve audit and permissible non-audit servicesto a member of the Committee. Any decisions made by such member under delegatedauthority, must be presented to the full Committee at its next scheduledmeeting.

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**PART IV**

**ITEM 15.**         EXHIBITSAND FINANCIAL STATEMENT SCHEDULES

a.                 Financial statements,financial statement schedule and exhibits filed as part of this report

1.                 Thefollowing financial statements, together with the Report of IndependentRegistered Public Accountants and Notes to Consolidated Financial Statements,are filed as part of this report:
|                                                                                                                                                                                                              | ** ** | **Page** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|----------|------------|
| **CDRV INVESTORS, INC.  (Successor) and VWR INTERNATIONAL CORPORATION (Predecessor)**                                                                                                                        | ** ** |     | ** ** | ** ** |   |
| Report of  Independent Registered Public Accounting Firm                                                                                                                                                     |       |     | 43         | ** ** |   |
| Consolidated  Balance Sheets as of December 31, 2006 and 2005                                                                                                                                           |       |     | 44         | ** ** |   |
| Consolidated  Statements of Operations for the years ended December 31, 2006 and 2005  and the periods included in the year ended December 31, 2004                                                |       |     | 45         | ** ** |   |
| Consolidated  Statements of Stockholders’ Equity and other Comprehensive Income for the  years ended December 31, 2006 and 2005 and the periods included in the  year ended December 31, 2004 |       |     | 46         | ** ** |   |
| Consolidated  Statements of Cash Flows for the years ended December 31, 2006 and 2005  and the periods included in the year ended December 31, 2004                                                |       |     | 48         | ** ** |   |
| Notes to  Consolidated Financial Statements                                                                                                                                                                  |       |     | 49         | ** ** |   |
| Schedule II—Valuation  and Qualifying Accounts for the years ended December 31, 2006 and 2005  and the periods included in the year ended December 31, 2004.                                  |       |     | 130        | ** ** |   |

 
| Exhibit  Number | ** ** | **Description of Documents**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          | ** ** | **Method of Filing**                                                                                     |
|-----------------|------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------------------------------------------------------------|
| 3.1             |       | Certificate of Incorporation of CDRV  Investors, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |       | Previously filed as Exhibit 31 to Form S-4,  filed on April 15, 2005.                               |
| 3.2             |       | Amended and Restated Bylaws of CDRV  Investors, Inc.                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |       | Previously filed as Exhibit 32 to Form S-4,  filed on April 15, 2005.                               |
| 4.1(a)          |       | Credit Agreement, dated as of April 7, 2004,  among CDRV Acquisition Corporation (the rights and obligations of which  thereunder were assumed by VWR International, Inc.), the Foreign  Subsidiary Borrowers from time to time parties thereto, the several Lenders  from time to time parties thereto, Deutsche Bank AG, New York Branch, as Administrative  Agent, Citicorp North America, Inc., as Syndication Agent, and Bank of  America, N.A., BNP Paribas and Barclays Bank PLC, as Documentation Agents |       | Previously filed as Exhibit 41 to VWR  International, Inc. Form S-4, filed on August 30, 2004. |
| 4.1(b)          |       | Assumption Agreement, dated as of April 7,  2004, between CDRV Acquisition Corporation and VWR International, Inc.                                                                                                                                                                                                                                                                                                                                                                                                    |       | Previously filed as Exhibit 42 to VWR  International, Inc. Form S-4, filed on August 30, 2004. |

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| 4.1(c) |   | Guarantee and Collateral Agreement, dated as of  April 7, 2004, made by CDRV Holdings, Inc., CDRV Acquisition  Corporation (the rights and obligations of which were assumed by VWR  International, Inc.) and certain of its Subsidiaries in favor of  Deutsche Bank AG, New York Branch, as Administrative Agent.                                                                                                  |   | Previously filed as Exhibit 43 to VWR  International, Inc. Form S-4, filed on August 30, 2004. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------|
| 4.1(d) |   | First Amendment, dated as of February 11, 2005,  to said Credit Agreement and said Guarantee and Collateral  Agreement                                                                                                                                                                                                                                                                                              |   | Previously filed as Exhibit 41 to Form 8-K,  filed on January 30, 2007.                             |
| 4.1(e) |   | Second Amendment, dated as of August 18, 2006,  to said Credit Agreement                                                                                                                                                                                                                                                                                                                                                      |   | Previously filed as Exhibit 42 to Form 8-K,  filed on January 30, 2007.                             |
| 4.1(f) |   | Third Amendment, dated as of January 29, 2007, to  said Credit Agreement                                                                                                                                                                                                                                                                                                                                                      |   | Previously filed as Exhibit 43 to Form 8-K,  filed on January 30, 2007.                             |
| 4.2(a) |   | Indenture, dated as of December 16, 2004, by  and among CDRV Investors, Inc., as Issuer (the rights and obligations of  which were assumed by CDRV Investment Holdings Corporation), the Subsidiary  Guarantors from time to time parties thereto, as Subsidiary Guarantors and  Wells Fargo Bank, National Association, as Trustee, relating to 95¤8% Senior Discount Notes due 2015 of  CDRV Investors, Inc. |   | Previously filed as Exhibit 44 to Form S-4,  filed on April 15, 2005.                               |
| 4.2(b) |   | Form of 95¤8% Senior Discount Not                                                                                                                                                                                                                                                                                                                                                                                        |   | Previously filed as Exhibit 46 to Form S-4,  filed on April 15, 2005.                               |
| 4.2(c) |   | Assignment and Assumption Agreement, dated  December 6, 2006, between CDRV Investors, Inc. and CDRV Investment  Holdings Corporation                                                                                                                                                                                                                                                                                     |   | Previously filed as Exhibit 21 to Form 8-K,  filed on December 12, 2006.                            |
| 4.2(d) |   | First Supplemental Indenture, dated as of  December 6, 2006, among CDRV Investors, Inc., as predecessor  company, CDRV Investment Holdings Corporation, as successor company, and  Wells Fargo Bank, National Association, as trustee                                                                                                                                                                                    |   | Previously filed as Exhibit 41 to Form 8-K,  filed on December 12, 2006.                            |
| 4.2(e) |   | Second Supplemental Indenture, dated as of  December 6, 2006, among CDRV Investment Holdings Corporation, as issuer,  CDRV Investors, Inc., as parent guarantor, and Wells Fargo Bank,  National Association, as trustee                                                                                                                                                                                                 |   | Previously filed as Exhibit 42 to Form 8-K,  filed on December 12, 2006.                            |
| 4.3(a) |   | Indenture, dated as of December 14, 2006,  between CDRV Investors, Inc., as issuer, and Wells Fargo Bank, National  Association, as trustee, relating to Senior Floating Rate Notes due 2011 of  CDRV Investors, Inc.                                                                                                                                                                                               |   | Previously filed as Exhibit 41 to Form 8-K,  filed on December 15, 2006.                            |

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| 4.3(b)  |   | Exchange and Registration Rights Agreement, dated as  of December 14, 2006, between CDRV Investors, Inc. and Banc of  America Securities LLC                                                                                                                                                                                                                                                                       |   | Previously filed as Exhibit 42 to Form 8-K,  filed on December 15, 2006.                                                         |
|---------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|
| 4.4(a)  |   | Indenture, dated as of April 7, 2004, by and  among CDRV Acquisition Corporation, as Issuer (the rights and obligations of  which were assumed by VWR International, Inc.), the Subsidiary  Guarantors from time to time parties thereto, as Subsidiary Guarantors and  Wells Fargo Bank, National Association, as Trustee, relating to the 67¤8%  Senior Notes due 2012 of CDRV Acquisition Corporation      |   | Previously filed as Exhibit 4.4 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                             |
| 4.4(b)  |   | Indenture, dated as of April 7, 2004, by and  among CDRV Acquisition Corporation, as Issuer (the rights and obligations of  which were assumed by VWR International, Inc.), the Subsidiary  Guarantors from time to time parties thereto, as Subsidiary Guarantors and  Wells Fargo Bank, National Association, as Trustee, relating to the 8% Senior  Subordinated Notes due 2014 of CDRV Acquisition Corporation |   | Previously filed as Exhibit 4.5 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                             |
| 4.4(c)  |   | Supplemental Indenture, dated as of April 7,  2004, relating to the 67¤8% Senior  Notes                                                                                                                                                                                                                                                                                                                            |   | Previously filed as Exhibit 4.6 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                             |
| 4.4(d)  |   | Supplemental Indenture, dated as of April 7,  2004, relating to the 8% Senior Subordinated Notes                                                                                                                                                                                                                                                                                                                        |   | Previously filed as Exhibit 4.7 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                             |
| 4.4(e)  |   | Form of 67¤8%  Senior Notes                                                                                                                                                                                                                                                                                                                                                                                        |   | Previously filed as Exhibit 4.10 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                            |
| 4.4(f)  |   | Form of 8% Senior Subordinated Notes                                                                                                                                                                                                                                                                                                                                                                                    |   | Previously filed as Exhibit 4.11 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                            |
| 4.4(g)  |   | Supplemental Indenture, dated as of April 7,  2004, relating to the 67¤8% Senior  Notes                                                                                                                                                                                                                                                                                                                            |   | Previously filed as Exhibit 4.12 to Amendment  No. 2 to VWR International, Inc. Form S-4, filed on  November 19, 2004. |
| 4.4(h)  |   | Supplemental Indenture, dated as of April 7,  2004, relating to the 8% Senior Subordinated Notes                                                                                                                                                                                                                                                                                                                        |   | Previously filed as Exhibit 4.13 to Amendment  No. 2 to VWR International, Inc. Form S-4, filed on November 19,  2004. |
| 10.1(a) |   | Consulting Agreement, dated as of April 7,  2004, by and among CDRV Investors, Inc., CDRV Holdings, Inc., CDRV  Acquisition Corporation, CDRV Delaware, Inc. and Clayton,  Dubilier & Rice, Inc.                                                                                                                                                                                           |   | Previously filed as Exhibit 10.1 to VWR  International, Inc. Form S-4, filed on August 30, 2004.                            |
| 10.1(b) |   | First Amendment, dated December 6, 2006, to  said Consulting Agreement                                                                                                                                                                                                                                                                                                                                                  |   | Previously filed as Exhibit 10.1 to Form 8-K,  filed on December 12, 2006.                                                       |

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| 10.2    |   | Loanout Agreement, dated as of May 15, 2005, by  and among CDRV Investors, Inc., CDRV Holdings, Inc., VWR  International, Inc. and Clayton, Dubilier & Rice, Inc.                                                                                                 |   | Previously filed as Exhibit 99.1 to VWR  International, Inc. Form 8-K, filed on May 15, 2005.     |
|---------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
| 10.3(a) |   | Indemnification Agreement, dated as of April 7,  2004, among CDRV Investors, Inc., CDRV Holdings, Inc., CDRV  Acquisition Corporation, CDRV Delaware, Inc., Clayton,  Dubilier & Rice, Inc. and Clayton, Dubilier & Rice  Fund VI Limited Partnership    |   | Previously filed as Exhibit 10.2 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.3(b) |   | First Amendment, dated December 6, 2006, to  said Indemnification Agreement                                                                                                                                                                                                                    |   | Previously filed as Exhibit 10.2 to Form 8-K,  filed on December 12, 2006.                             |
| 10.4    |   | Registration and Participation Agreement, dated as  of April 7, 2004, among CDRV Investors, Inc., Clayton,  Dubilier & Rice Fund VI Limited Partnership, Banc of America Capital  Investors, L.P., SSB Capital Partners (Master Fund) I, L.P., and CGI Private  Equity L.P., LLC |   | Previously filed as Exhibit 10.3 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.5    |   | Stock Subscription Agreement, dated April 7,  2004, between CDRV Investors, Inc. and Clayton, Dubilier & Rice  Fund VI Limited Partnership                                                                                                                                       |   | Previously filed as Exhibit 10.4 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.6    |   | VWR International, Inc. Directors Compensation  Policy*                                                                                                                                                                                                                                        |   | Previously filed as Exhibit 10.5 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.7(a) |   | CDRV Investors, Inc. Amended and Restated Stock  Incentive Plan*                                                                                                                                                                                                                               |   | Previously filed as Exhibit 10.1 to  Form 10-Q, for the quarter ended September 30, 2006.              |
| 10.7(b) |   | Form of Employee Stock Subscription Agreement  under said Stock Incentive Plan*                                                                                                                                                                                                                |   | Previously filed as Exhibit 10.7 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.7(c) |   | Form Restricted Stock Unit Agreement under said  Stock Incentive Plan*                                                                                                                                                                                                                         |   | Previously filed as Exhibit 10.1 to  Form 10-Q, for the quarter ended March 31, 2006.                  |
| 10.7(d) |   | Form of Stock Option Agreement under said Stock  Incentive Plan*                                                                                                                                                                                                                               |   | Previously filed as Exhibit 10.8 to VWR  International, Inc. Form S-4, filed on August 30, 2004.  |
| 10.8(a) |   | VWR International, Inc. Amended and Restated  Retirement Plan*                                                                                                                                                                                                                                 |   | Filed herewith.                                                                                                       |
| 10.8(b) |   | Amendment No. 1 to VWR International, Inc.  Amended and Restated Retirement Plan*                                                                                                                                                                                                         |   | Filed herewith.                                                                                                       |
| 10.8(c) |   | Amendment No. 2 to VWR International, Inc.  Amended and Restated Retirement Plan*                                                                                                                                                                                                         |   | Filed herewith.                                                                                                       |
| 10.9    |   | VWR Corporation Supplemental Benefits Plan*                                                                                                                                                                                                                                                         |   | Previously filed as Exhibit 10.11 to VWR  International, Inc. Form S-4, filed on August 30, 2004. |

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| 10.10(a) |   | Employment Agreement, between VWR International Inc  and John M. Ballbach*                                                  |   | Previously filed as Exhibit 99.2 to VWR  International, Inc. Form 8-K, filed on October 19, 2005.   |
|----------|--------|-----------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------|
| 10.10(b) |   | Amendment to said Employment Agreement*                                                                                     |   | Previously filed as Exhibit 99.1 to VWR  International, Inc. Form 8-K, filed on February 23,  2006. |
| 10.10(c) |   | Amendment to said Employment Agreement*                                                                                     |   | Previously filed as Exhibit 10.1 to VWR International, Inc.  Form 8-K, filed on December 22, 2006.  |
| 10.11    |   | Employment Agreement, between VWR International Inc.  and Jack L. Wyszomierski*                                             |   | Previously filed as Exhibit 10.13 to VWR  International, Inc. Form S-4, filed on August 30, 2004.   |
| 10.12    |   | Employment Agreement, between VWR International Inc.  and George Van Kula*                                                  |   | Filed herewith.                                                                                                         |
| 10.13    |   | Employment Agreement, between VWR International Inc.  and Theodore C. Pulkownik*                                            |   | Previously filed as Exhibit 10.18 to VWR  International, Inc. Form S-4, filed on August 30, 2004.   |
| 10.14    |   | Employment Agreement, between VWR International Inc.  and Charles F. Canfield*                                              |   | Previously filed as Exhibit 10.17 to VWR  International, Inc. Form S-4, filed on August 30, 2004.   |
| 10.15    |   | VWR International, Inc. Retention Bonus Plan*                                                                          |   | Previously filed as Exhibit 10.3 to Form 8-K,  filed on December 12, 2006.                               |
| 12.1     |   | Computation of Ratio of Earnings to Fixed Charges                                                                           |   | Filed herewith.                                                                                                         |
| 21.1     |   | List of subsidiaries                                                                                                        |   | Filed herewith.                                                                                                         |
| 24       |   | Power of Attorney                                                                                                           |   | Filed herewith.                                                                                                         |
| 31.1     |   | Certification of Principal Executive Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                |   | Filed herewith.                                                                                                         |
| 31.2     |   | Certification of Principal Financial Officer  pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                |   | Filed herewith.                                                                                                         |
| 32.1     |   | Certificate of Principal Executive Officer pursuant  to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) |   | Furnished herewith.                                                                                                     |
| 32.2     |   | Certificate of Principal Financial Officer pursuant  to 18 U.S.C. 1350 (Section 906 of the Sarbanes-Oxley Act of 2002) |   | Furnished herewith.                                                                                                     |

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*                    Denotesmanagement contract or compensatory plan, contract or arrangement.

**SUPPLEMENTALINFORMATION**

No annual report to security holders covering theCompany’s last fiscal year or proxy statement, form of proxy or other proxysoliciting material has been sent to security holders.

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Pursuantto the requirements of Sections 13 or 15(d) of the Securities Exchange Actof 1934, the registrant has duly caused this report to be signed on its behalfby the undersigned, thereunto duly authorized.
|        |     | CDRV INVESTORS, INC. |
|--------|----------|---------------------------|
|   |     | By:                       | /s/ GREGORY L. COWAN |
|   |     | Name:                     | Gregory L. Cowan |
|   | * * | *Title:*                  | *Vice President and Corporate Controller (Chief  Accounting Officer and Duly Authorized Officer)* |
|   |     | March 30, 2007       |
|        |          |                           |  |  |

 

Pursuantto the requirements of the Securities Exchange Act of 1934, this report hasbeen signed by the following persons on behalf of the registrant and in thecapacities and on the dates indicated.
|                           | **Signature** | ** **                   | ** ** | ** **           | **Title** | ** ** | ** ** | ** ** |
|---------------------------|---------------|------------------------------|------------|----------------------|-----------|------------|------------|------------|
| /s/ JOHN M. BALLBACH      |          | President, Chief Executive   |       | March 30,  2007 |
| John M. Ballbach          |          | Officer  and Director        |       |                 |
| /s/ JACK L.  WYSZOMIERSKI |          | Executive Vice President and |       | March 30,  2007 |
| Jack  L. Wyszomierski     |          | Chief  Financial Officer     |       |                 |
| /s/ GREGORY L. COWAN      |          | Vice President and           |       | March 30,  2007 |
| Gregory L. Cowan          |          | Corporate  Controller        |       |                 |

 

**Directors:**
| B. Charles Ames             |   | George K. Jaquette |   |
|-----------------------------|--------|--------------------|--------|
| Charles A. Banks            |   | Brian P. Kelley    |   |
| Robert L. Barchi            |   | Richard J. Schnall |   |
| Alan W. Dunton              |   | Carl T. Stocker    |   |
| Joseph F. Eckroth, Jr. |   | Robert J. Zollars  |   |
| Lewis S. Edelheit           |   |               |   |

 

ByGeorge Van Kula pursuant to a Power of Attorney executed by the directorslisted above, which Power of Attorney has been filed as an exhibit hereto.
| /s/ GEORGE VAN KULA |   | Attorney-in-fact |   | March 30, 2007 |
|---------------------|--------|------------------|--------|---------------------|
| George Van Kula     |   |             |   |                |

 

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**Schedule II -Valuation of Qualifying Accounts**

**CDRVINVESTORS, INC.Years ended December 31, 2006 and 2005 and for the period April 7 - December 31,2004(Dollars in millions)**
|                                              | ** ** | **Balance at  Beginning  of Period** | ** ** | **Charged  to Income** | ** ** | **Foreign  Currency  Translation  Adjustments** | ** ** | **Deductions  From  Reserves(1)** | ** ** | **Balance at  End  of Period** | ** ** |
|----------------------------------------------|------------|------------------------------------------------|------------|-----------------------------|------------|-------------------------------------------------|------------|-----------------------------------|------------|------------------------------------------|------------|
| Year ended  December 31, 2006           |       |                                           |       |                        |       |                                            |       |                              |       |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for  doubtful receivables          |       |                                           | $          | 6.6                         |       |                                            |       | $                                 | 6.0        |                                     |       |   | $ | 0.4 |   |   |   | $ | (3.2 | ) |   |   | $ | 9.8 |   |   |
| Year ended  December 31, 2005           |       |                                           |       |                        |       |                                            |       |                              |       |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for  doubtful receivables          |       |                                           | $          | 6.0                         |       |                                            |       | $                                 | 3.2        |                                     |       |   | $ | (0.4 | ) |   |   | $ | (2.2 | ) |   |   | $ | 6.6 |   |   |
| April 7, 2004 -  December 31, 2004 |       |                                           |       |                        |       |                                            |       |                              |       |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for doubtful  receivables          |       |                                           | $          | 7.4                         |       |                                            |       | $                                 | 2.5        |                                     |       |   | $ | 0.4 |   |   |   | $ | (4.3 | ) |   |   | $ | 6.0 |   |   |

 

**VWRINTERNATIONAL CORPORATIONFor the period January 1 - April 6, 2004(Dollars in millions)**
|                                      | ** ** | **Balance at   Beginning  of Period** | ** ** | **Charged  to Income** | ** ** | **Foreign  Currency  Translation  Adjustments** | ** ** | **Deductions  From  Reserves(1)** | ** ** | **Balance at  End  of Period** | ** ** |
|--------------------------------------|------------|------------------------------------------------------|------------|-----------------------------|------------|-------------------------------------------------|------------|-----------------------------------|------------|------------------------------------------|------------|
| January 1 - April 6,  2004 |       |                                                 |       |                        |       |                                            |       |                              |       |                                     |       |   |   |   |   |   |   |   |   |   |   |
| Allowance for  doubtful receivables  |       |                                                 | $          | 7.8                         |       |                                            |       | $                                 | 0.6        |                                     |       |   | $ | (0.1 | ) |   |   | $ | (0.9 | ) |   |   | $ | 7.4 |   |   |
|                                      |            |                                                      |            |                             |            |                                                 |            |                                   |            |                                          |            |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |

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(1)          Bad debts charged off,less recoveries.

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