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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------------

For the quarterly period ended September 30, 2009

or



| ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ----------------------------------------------------------------------------------------

For the transition period from  to

Commission File Number
001-10109

BECKMAN COULTER, INC.

(Exact name of registrant as specified in its charter)



|                                                               |  |                                     
|-------------------------------------------------------------- |  | ------------------------------------
|Delaware                                                       |  | 95-104-0600                         
|(State or other jurisdiction of incorporation or organization) |  | (I.R.S. Employer Identification No.)



|                                           |  |           
|------------------------------------------ |  | ----------
|250 S. Kraemer Boulevard, Brea, California |  | 92821     
|(Address of principal executive offices)   |  | (Zip Code)

(714) 993-5321

(Registrants telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 229.405
of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes   ̈    No   ̈

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated
filer and smaller reporting company in Rule 12b-2 of the Exchange Act.



|                           |  |                                               |  |                             
|-------------------------- |  | --------------------------------------------- |  | ----------------------------
|Large accelerated filer  x |  |                                               |  | Accelerated filer   ̈        
|                           |  |                                              
|Non-accelerated filer   ̈   |  | (Do not check if a smaller reporting company) |  | Smaller reporting company   ̈

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

The number of outstanding shares of the registrants common stock as of October 26, 2009 was 69,329,964 shares.









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##### Table of Contents

Table of Contents

Beckman Coulter, Inc.

FORM 10-Q for the Quarter
Ended September 30, 2009



|                             |  |                                                                                       |  |   
|---------------------------- |  | ------------------------------------------------------------------------------------- |  | --
|Part IFinancial Information
|Item 1.                      |  | Financial Statements                                                                  |  | 3 
|                             |  | Condensed Consolidated Balance Sheets                                                 |  | 3 
|                             |  | Condensed Consolidated Statements of Earnings                                         |  | 4 
|                             |  | Condensed Consolidated Statements of Cash Flows                                       |  | 5 
|                             |  | Notes to Condensed Consolidated Financial Statements                                  |  | 6 
|Item 2.                      |  | Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 25
|Item 3.                      |  | Quantitative and Qualitative Disclosures About Market Risk                            |  | 39
|Item 4.                      |  | Controls and Procedures                                                               |  | 39
|                            
|Part IIOther Information   
|Item 1                       |  | Legal Proceedings                                                                     |  | 40
|Item 1A.                     |  | Risk Factors                                                                          |  | 40
|Item 2.                      |  | Unregistered Sales of Equity Securities and Use of Proceeds                           |  | 44
|Item 6.                      |  | Exhibits                                                                              |  | 44
|Signatures                   |  | 45                                                                                   



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PART IFinancial Information



|Item 1. | Financial Statements
|------- | --------------------

BECKMAN COULTER, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except amounts per share)

(unaudited)



|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------- | ------- | -------------------- | - | -------
|                                                                                                                                                                                                                                          |  | September 30,    2009 |         | December 31,    2008
|Assets                                                                                                                                                                                                                                    |  |                       |         |                      |   |        
|Current assets                                                                                                                                                                                                                            |  |                       |         |                      |   |        
|Cash and cash equivalents                                                                                                                                                                                                                 |  | $                     | 262.3   |                      | $ | 120.0  
|Trade and other receivables, net                                                                                                                                                                                                          |  |                       | 804.9   |                      |   | 706.7  
|Inventories                                                                                                                                                                                                                               |  |                       | 652.3   |                      |   | 496.2  
|Deferred income taxes                                                                                                                                                                                                                     |  |                       | 60.4    |                      |   | 62.5   
|Prepaids and other current assets                                                                                                                                                                                                         |  |                       | 157.9   |                      |   | 76.3   
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total current assets                                                                                                                                                                                                                      |  |                       | 1,937.8 |                      |   | 1,461.7
|Property, plant and equipment, net                                                                                                                                                                                                        |  |                       | 594.8   |                      |   | 465.5  
|Customer leased instruments, net                                                                                                                                                                                                          |  |                       | 534.8   |                      |   | 448.7  
|Goodwill                                                                                                                                                                                                                                  |  |                       | 1,016.0 |                      |   | 696.3  
|Other intangible assets, net                                                                                                                                                                                                              |  |                       | 572.8   |                      |   | 396.8  
|Deferred income taxes                                                                                                                                                                                                                     |  |                       | -       |                      |   | 1.3    
|Other assets                                                                                                                                                                                                                              |  |                       | 77.0    |                      |   | 71.5   
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total assets                                                                                                                                                                                                                              |  | $                     | 4,733.2 |                      | $ | 3,541.8
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Liabilities and Stockholders Equity                                                                                                                                                                                                      |  |                       |         |                      |   |        
|Current liabilities                                                                                                                                                                                                                       |  |                       |         |                      |   |        
|Accounts payable                                                                                                                                                                                                                          |  | $                     | 264.4   |                      | $ | 172.2  
|Accrued expenses                                                                                                                                                                                                                          |  |                       | 565.8   |                      |   | 416.9  
|Income taxes payable                                                                                                                                                                                                                      |  |                       | -       |                      |   | 29.7   
|Short-term borrowings                                                                                                                                                                                                                     |  |                       | 26.8    |                      |   | 21.4   
|Current maturities of long-term debt                                                                                                                                                                                                      |  |                       | 11.1    |                      |   | 4.4    
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total current liabilities                                                                                                                                                                                                                 |  |                       | 868.1   |                      |   | 644.6  
|Long-term debt, less current maturities                                                                                                                                                                                                   |  |                       | 1,321.8 |                      |   | 819.0  
|Deferred income taxes                                                                                                                                                                                                                     |  |                       | 65.9    |                      |   | -      
|Other liabilities                                                                                                                                                                                                                         |  |                       | 559.0   |                      |   | 595.9  
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total liabilities                                                                                                                                                                                                                         |  |                       | 2,814.8 |                      |   | 2,059.5
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Commitments and contingencies (see Note 14)                                                                                                                                                                                               |  |                       |         |                      |   |        
|Stockholders equity                                                                                                                                                                                                                      |  |                       |         |                      |   |        
|Preferred stock, $0.10 par value; authorized 10.0 shares; none issued                                                                                                                                                                     |  |                       | -       |                      |   | -      
|Common stock, $0.10 par value; authorized 300.0 shares; shares issued 73.8 and 68.8 at September 30, 2009 and
December 31, 2008, respectively; shares outstanding 69.3 and 63.0 at September 30, 2009 and December 31, 2008, respectively |  |                       | 7.4     |                      |   | 6.9    
|Additional paid-in capital                                                                                                                                                                                                                |  |                       | 875.5   |                      |   | 621.5  
|Retained earnings                                                                                                                                                                                                                         |  |                       | 1,431.1 |                      |   | 1,381.6
|Accumulated other comprehensive loss                                                                                                                                                                                                      |  |                       | (143.1) |                      |   | (199.8)
|Treasury stock, at cost: 4.1 and 5.5 common shares at September 30, 2009 and December 31, 2008,
respectively                                                                                                                              |  |                       | (252.5) |                      |   | (327.9)
|Common stock held in grantor trust, at cost: 0.4 common shares at September 30, 2009 and December 31,
2008                                                                                                                                |  |                       | (21.0)  |                      |   | (19.3) 
|Grantor trust liability                                                                                                                                                                                                                   |  |                       | 21.0    |                      |   | 19.3   
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total stockholders equity                                                                                                                                                                                                                |  |                       | 1,918.4 |                      |   | 1,482.3
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        
|Total liabilities and stockholders equity                                                                                                                                                                                                |  | $                     | 4,733.2 |                      | $ | 3,541.8
|                                                                                                                                                                                                                                          |  |                       |         |                      |   |        

See accompanying notes to Condensed Consolidated Financial Statements.



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BECKMAN COULTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(in millions, except amounts per share)

(unaudited)



|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|------------------------------------------------------------ |  | ------------------------------- | ------ | -------------------------------- | - | ------ |  | ---- | ------- |  | - | -------
|                                                             |  | Three Months EndedSeptember 30, |        | Nine Months Ended  September 30,
|                                                             |  | 2009                            |        | 2008                             |   | 2009   |  | 2008
|Recurring revenue  supplies, service and lease payments     |  | $                               | 676.1  |                                  | $ | 594.6  |  | $    | 1,878.8 |  | $ | 1,792.6
|Instrument sales                                             |  |                                 | 146.7  |                                  |   | 164.2  |  |      | 392.2   |  |   | 495.0  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Total revenue                                                |  |                                 | 822.8  |                                  |   | 758.8  |  |      | 2,271.0 |  |   | 2,287.6
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Cost of recurring revenue                                    |  |                                 | 324.9  |                                  |   | 274.5  |  |      | 878.2   |  |   | 823.1  
|Cost of instrument sales                                     |  |                                 | 120.0  |                                  |   | 135.3  |  |      | 338.9   |  |   | 419.8  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Total cost of sales                                          |  |                                 | 444.9  |                                  |   | 409.8  |  |      | 1,217.1 |  |   | 1,242.9
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Gross profit                                                 |  |                                 | 377.9  |                                  |   | 349.0  |  |      | 1,053.9 |  |   | 1,044.7
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Operating costs and expenses                                 |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Selling, general and administrative                          |  |                                 | 222.6  |                                  |   | 209.2  |  |      | 614.5   |  |   | 625.5  
|Research and development                                     |  |                                 | 71.7   |                                  |   | 74.8   |  |      | 192.3   |  |   | 215.2  
|Restructuring and acquisition related costs                  |  |                                 | 79.2   |                                  |   | 7.8    |  |      | 127.2   |  |   | 13.2   
|Environmental remediation                                    |  |                                 | -      |                                  |   | 19.0   |  |      | -       |  |   | 19.0   
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Total operating costs and expenses                           |  |                                 | 373.5  |                                  |   | 310.8  |  |      | 934.0   |  |   | 872.9  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Operating income                                             |  |                                 | 4.4    |                                  |   | 38.2   |  |      | 119.9   |  |   | 171.8  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Non-operating (income) expense                               |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Interest income                                              |  |                                 | (1.4)  |                                  |   | (2.4)  |  |      | (4.0)   |  |   | (8.6)  
|Interest expense                                             |  |                                 | 24.3   |                                  |   | 16.7   |  |      | 52.7    |  |   | 44.5   
|Other, net                                                   |  |                                 | (18.0) |                                  |   | (2.0)  |  |      | (24.9)  |  |   | (5.5)  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Total non-operating (income) expense                         |  |                                 | 4.9    |                                  |   | 12.3   |  |      | 23.8    |  |   | 30.4   
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Earnings (loss) before income taxes                          |  |                                 | (0.5)  |                                  |   | 25.9   |  |      | 96.1    |  |   | 141.4  
|Income tax provision (benefit)                               |  |                                 | (2.0)  |                                  |   | 1.8    |  |      | 13.2    |  |   | 30.5   
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Net earnings                                                 |  | $                               | 1.5    |                                  | $ | 24.1   |  | $    | 82.9    |  | $ | 110.9  
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Basic earnings per share                                     |  | $                               | 0.02   |                                  | $ | 0.38   |  | $    | 1.27    |  | $ | 1.76   
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Diluted earnings per share                                   |  | $                               | 0.02   |                                  | $ | 0.37   |  | $    | 1.26    |  | $ | 1.72   
|                                                             |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Weighted average number of shares outstanding (in thousands) |  |                                 |        |                                  |   |        |  |      |         |  |   |        
|Basic                                                        |  |                                 | 67,946 |                                  |   | 62,789 |  |      | 65,127  |  |   | 62,931 
|Diluted                                                      |  |                                 | 69,372 |                                  |   | 64,334 |  |      | 66,033  |  |   | 64,403 

See accompanying notes to Condensed Consolidated Financial Statements.



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BECKMAN COULTER, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions)

(unaudited)



|                                                                                      |  |                                  |           |      |   |        
|------------------------------------------------------------------------------------- |  | -------------------------------- | --------- | ---- | - | -------
|                                                                                      |  | Nine Months Ended  September 30,
|                                                                                      |  | 2009                             |           | 2008
|Cash flows from operating activities                                                  |  |                                  |           |      |   |        
|Net earnings                                                                          |  | $                                | 82.9      |      | $ | 110.9  
|Adjustments to reconcile net earnings to net cash provided by operating activities    |  |                                  |           |      |   |        
|Depreciation and amortization                                                         |  |                                  | 219.4     |      |   | 192.1  
|Provision for doubtful accounts receivable                                            |  |                                  | 2.4       |      |   | 6.6    
|Share-based compensation expense                                                      |  |                                  | 27.2      |      |   | 27.0   
|Gain on sales of building and land                                                    |  |                                  | -         |      |   | (5.1)  
|Accreted interest on convertible debt                                                 |  |                                  | 10.7      |      |   | 10.2   
|Amortization of pension and postretirement costs                                      |  |                                  | 18.7      |      |   | 7.6    
|U.S. pension trust contributions                                                      |  |                                  | (24.0)    |      |   | (8.2)  
|Deferred income taxes                                                                 |  |                                  | (11.1)    |      |   | 4.1    
|Changes in assets and liabilities, net of acquisitions                                |  |                                  |           |      |   |        
|Trade and other receivables                                                           |  |                                  | 35.1      |      |   | 18.8   
|Prepaids and other current assets                                                     |  |                                  | (19.8)    |      |   | (13.1) 
|Inventories                                                                           |  |                                  | (58.1)    |      |   | (57.4) 
|Accounts payable and accrued expenses                                                 |  |                                  | 97.6      |      |   | (29.5) 
|Income taxes payable                                                                  |  |                                  | 9.8       |      |   | (32.0) 
|Long-term lease receivables                                                           |  |                                  | 11.4      |      |   | 8.3    
|Other                                                                                 |  |                                  | -         |      |   | 3.6    
|                                                                                      |  |                                  |           |      |   |        
|Net cash provided by operating activities                                             |  |                                  | 402.2     |      |   | 243.9  
|                                                                                      |  |                                  |           |      |   |        
|Cash flows from investing activities                                                  |  |                                  |           |      |   |        
|Additions to property, plant and equipment                                            |  |                                  | (106.2)   |      |   | (56.4) 
|Additions to customer leased instruments                                              |  |                                  | (114.6)   |      |   | (146.8)
|Proceeds from sales of building and land                                              |  |                                  | -         |      |   | 7.4    
|Payments for technology licenses                                                      |  |                                  | (5.1)     |      |   | (2.2)  
|Payments for business acquisitions, net of cash acquired                              |  |                                  | (802.2)   |      |   | (10.8) 
|                                                                                      |  |                                  |           |      |   |        
|Net cash used in investing activities                                                 |  |                                  | (1,028.1) |      |   | (208.8)
|                                                                                      |  |                                  |           |      |   |        
|                                                                                      |  |                                 
|Cash flows from financing activities                                                  |  |                                  |           |      |   |        
|Dividends to stockholders                                                             |  |                                  | (33.4)    |      |   | (31.9) 
|Proceeds from issuance of stock                                                       |  |                                  | 319.2     |      |   | 67.4   
|Repurchase of common stock as treasury stock                                          |  |                                  | -         |      |   | (93.6) 
|Repurchase of common stock held in grantor trust                                      |  |                                  | (1.7)     |      |   | (1.3)  
|Excess tax benefits from share-based payment transactions                             |  |                                  | 5.4       |      |   | 11.6   
|Net borrowings on lines of credit                                                     |  |                                  | 0.1       |      |   | 18.6   
|Proceeds from issuance of long-term debt, net                                         |  |                                  | 497.8     |      |   | -      
|Debt repayments                                                                       |  |                                  | -         |      |   | (16.7) 
|Debt issuance costs                                                                   |  |                                  | (10.3)    |      |   | -      
|Equity issuance costs                                                                 |  |                                  | (11.8)    |      |   | -      
|                                                                                      |  |                                  |           |      |   |        
|Net cash provided by (used in) financing activities                                   |  |                                  | 765.3     |      |   | (45.9) 
|                                                                                      |  |                                  |           |      |   |        
|Effect of exchange rates on cash and cash equivalents                                 |  |                                  | 2.9       |      |   | (0.8)  
|                                                                                      |  |                                  |           |      |   |        
|Change in cash and cash equivalents                                                   |  |                                  | 142.3     |      |   | (11.6) 
|Cash and cash equivalents  beginning of period                                       |  |                                  | 120.0     |      |   | 83.0   
|                                                                                      |  |                                  |           |      |   |        
|Cash and cash equivalents  end of period                                             |  | $                                | 262.3     |      | $ | 71.4   
|                                                                                      |  |                                  |           |      |   |        
|Supplemental Information:                                                             |  |                                  |           |      |   |        
|Non-cash investing and financing activities                                           |  |                                  |           |      |   |        
|Liabilities incurred in connection with the purchase of property, plant and equipment |  | $                                | 10.1      |      | $ | 3.6    

See accompanying notes to Condensed Consolidated Financial Statements.



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BECKMAN COULTER, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(amounts in tables in millions, except amounts per share)

(unaudited)



|Note 1. | Nature of Business and Summary of Significant Accounting Policies
|------- | -----------------------------------------------------------------

Nature of Business

Beckman Coulter, Inc. (the Company,
we, our) is a leading manufacturer of biomedical testing instrument systems, tests and supplies that simplify and automate laboratory processes. Spanning the biomedical testing continuumfrom pioneering medical research
and clinical trials to laboratory diagnostics and point-of-care testingour installed base of systems provides essential biomedical information to enhance health care around the world. We are dedicated to improving patient health and reducing
the cost of care.

Our revenue is evenly distributed inside and outside of the United States (U.S.). Clinical
Diagnostics sales represented approximately 86% of our total revenue to date in 2009, with the balance coming from Life Science. Approximately 83% of our total revenue to date in 2009 was generated by recurring revenue from consumable supplies
(including reagent test kits), services and operating-type lease (OTL) payments. Central laboratories of mid-to large-size hospitals represent our most significant customer group.

Basis of Presentation

We
prepared the accompanying Condensed Consolidated Financial Statements following the requirements of the United States Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes or other financial
information normally required by generally accepted accounting principles in the United States of America (U.S. GAAP) have been condensed or omitted.

In June 2009, the Financial Accounting Standards Board, (FASB) issued Statement of Financial Accounting
Standards (SFAS) 168, The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles, (ASC 105-10). ASC 105-10 establishes the FASB Accounting Standards Codification (Codification or ASC), which officially launched July 1, 2009, and becomes the source
of authoritative U.S. GAAP recognized by the FASB. Rules and interpretive releases of the Securities and Exchange Commission (SEC) also are sources of authoritative U.S. GAAP for SEC registrants. The Codification supersedes all
then-existing non-SEC accounting and reporting standards. All other nongrandfathered non-SEC accounting literature not included in the Codification have become nonauthoritative. U.S. GAAP is not intended to be changed as a result of the FASBs
Codification project, but the project has changed the way guidance is organized and presented. The Codification is effective for financial statements issued for interim and annual periods ending after September 15, 2009. We have implemented the
Codification in this quarterly report by describing or referencing the Codification topics rather than the prior accounting literature references. There was no effect on our consolidated balance sheet, statements of earnings or cash flows as a
result of our implementation of the Codification.

Our financial statements include all normal and recurring adjustments that
we consider necessary for the fair presentation of our financial position and operating results. These Condensed Consolidated Financial Statements should be read in conjunction with the Consolidated Financial Statements and notes in our Annual
Report on Form 10-K for the year ended December 31, 2008.

Revenue, expenses, assets and liabilities can vary between the
quarters and our results of operations for the three and nine months ended September 30, 2009 do not necessarily indicate our operating results to be expected for the full year or any future period.

Use of Estimates

We follow
U.S. GAAP, which requires us to make estimates and assumptions about future events. These estimates and the underlying assumptions affect the reported amounts of assets, liabilities, revenue and expenses, and disclosures about contingent assets and
liabilities. Such estimates include the valuation of accounts receivable, inventories, long-lived assets, lives of customer leased instruments, lives of plant and equipment, lives of intangible assets, and assumptions used in the calculation of
warranty accruals, employee benefit plan obligations, environmental and litigation obligations, legal contingencies, taxes, share-based compensation and others. These estimates and assumptions are based on managements best estimates and
judgment and affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates. Management evaluates its estimates and assumptions on an ongoing basis using historical
experience and other factors, including the current economic environment, which management believes to be reasonable under the circumstances. We adjust such estimates and assumptions when facts and circumstances dictate. Illiquid credit markets,
volatile equity, foreign currency, energy markets, and



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declines in consumer spending have combined to increase the uncertainty inherent in such estimates and assumptions. As future events and their effects cannot be determined with precision, actual
results could differ significantly from these estimates. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future periods.

Income Taxes

At the end of
each interim reporting period, an estimate is made of the effective tax rate expected to apply to the full year. The estimated annual effective tax rate is used to determine the income tax rate for each applicable interim reporting period. The tax
effect of any tax law changes, final settlement of examinations with tax authorities and certain other events are reflected as discrete items in the interim reporting period in which they occur.

The effective tax rate for the three and nine months ended September 30, 2009 was 400.0% and 13.7% respectively. The effective tax rate
of 400.0% for the three months ended September 30, 2009 results from a small pretax loss coupled with a $2.0 million tax benefit in the quarter. This tax benefit results primarily from a decrease in the estimated annual effective tax rate
applied in the current quarter, resulting from the tax effect of various costs from the ODS acquisition. Discrete events arising in the three months ended September 30, 2009 also impacted the respective tax rates. Discrete events, which reduced
tax expense for the three months ended September 30, 2009 by $0.4 million, related to various adjustments to prior year tax credits and recognition of a deferred tax asset for a foreign net operating loss. Discrete events, which reduced tax
expense in the nine months ended September 30, 2009 by a net $13.7 million, related to settlement of various tax audits of prior years, claims for additional tax credits, changes in judgments for various uncertain tax positions in prior years,
offset by discrete items which increased tax expense related to changes in certain tax accounting methods.

The Company and
its domestic subsidiaries file federal, state and local income/franchise tax returns in the U.S. Our international subsidiaries file income tax returns in various non-U.S. jurisdictions. The audit of our U.S. federal income tax returns for 2004
and 2005 was closed in the first quarter 2009, which resulted in a reduction in our liabilities for uncertain tax positions of $7.8 million, which reduced income tax expense. Tax years 2006 through 2008 remain open to U.S. federal income tax
examination and an audit by the U.S. Internal Revenue Service (IRS) for 2006 and 2007 commenced in April 2009. In the third quarter, the IRS incorporated the 2008 tax year into their audit after the Company filed its 2008 federal income
tax return on September 15, 2009. The audit of our German subsidiarys tax returns for 2003 through 2005 was closed in the second quarter 2009, which resulted in a net reduction in our liabilities for uncertain tax positions of $3.5
million. We are no longer subject to state income tax examinations by tax authorities in our major state jurisdictions for years prior to 2004. The earliest tax years of our major international subsidiaries that are subject to non-U.S. income tax
examinations by tax authorities are: Switzerland, 1998; Hong Kong, 2002; Italy and the United Kingdom, 2004; Canada, 2005; France and Germany, 2006; and Japan, 2008.

During the first quarter of 2009, we filed certain tax accounting method changes with the IRS. As a result of these accounting method changes, certain tax deductions were accelerated and reflected in the
2008 federal income tax return, resulting in a net operating loss for that year. This loss has been carried back to the 2006 tax year and reduces taxes previously paid. In the second quarter of 2009 we received tax refunds related to the 2008 tax
year of $31.0 million as a result of these accounting method changes. As a result of the carryback of the 2008 net operating loss to 2006, we expect to receive a tax refund of $15.0 million for the 2006 tax year. In addition, the carryback of the
loss to 2006 freed up certain tax credits in that year which we carried forward to the 2007 tax year. We also carried back tax credits from 2008 to the 2007 tax year. These will result in an additional tax refund for the 2007 tax year of $20.0
million. Thus we expect a total of $35.0 million in additional tax refunds in the fourth quarter resulting from these accounting method changes. The acceleration of these tax deductions reduces certain permanent tax benefits in tax years 2008 and
2006. The impact of the reduction of these permanent tax benefits, totaling $3.4 million, was reflected as a discrete item in the tax provision for the nine months ended September 30, 2009.

We accrue interest and penalties where there is underpayment of taxes, based on managements best estimate of the amount ultimately to
be paid, in the same period that the interest would begin accruing or the penalties would first be assessed. Our policy on the classification of interest and penalties is to record both as part of interest expense which is consistent with the prior
year treatment. At September 30, 2009, we had $2.4 million in accrued interest and penalties for taxes. During the first nine months of 2009, we reversed $2.9 million of interest and penalties primarily as a result of the settlement of tax
audits.

The total amount of unrecognized tax benefits as of September 30, 2009 was $28.8 million, which if recognized,
would affect our effective tax rate in future periods.



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A number of years may elapse before an uncertain tax position is finally resolved. It is
difficult to predict the final outcome or the timing of resolution of any particular uncertain tax position. We reevaluate and adjust our reserves for income taxes, as well as the related interest, in light of changing facts and circumstances.
Settlement of any particular position would usually require the use of cash and result in the reduction of the related reserve. The resolution of a matter would be recognized as an adjustment to the provision for income taxes and effective tax rate
in the period of resolution. It is possible that our liability for uncertain tax positions could be reduced by as much as $4.0 million over the next 12 months as a result of the settlement of tax positions with various tax authorities.

Recently Adopted Accounting Standards

Subsequent Events

We evaluate for accounting and disclosure events that occur after the balance sheet date but
before financial statements are issued or are available to be issued (subsequent events). There are no such items to disclose.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly

In April 2009, the FASB issued additional guidance on estimating fair value when the volume and level of activity for an asset or
liability have decreased significantly in relation to normal market activity, as well as additional guidance on circumstances which may indicate a transaction is not orderly. This additional guidance (ASC 820-10-65) requires interim
disclosures of the inputs and valuation techniques used to measure fair value reflecting changes in the valuation techniques and related inputs. The adoption of ASC 820-10-65 as of June 30, 2009 did not have a material impact on our
consolidated financial position, results of operations and cash flows.

Accounting for Convertible Debt Instruments That May be Settled in
Cash Upon Conversion

Convertible debt securities that may be settled in cash (or other assets), including partial cash
settlement, are separated into a debt and equity component in accordance with ASC 470-20. The value assigned to the debt component as of the issuance date is the estimated fair value based on a similar debt instrument without the conversion feature.
The difference between the proceeds obtained for the securities and the estimated fair value assigned to the debt component represents the equity component. As a result, the debt is recorded at a discount reflecting its below market coupon interest
rate and is subsequently accreted to its par value over its expected life, using the rate of interest that reflects the market rate at issuance. This standard requires retrospective application and the new model for cash-settleable convertible
instruments applies to both new and previously issued instruments in current and comparative periods in fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We adopted this standard as of January 1,
2009.

In December 2006, we issued $600.0 million of convertible notes at a coupon rate of 2.5% (the Convertible
Notes). Upon the adoption of the guidance for debt with conversion options, we assigned an initial value of $493.8 million to the debt component of the Convertible Notes based on a similar debt instrument without the conversion feature. The
market rate of interest applied to determine that value was 5.59%. The difference between the proceeds obtained and the fair value of the debt component was assigned to the equity component. The debt discount is amortized over the initial term of
seven years, while the unamortized discount will be recognized over a remaining period of approximately five years. The Convertible Notes have a conversion feature that will allow the holders of the Convertible Notes to convert, in increments of
$1,000 principal, their investment into 13.4748 shares of our common stock (equivalent to a conversion price of approximately $74.21 per share of common stock, subject to adjustment). Interest cost for the period included the interest coupon of $3.8
million for the three months ended September 30, 2009 and 2008 and $11.3 million for the nine months ended September 30, 2009 and 2008, respectively. Also included within interest cost was amortization of the discount in the amount of $3.6
million and $3.5 million for the three months ended September 30, 2009 and 2008, respectively and $10.7 million and $10.2 million for the nine months ended September 30, 2009 and 2008, respectively. The adoption of this standard as of
January 1, 2009, was applied retrospectively and reduced net earnings by $2.0 million and diluted earnings per share by $0.04 for the three months ended September 30, 2008 and $5.9 million and $0.09 for the nine months ended
September 30, 2008. The cumulative effect of the change reduced January 1, 2009 retained earnings by $16.0 million.



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The following table sets forth the effect of the retrospective application of this standard
on certain previously reported line items:

Consolidated Statements of Earnings:



|                           |  |                                       |      |                                      |   |                                 |  |             |       |  |   |      
|-------------------------- |  | ------------------------------------- | ---- | ------------------------------------ | - | ------------------------------- |  | ----------- | ----- |  | - | -----
|                           |  | Three Months Ended September 30, 2008 |      | Nine Months Ended September 30, 2008
|                           |  | AsPreviously      Reported            |      | As Adjusted                          |   | As     Previously      Reported |  | As Adjusted
|Interest expense           |  | $                                     | 13.3 |                                      | $ | 16.7                            |  | $           | 34.5  |  | $ | 44.5 
|Income tax provision       |  | $                                     | 3.2  |                                      | $ | 1.8                             |  | $           | 34.5  |  | $ | 30.5 
|Net earnings               |  | $                                     | 26.1 |                                      | $ | 24.1                            |  | $           | 116.8 |  | $ | 110.9
|Basic earnings per share   |  | $                                     | 0.42 |                                      | $ | 0.38                            |  | $           | 1.86  |  | $ | 1.76 
|Diluted earnings per share |  | $                                     | 0.41 |                                      | $ | 0.37                            |  | $           | 1.81  |  | $ | 1.72 

Consolidated Balance Sheets:





|                                        |  |                            |         |             |   |        
|--------------------------------------- |  | -------------------------- | ------- | ----------- | - | -------
|                                        |  | December 31, 2008         
|                                        |  | AsPreviously      Reported |         | As Adjusted
|Long-term debt, less current maturities |  | $                          | 896.3   |             | $ | 819.0  
|Additional paid-in capital              |  | $                          | 559.2   |             | $ | 621.5  
|Deferred income tax assets              |  | $                          | 32.3    |             | $ | 1.3    
|Retained earnings                       |  | $                          | 1,397.6 |             | $ | 1,381.6

The following table provides additional information about our convertible notes:



|                                            |  |                       |       |                      |   |      
|------------------------------------------- |  | --------------------- | ----- | -------------------- | - | -----
|                                            |  | September 30,    2009 |       | December 31,    2008
|Principal amount of the liability component |  | $                     | 600.0 |                      | $ | 600.0
|Unamortized discount of liability component |  | $                     | 68.4  |                      | $ | 79.1 
|Net carrying amount of liability component  |  | $                     | 531.6 |                      | $ | 520.9
|Carrying amount of the equity component     |  | $                     | 103.7 |                      | $ | 103.7

Business Combinations

Effective January 1, 2009, we account for business combinations using the acquisition method of accounting. The acquisition method
requires an acquirer to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date, measured at their fair values as of that date. The provisions of the acquisition method related
to income tax adjustments apply to all business combinations regardless of consummation date. As a result of implementing the acquisition method, acquisition costs of $15.2 million and $30.9 million which included legal, accounting and investment
banking fees were expensed in the three and nine months ended September 30, 2009, respectively, in connection with the acquisitions of the diagnostic systems business of Olympus Corporation (the Olympus Diagnostics Systems Business
or ODS) and Cogenics. Additionally, severance liabilities associated with these acquisitions were expensed during the three and nine months ended September 30, 2009. Both acquisitions are further described in Note 2,
Acquisitions. Also, see Note 3, Restructuring Activities, Acquisition Related Costs and Asset Impairment Charges, for further discussion of these acquisition costs.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. This is an exit price concept for the valuation of the asset or liability. In addition, market participants are assumed to be buyers and sellers in the principal market for the asset or liability. Fair
value measurements for an asset assume the highest and best use by these market participants. As a result of these standards, we may be required to record assets which we do not intend to use or sell (defensive assets) and/or to value assets at fair
value measures that do not reflect our intended use of those assets. Many of these fair value measurements can be highly subjective and it is also possible that other professionals, applying reasonable judgment to the same facts and circumstances,
could develop and support a range of alternative estimated amounts.



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Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entitys Own Stock

We adopted the guidance in this standard to evaluate contracts in our own equity as of January 1, 2009. This standard
mandates a two-step process for evaluating whether an equity-linked financial instrument or embedded feature is indexed to the entitys own stock, including evaluating the instruments contingent exercise and settlement provisions. The
adoption of this standard as of January 1, 2009 did not have a material impact on our consolidated financial position, results of operations and cash flows. As further discussed in Note 11, Debt and Equity Financing, we
entered into forward sale agreements to sell equity to finance a portion of the acquisition of ODS. The forward sale agreements were considered indexed to the Companys own stock after being evaluated and appropriately classified as equity.

Determination of the Useful Life of Intangible Assets

The guidance in ASC 350-30 applies to recognized intangible assets that are accounted for pursuant to the acquisition method in business combinations. An entity must consider its own historical renewal or
extension experience in developing renewal or extension assumptions used in determining the useful life of a recognized intangible asset. In the absence of entity specific experience, an entity must consider assumptions that a marketplace
participant would use about renewal or extension that are consistent with the highest and best use of the asset by a marketplace participant. The intent of this standard is to improve the consistency between the useful life of a recognized
intangible asset under the acquisition method for business combinations and the period of expected cash flows used to measure the fair value of the asset. In addition, this guidance increases the disclosure requirements related to renewal or
extension assumptions. This standard applies prospectively to all intangible assets acquired after the effective date of January 1, 2009. The adoption of ASC 350-30 had no effect on our consolidated financial position, results of operations and
cash flows.

Application of Fair Value Measurements

In February 2008, the FASB issued ASC 820-10 which delayed the effective date of the guidance for fair value measurements for non-financial assets and non-financial liabilities, except for items that are
recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), until fiscal years beginning after November 15, 2008. On January 1, 2009, we adopted the provisions of this standard as it relates
to nonrecurring fair value measurement requirements for non-financial assets and liabilities. Assets and liabilities acquired as part of the ODS acquisition were recorded at fair value in accordance with the acquisition method of accounting. See
Note 2, Acquisitions, for further details.

New Accounting Standards Not Yet Adopted

Revenue Arrangements with Multiple Deliverables

In October 2009, the FASB ratified Accounting Standards Update (ASU) 2009-13, Revenue Arrangements with Multiple Deliverables (ASU 2009-13), which requires
companies to allocate revenue in arrangements involving multiple deliverables based on the estimated selling price of each deliverable, even though such deliverables are not sold separately either by the company itself or other vendors. ASU 2009-13
eliminates the requirement that all undelivered elements must have objective and reliable evidence of fair value before a company can recognize the portion of the overall arrangement fee that is attributable to items that already have been
delivered. As a result, the new guidance may allow some companies to recognize revenue on transactions that involve multiple deliverables earlier than under current requirements. ASU 2009-13 will be effective for us beginning in the first quarter of
fiscal year 2011. Early adoption is permitted. We are currently evaluating the requirements of the standard on our consolidated financial position, results of operations and cash flows.

Certain Revenue Arrangements That Include Software Elements

In October
2009, the FASB issued ASU No. 2009-14, Certain Revenue Arrangements That Include Software Elementsa consensus of the FASB Emerging Issues Task Force (ASU 2009-14), that reduces the types of
transactions that fall within the current scope of software revenue recognition guidance. Existing software revenue recognition guidance requires that its provisions be applied to an entire arrangement when the sale of any products or services
containing or utilizing software when the software is considered more than incidental to the product or service. As a result of the amendments included in ASU No. 2009-14, many tangible products and services that rely on software will be accounted
for under the multiple-element arrangements revenue recognition guidance rather than under the software revenue recognition guidance. Under the ASU, the following components would be excluded from the scope of software revenue recognition guidance:
the tangible element of the product, software products bundled with tangible products where the software components and non-software components function together to deliver the products essential functionality, and undelivered components that
relate to software that is essential to the tangible products functionality. The ASU also provides guidance on how to allocate transaction consideration when an arrangement contains both deliverables within the scope of software revenue
guidance (software deliverables) and deliverables not within the scope of that guidance (non-software deliverables). ASU No. 2009-14 will be effective for us beginning January 1, 2011. We may elect to adopt the provisions prospectively to new or
materially modified arrangements beginning on the effective date or retrospectively for all periods presented. However, we must elect the same transition method for this guidance as that chosen for ASU No. 2009-13. We are currently evaluating the
impact of this standard on our consolidated financial position, results of operations and cash flows.

Accounting for Transfers of
Financial Assets

In June 2009, the FASB issued Accounting for Transfers of Financial Assets (ASC
860-10 to 50). This guidance removes the concept of a qualifying special-purpose entity (QSPE) from Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities (ASC 860-10 to
50) and removes the exception from applying Consolidation of Variable Interest Entities (ASC 810-10). This guidance also clarifies the requirements for isolation and limitations on portions of financial assets that are
eligible for sale accounting. This guidance is effective for fiscal years beginning after November 15, 2009. We are currently evaluating the impact, if any, of the adoption of this standard on our consolidated financial position, results of
operations and cash flows.



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Change in Presentation

We have a hedging program to reduce the risk of foreign currency changes on cash flows generated from intercompany inventory purchases. In the first quarter of 2009, our results of operations were
impacted more significantly by currency changes, a portion of which was offset by the results of our hedging program. To reflect this net currency impact on our operating results, we have reclassified our gains and losses related to cash flow
hedging activities and foreign currency transactions to cost of sales from non-operating income or expense for all periods presented. The amounts reclassified for the prior periods were not material.



|Note 2. | Acquisitions
|------- | ------------

Olympus Diagnostics
Systems Business

We entered into a master purchase agreement with Olympus Corporation, which we also refer to as Olympus,
dated February 27, 2009, to acquire ODS. On August 3, 2009 (Tokyo time), we completed the ODS acquisition through a cash payment of approximately 76 billion Japanese yen (approximately U.S. $800 million based on currency exchange rates as
of August 3, 2009). The final purchase price is subject to determination of the final closing net assets.

Olympus is a
Tokyo-headquartered precision technology company that creates opto-digital solutions in healthcare, life science and consumer electronic products. The Diagnostic Systems Business encompasses the development, manufacturing, marketing, sale,
distribution and use of clinical chemistry and immunoassay analyzers, blood transfusion testing systems, and the chemical reagents and other consumables used with them, and related laboratory automation equipment, for in vitro diagnostic
testing of samples from humans and animals. The completion of this transaction adds considerable product depth and significantly expands our geographic reach and increases scale in certain regions. We expect the ODS business to fill some important
gaps in our product line, in both the high-throughput and low-throughput segments. Additionally, we have had success selling immunoassay to our chemistry customers. We have the same opportunity to continue our above-market growth in immunoassay by
selling our immunoassay products to an entirely new base of loyal ODS chemistry customers. Our strength in total lab automation should be complemented by ODS strong pre-analytical automation position in Europe and Asia. Customers should
benefit from the expanded range of products, particularly those large hospital and university laboratories where higher throughput systems are preferred. This acquisition is classified as part of our Clinical Diagnostics business segment.

On February 27, 2009, we also entered into forward contracts with various banks covering the full amount of the purchase
price in order to hedge the risk of changes in the exchange rate of the Japanese yen versus the U.S. dollar between the signing and closing of the ODS acquisition. The forward contracts transaction effectively fixed the U.S. dollar cost of the
transaction at $780 million U.S. dollars. See Note 4, Derivatives, for further discussion. The acquisition was accounted for at the currency exchange rate in effect at the time the transaction was closed on August 3, 2009
(Tokyo time), which amounted to $800 million. A $19.6 million gain on the settlement of the forward contract was recorded in non-operating income for the nine months ended September 30, 2009.

The ODS acquisition is accounted for under the acquisition method of accounting in accordance with the accounting standards for business
combinations. Accordingly, we have estimated the fair values of the tangible and intangible assets acquired and liabilities assumed at the August 3, 2009 acquisition date. Our fair value estimates for the purchase price allocation may change
during the allowable allocation period, which is up to one year from the acquisition date, if additional information becomes available. The initial accounting for the business combination is not complete until, among other things, the final closing
net asset adjustment has been completed. The provisional amounts recognized are subject to revision as more detailed analysis is completed and additional information is obtained about the facts and circumstances that existed as of the acquisition
date.



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The following table summarizes the preliminary estimated fair values assigned to the net
assets acquired, including cash acquired of $14.5 million, as of the August 3, 2009 acquisition date:



|                                                              |  |   |       |                       |            
|------------------------------------------------------------- |  | - | ----- | --------------------- | -----------
|(In millions)                                                 |  |   |       | Range of Useful Lives
|Purchase Price                                                |  | $ | 800.3 |                       |            
|                                                              |  |   |       |                       |            
|Assets                                                        |  |   |       |                       |            
|Cash and cash equivalents                                     |  | $ | 14.5  |                       |            
|Accounts receivable                                           |  |   | 118.9 |                       |            
|Inventories                                                   |  |   | 103.1 |                       |            
|Intangible assets subject to amortization:                    |  |   |       |                       |            
|Trade names                                                   |  |   | 7.9   |                       | 5 8 years 
|Developed technology                                          |  |   | 100.3 |                       | 4 8 years 
|In-process research and development                           |  |   | 10.2  |                       |            
|Customer and dealer relationships                             |  |   | 71.5  |                       | 6 10 years
|Property, plant and equipment and customer leased instruments |  |   | 146.1 |                       | 3 30 years
|Deferred tax assets, net                                      |  |   | 5.5   |                       |            
|Other assets                                                  |  |   | 28.8  |                       |            
|                                                              |  |   |       |                       |            
|Total Assets Acquired                                         |  | $ | 606.8 |                       |            
|                                                              |  |   |       |                       |            
|                                                              |  |  
|Liabilities                                                   |  |   |       |                       |            
|Accounts payable                                              |  | $ | 61.3  |                       |            
|Accrued expenses                                              |  |   | 32.2  |                       |            
|Other liabilities                                             |  |   | 33.0  |                       |            
|                                                              |  |   |       |                       |            
|Total Liabilities Assumed                                     |  | $ | 126.5 |                       |            
|                                                              |  |   |       |                       |            
|Goodwill                                                      |  | $ | 320.0 |                       |            
|                                                              |  |   |       |                       |            

Assets include accounts receivable with a preliminary fair value of
$118.9 million and gross contractual amounts receivable of $122.5 million. We estimate that accounts receivable of $5.3 million will not be collected.

Goodwill largely consists of expected synergies resulting from the acquisition. The Company also anticipates that the transaction will produce significant growth synergies through the application of each
product lines innovative technologies and as a result of the combined businesses broader product portfolio in key geographies that have strong global growth rates. Goodwill also includes the assembled workforce of the ODS business, which
does not qualify for separate recognition as an intangible asset.

Supplemental Pro Forma Information

Since the acquisition date, the ODS acquisition has contributed $65.1 million of operating revenues and a pretax loss of $4.8 million to our
consolidated results. Excluded from pretax loss is $8.8 million of increased cost of sales associated with ODS products as a result of the roll-out of the fair value adjustment to inventory recorded in connection with the acquisition accounting.

The following supplemental pro forma information presents the results of operations as if the ODS acquisition had occurred at
the beginning of the respective reporting periods:



|                   |  |                                  |       |                                 |   |       |  |      |         |  |   |        
|------------------ |  | -------------------------------- | ----- | ------------------------------- | - | ----- |  | ---- | ------- |  | - | -------
|                   |  | Three Months Ended September 30, |       | Nine Months Ended September 30,
|                   |  | 2009                             |       | 2008                            |   | 2009  |  | 2008
|Total revenue      |  | $                                | 869.7 |                                 | $ | 894.6 |  | $    | 2,575.7 |  | $ | 2,684.9
|Net earnings       |  | $                                | 43.6  |                                 | $ | 25.7  |  | $    | 155.4   |  | $ | 120.8  
|Earnings per share |  |                                  |       |                                 |   |       |  |      |         |  |   |        
|Basic              |  | $                                | 0.63  |                                 | $ | 0.38  |  | $    | 2.26    |  | $ | 1.79   
|Diluted            |  | $                                | 0.62  |                                 | $ | 0.37  |  | $    | 2.24    |  | $ | 1.75   

The supplemental pro forma information has been adjusted to include the pro forma
impact of amortization of intangible assets and depreciation of property, plant and equipment, based on the preliminary purchase price allocations. Furthermore, the pro forma net earnings also contemplates the impact of additional interest expense
associated with the financing of the acquisition but excludes acquisition, integration, restructure costs and foreign exchange gains related to the ODS acquisition. The additional cost of sales as a result of the roll-out of the fair value
adjustment to inventory is also excluded as those are not ongoing costs. The pro forma results are presented for illustrative purposes only and do not reflect the realization of potential cost savings, or any related acquisition or integration
costs. Certain cost savings may result from the acquisition; however, there can be no assurance that these cost savings will be achieved. These pro forma results do not purport to be indicative of the results that would have actually been obtained
if the acquisition occurred at the beginning of the respective reporting periods, nor is the pro forma data intended to be a projection of future results.

The supplemental pro forma information for the nine months ended September 30, 2008 combines our historical results for the nine months ended September 30, 2008 with the ODS results for the nine months
ended December 31, 2008. The ODS results for the nine months ended December 31, 2008 were used because periods prior to the nine months beginning April 1, 2008 have not been converted to U.S. GAAP. We believe that the results using the nine months
ended December 31, 2008 would not be materially different from the results using the nine months ended September 30, 2008.



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Cogenics

On April 14, 2009, we entered into a stock purchase agreement with Clinical Data Inc. (CDI) to acquire Cogenics, the genomics division of Clinical Data Inc. for $16.4 million. The
Cogenics business includes DNA and RNA extraction, genotyping and gene expression, as well as multiple applications of Quantitative Polymerase Chain Reaction (QPCR) and services for cell bank characterization and biorepository, in both
research and regulated environments. In the third quarter of 2009, we recorded an additional deferred tax asset with a reduction to goodwill of $5.4 million. The measurement period associated with the acquisition is now closed. We have not provided
pro forma results since the acquisition was not deemed significant.



|Note 3. | Restructuring Activities, Acquisition Related Costs, and Asset Impairment Charges
|------- | ---------------------------------------------------------------------------------

Restructuring Activities

Restructuring actions and exit activities
generally include significant actions involving employee-related severance charges, contract termination costs, and impairment of assets associated with such actions.

Employee-related severance charges are largely based upon distributed employment policies and substantive severance plans and are reflected in the quarter in which management approves the associated
actions. Severance amounts for which affected employees were required to render service in order to receive benefits at their termination dates were measured at the date such benefits were communicated to the applicable employees and recognized as
expense over the employees remaining service periods.

Contract termination and other charges primarily reflect costs to
terminate a contract before the end of its term (measured at fair value at the time the Company provided notice to the counterparty) or costs that will continue to be incurred under the contract for its remaining term without economic benefit to the
Company. Asset impairment charges related to property, plant and equipment reflect the excess of the assets carrying values over their fair values.

Total Restructuring Charges

For the three and nine months ended
September 30, 2009, we recorded restructuring charges of $53.6 million and $80.0 million, respectively and $7.8 million and $13.2 million (net of $3.2 million gain on sale of building and land in Hialeah, Florida), respectively for the three
and nine months ended September 30, 2008. These charges related to severance, relocation, asset impairment and other exit costs which were included within the restructuring and acquisition related costs line of our condensed consolidated
statement of earnings. From January 2007 through the third quarter of 2009, we incurred a total of $119.0 million of net restructuring charges of which $51.3 million relates to severance costs. In addition, we incurred a charge of $19.0 million in
the third quarter of 2008 for the remediation of environmental contamination as further described in Note 14, Commitments and Contingencies.

Following is a detailed description of charges included in restructuring activities:

Supply
Chain Initiatives

During the first and third quarters of 2009, as part of our supply chain initiatives, we announced the
closure and relocation of certain manufacturing and distribution sites. Additionally, during 2008, we announced our intent to vacate our Fullerton, California facility and consolidate those operations to other existing facilities (Orange
County consolidation project). As part of these relocations, during the three and nine months ended September 30, 2009, we incurred severance and other relocation charges of $8.0 and $32.7 million, respectively.

Diagnostics Systems Business

In connection with the ODS acquisition, we incurred severance costs of $20.5 million due to redundancies as part of combining the two entities. Furthermore, we discontinued our DXC 500 project which was a development project for a low-end
throughput chemistry analyzer since it will be replaced with the AU480 product line which we acquired from Olympus. We incurred a $14.2 million vendor cancellation fee associated with the discontinuation of this project during the third quarter of
2009. Lastly, as a result of our decision to discontinue the Immunoassay business acquired as part of the ODS acquisition, we recorded $6.1 million associated with the write down of certain assets and accrual of purchase commitments.

Asset Impairment Charges

During the three and nine months ended September 30, 2009 we incurred asset impairment charges of $4.3 million and $5.9 million, respectively. In connection with the cancellation of the DXC500 project described above, asset impairments
of $3.5 million were recognized during the three months ended September 30, 2009. We also incurred asset impairment charges associated with our consolidation effort to close and relocate other facilities and relocate operations of $0.8 million
and $2.4 million during the three and nine months ended September 30, 2009.

The following is a reconciliation of the
accrual for employee severance and other related costs included in accrued expenses in the Condensed Consolidated Balance Sheet at September 30, 2009:



|                              |  |   |       
|----------------------------- |  | - | ------
|Balance at December 31, 2008  |  | $ | 10.2  
|Additional charges            |  |   | 80.0  
|Cash payments in 2009         |  |   | (29.4)
|                              |  |   |       
|Balance at September 30, 2009 |  | $ | 60.8  
|                              |  |   |       

Acquisition Related Costs

In connection with the ODS acquisition, we incurred acquisition related and integration costs of $23.7 million and $44.4 million during the
three and nine months ended September 30, 2009. A significant portion of these expenses were related to legal, consulting and investment banking fees.



13



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As to our Cogenics acquisition, we incurred $1.8 million and $2.8 million of acquisition
related and integration costs during the three and nine months ended September 30, 2009, respectively.

These charges are
included within the restructuring and acquisition related costs line of our condensed consolidated statement of earnings.



|Note 4. | Derivatives
|------- | -----------

We use
derivative financial instruments to hedge foreign currency and interest rate exposures. Our objectives for holding derivatives are to minimize currency and interest rate risks using the most effective methods to eliminate or reduce the impacts of
these exposures. We do not speculate in derivative instruments to profit from foreign currency exchange or interest rate fluctuations nor do we enter into trades for which there are no underlying exposures. The following discusses in more detail our
foreign currency and interest rate exposures and related derivative instruments.

Foreign Currency

We manufacture our products principally in the U.S., but generated approximately 50% of our revenue during the first nine months of 2009 from
sales made outside the U.S. by our international subsidiaries. Revenues generated by our international subsidiaries generally are denominated in the subsidiarys local currency, thereby exposing us to the risk of foreign currency fluctuations.
To mitigate the impact of changes in foreign currency exchange rates, we use derivative financial instruments (or foreign currency contracts) to hedge the foreign currency exposure resulting from intercompany cash flows associated with
intercompany inventory purchases by our international subsidiaries through their anticipated cash settlement date. These foreign currency contracts include forward and option contracts and are designated as cash flow hedges. The major currencies
against which we hedge are the Euro, Japanese yen, Australian dollar, British Pound Sterling and Canadian dollar.

We
also use foreign currency forward contracts to offset the effect of changes in value of loans between subsidiaries and do not designate these derivative instruments as accounting hedges.

The forward contracts that we entered into in connection with the ODS acquisition, as further described in Note 2, did not qualify as a cash
flow hedge under applicable accounting pronouncements, therefore, we recognized fair value gains of $10.9 million and $19.6 million during the three and nine months ended September 30, 2009, respectively which are reflected within the
non-operating (income) expense line of our consolidated statements of earnings.

Hedge ineffectiveness associated with our
cash flow hedges was immaterial and no cash flow hedges were discontinued in the three and nine months ended September 30, 2009 and 2008.

Derivative gains and losses on effective hedges included in accumulated other comprehensive loss are reclassified into cost of sales upon the recognition of the hedged transaction. We estimate that
substantially all of the $9.7 million of unrealized loss ($5.9 million after tax) included in accumulated other comprehensive loss at September 30, 2009 will be reclassified to cost of sales within the next twelve months. The actual amounts
that will be reclassified to earnings over the next twelve months will vary from this amount as a result of changes in market rates. As of September 30, 2009 and December 31, 2008, the notional amounts of all derivative foreign exchange
contracts were $593.7 million and $257.8 million respectively. We have cash flow hedges at September 30, 2009, which settle as late as December 16, 2010.

The following table presents the fair value of derivative instruments within the consolidated balance sheet:



|                                                    |  |                        |                   |                   |                  |                        |   |                       |  |                             |  |   |     |  |   |    
|--------------------------------------------------- |  | ---------------------- | ----------------- | ----------------- | ---------------- | ---------------------- | - | --------------------- |  | --------------------------- |  | - | --- |  | - | ---
|                                                    |  | Balance Sheet Location |                   | Asset Derivatives |                  | Balance Sheet Location |   | Liability Derivatives
|                                                    |  |                        | September 30,2009 |                   | December 31,2008 |                        |   | September 30,2009     |  | December 31,2008           
|Derivatives designated as hedging Instruments       |  |                        |                   |                   |                  |                        |   |                       |  |                             |  |   |     |  |   |    
|Foreign exchange forwards and options               |  | Other current assets   |                   | $                 | 5.3              |                        | $ | 27.2                  |  | Other current liabilities   |  | $ | 5.7 |  | $ | -  
|                                                    |  |                        |                   |                   |                  |                        |   |                       |  |                             |  |   |     |  |   |    
|Foreign exchange forwards                           |  | Other long term assets |                   |                   | 3.7              |                        |   | -                     |  | Other long term liabilities |  |   | 2.6 |  |   | 1.5
|                                                    |  |                        |                   |                   |                  |                        |   |                       |  |                             |  |   |     |  |   |    
|Total derivatives designated as hedging instruments |  |                        |                   | $                 | 9.0              |                        | $ | 27.2                  |  |                             |  | $ | 8.3 |  | $ | 1.5
|                                                    |  |                        |                   |                   |                  |                        |   |                       |  |                             |  |   |     |  |   |    



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The following tables present the amounts affecting the consolidated financial statements:



|                                               |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|---------------------------------------------- |  | ------------------------------------------------------------------------- | ------ | --------------------------------------------------------------------------------- | - | ------------------------------------------------------------------------------------ |  | ------------- |  | ---- | ---- |  | - | ---
|                                               |  | Amount of (Loss) GainRecognizedin OtherComprehensiveIncome on Derivatives |        | Location ofGainReclassifiedFromAccumulatedOtherComprehensiveLoss intoNet Earnings |   | Amount of GainsReclassified FromAccumulated OtherComprehensiveLoss into Net
Earnings
|                                               |  | Three Months Ended September 30,                                          |        |                                                                                   |   | Three Months Ended September 30,                                                    
|                                               |  | 2009                                                                      |        | 2008                                                                              |   |                                                                                      |  | 2009          |  | 2008
|Derivatives in Cash Flow Hedging Relationships |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|                                               |  |                                                                           |        |                                                                                   |  
|Foreign exchange forwards and options          |  | $                                                                         | (9.5)  |                                                                                   | $ | 8.4                                                                                  |  | Cost of sales |  | $    | 1.5  |  | $ | 2.9
|                                               |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|                                               |  |                                                                           |        |                                                                                   |  
|Total                                          |  | $                                                                         | (9.5)  |                                                                                   | $ | 8.4                                                                                  |  |               |  | $    | 1.5  |  | $ | 2.9
|                                               |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|                                               |  |                                                                           |       
|                                               |  | Amount of (Loss) GainRecognizedin OtherComprehensiveIncome on Derivatives |        | Location ofGainReclassifiedFromAccumulatedOtherComprehensiveLoss intoNet Earnings |   | Amount of GainsReclassified FromAccumulated OtherComprehensiveLoss into Net
Earnings
|                                               |  | Nine Months Ended September 30,                                           |        |                                                                                   |   | Nine Months Ended September 30,                                                     
|                                               |  | 2009                                                                      |        | 2008                                                                              |   |                                                                                      |  | 2009          |  | 2008
|Derivatives in Cash Flow Hedging Relationships |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|                                               |  |                                                                           |        |                                                                                   |  
|Foreign exchange forwards and options          |  | $                                                                         | (15.2) |                                                                                   | $ | 4.5                                                                                  |  | Cost of sales |  | $    | 14.2 |  | $ | 9.1
|                                               |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    
|                                               |  |                                                                           |        |                                                                                   |  
|Total                                          |  | $                                                                         | (15.2) |                                                                                   | $ | 4.5                                                                                  |  |               |  | $    | 14.2 |  | $ | 9.1
|                                               |  |                                                                           |        |                                                                                   |   |                                                                                      |  |               |  |      |      |  |   |    



|                                                  |  |                                                           |  |                                               |      |      |   |  
|------------------------------------------------- |  | --------------------------------------------------------- |  | --------------------------------------------- | ---- | ---- | - | -
|                                                  |  | Location of Gain Recognized in NetEarnings on Derivatives |  | Amount of Gains in NetEarnings on
Derivatives
|                                                  |  |                                                           |  | Three Months Ended September 30,             
|                                                  |  |                                                           |  | 2009                                          |      | 2008
|Derivatives not designated as hedging instruments |  |                                                           |  |                                               |      |      |   |  
|                                                  |  |                                                           | 
|Foreign exchange forwards                         |  | Other non-operating income                                |  | $                                             | 10.9 |      | $ | -
|                                                  |  |                                                           |  |                                               |      |      |   |  
|                                                  |  |                                                           | 
|Total                                             |  |                                                           |  | $                                             | 10.9 |      | $ | -
|                                                  |  |                                                           |  |                                               |      |      |   |  
|                                                  |  |                                                          
|                                                  |  | Location of Gain Recognized in NetEarnings on
Derivatives |  | Amount of Gains in NetEarnings on
Derivatives
|                                                  |  |                                                           |  | Nine Months Ended September 30,              
|                                                  |  |                                                           |  | 2009                                          |      | 2008
|Derivatives not designated as hedging instruments |  |                                                           |  |                                               |      |      |   |  
|                                                  |  |                                                           | 
|Foreign exchange forwards                         |  | Other non-operating income                                |  | $                                             | 19.6 |      | $ | -
|                                                  |  |                                                           |  |                                               |      |      |   |  
|                                                  |  |                                                           | 
|Total                                             |  |                                                           |  | $                                             | 19.6 |      | $ | -
|                                                  |  |                                                           |  |                                               |      |      |   |  



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The bank counterparties to the foreign exchange forward contracts expose us to
credit-related losses in the event of their nonperformance. To help mitigate that risk, we only contract with counterparties that meet certain minimum requirements under our counterparty risk assessment process. The Company monitors ratings and
potential downgrades on at least a quarterly basis. Based on our on-going assessment of counterparty risk, we will adjust our exposure to various counterparties as deemed necessary.



|Note 5. | Fair Value Measurements
|------- | -----------------------

The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis at September 30, 2009 and indicates the fair value hierarchy of the valuation techniques we
utilize to determine such fair value:



|                                    |  |                                |  |                                                             |  |                                            |  |                                       
|----------------------------------- |  | ------------------------------ |  | ----------------------------------------------------------- |  | ------------------------------------------ |  | --------------------------------------
|                                    |  |                                |  | Fair Value Measurements at Reporting Date Using            
|Description of assets (liabilities) |  | Fair Valueat September 30,2009 |  | Quoted Prices inActive Marketsfor IdenticalAssets (Level 1) |  | Significant OtherObservableInputs(Level 2) |  | SignificantUnobservableInputs(Level 3)
|Derivatives                         |  |                                |  |                                                             |  |                                            |  |                                       
|Forward contracts                   |  | $    (2.2)                     |  | -                                                           |  | $    (2.2)                                 |  | -                                     
|Option contracts                    |  | $     3.0                      |  | -                                                           |  | $     3.0                                  |  | -                                     

In general, fair values determined by Level 1 inputs utilize quoted prices
(unadjusted) in active markets for identical assets or liabilities. Fair values determined by Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. Fair values determined by Level 3
inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability.

Our financial liabilities have been classified as Level 2. These derivative contracts have been valued initially at the transaction price and valued subsequently using market data including quotes,
benchmark yields, spot rates, and other industry and economic events. See Note 4, Derivatives, for further discussion on derivative financial instruments.

When necessary, we validate our valuation techniques by understanding the models used and obtaining market values from pricing sources.

The carrying values of our financial instruments approximate their fair value at September 30, 2009, except for long-term
debt. Quotes from financial institutions are used to determine market values of our debt and derivative financial instruments. The carrying value and fair value of our long-term debt at September 30, 2009 was $1,332.9 million and $1,486.4 million.



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|Note 6. | Comprehensive Income
|------- | --------------------

The
reconciliation of net earnings to comprehensive income is as follows:



|                                                                                                                                                                                                                                                                                                                      |  |                                 |       |                                |   |        |  |      |       |  |   |       
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------- | ----- | ------------------------------ | - | ------ |  | ---- | ----- |  | - | ------
|                                                                                                                                                                                                                                                                                                                      |  | Three Months EndedSeptember 30, |       | Nine Months EndedSeptember 30,
|                                                                                                                                                                                                                                                                                                                      |  | 2009                            |       | 2008                           |   | 2009   |  | 2008
|Net earnings                                                                                                                                                                                                                                                                                                          |  | $                               | 1.5   |                                | $ | 24.1   |  | $    | 82.9  |  | $ | 110.9 
|                                                                                                                                                                                                                                                                                                                      |  |                                 |       |                                |   |        |  |      |       |  |   |       
|Other comprehensive income                                                                                                                                                                                                                                                                                            |  |                                 |       |                                |   |        |  |      |       |  |   |       
|Foreign currency translation adjustments                                                                                                                                                                                                                                                                              |  |                                 | 27.1  |                                |   | (67.3) |  |      | 39.7  |  |   | (21.2)
|Net actuarial gains associated with pension and other postretirement benefits, net of income taxes $(14.4) and $(3.5) for the
nine months ended September 30, 2009 and September 30, 2008, respectively                                                                                                               |  |                                 | -     |                                |   | -      |  |      | 23.4  |  |   | 5.4   
|Amortization of prior service cost and unrecognized gains and losses included in net periodic benefit cost, net of income taxes
of $(2.3) and $(6.9) for the three and nine months ended September 30, 2009, respectively, and $(1.1) and $(2.9) for the three and nine months ended September 30, 2008, respectively |  |                                 | 3.9   |                                |   | 1.5    |  |      | 11.8  |  |   | 4.7   
|Derivatives qualifying as hedges:                                                                                                                                                                                                                                                                                     |  |                                 |       |                                |   |        |  |      |       |  |   |       
|Net derivative losses, net of income taxes of $3.6 and $5.8 for the three and nine months ended September 30, 2009,
respectively, and $(3.2) and $(1.7) for the three and nine months ended September 30, 2008, respectively                                                                                          |  |                                 | (5.9) |                                |   | 5.2    |  |      | (9.4) |  |   | 2.8   
|Reclassifications to cost of sales, net of income taxes of $0.6 and $5.4 for the three and nine months ended September 30,
2009, respectively, and $(1.1) and $(3.5) for the three and nine months ended September 30, 2008, respectively                                                                             |  |                                 | (0.9) |                                |   | 1.8    |  |      | (8.8) |  |   | 5.6   
|                                                                                                                                                                                                                                                                                                                      |  |                                 |       |                                |   |        |  |      |       |  |   |       
|Other comprehensive income                                                                                                                                                                                                                                                                                            |  |                                 | 24.2  |                                |   | (58.8) |  |      | 56.7  |  |   | (2.7) 
|                                                                                                                                                                                                                                                                                                                      |  |                                 |       |                                |   |        |  |      |       |  |   |       
|Total comprehensive income                                                                                                                                                                                                                                                                                            |  | $                               | 25.7  |                                | $ | (34.7) |  | $    | 139.6 |  | $ | 108.2 
|                                                                                                                                                                                                                                                                                                                      |  |                                 |       |                                |   |        |  |      |       |  |   |       

The components of accumulated other comprehensive loss, net of income taxes, are as
follows:



|                                                            |  |                   |         |                  |   |        
|----------------------------------------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                                                            |  | September 30,2009 |         | December 31,2008
|Cumulative currency translation adjustments                 |  | $                 | 130.2   |                  | $ | 90.5   
|Pension and other postretirement plan liability adjustments |  |                   | (267.4) |                  |   | (302.6)
|Net unrealized gain on derivative instruments               |  |                   | (5.9)   |                  |   | 12.3   
|                                                            |  |                   |         |                  |   |        
|Total accumulated other comprehensive loss                  |  | $                 | (143.1) |                  | $ | (199.8)
|                                                            |  |                   |         |                  |   |        



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|Note 7. | Earnings Per Share
|------- | ------------------

The
following is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per share (EPS):





|                                                                                       |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|-------------------------------------------------------------------------------------- |  | -------------------------------- | ---- | ------ | ------ | --------------- | - | ----------- |  | ------ | ----- | --------------- | ------ |  | - | ------
|                                                                                       |  | Three Months Ended September 30,
|                                                                                       |  | 2009                             |      | 2008  
|                                                                                       |  | NetEarnings                      |      | Shares |        | Per ShareAmount |   | NetEarnings |  | Shares |       | Per ShareAmount
|Basic EPS:                                                                             |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Net earnings                                                                           |  | $                                | 1.5  |        | 67.946 |                 | $ | 0.02        |  | $      | 24.1  |                 | 62.789 |  | $ | 0.38  
|Effect of dilutive stock options, non-vested equity shares and share units outstanding |  |                                  | -    |        | 1.426  |                 |   | -           |  |        | -     |                 | 1.545  |  |   | (0.01)
|                                                                                       |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Diluted EPS:                                                                           |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Net earnings                                                                           |  | $                                | 1.5  |        | 69.372 |                 | $ | 0.02        |  | $      | 24.1  |                 | 64.334 |  | $ | 0.37  
|                                                                                       |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|                                                                                       | 
|                                                                                       |  | Nine Months Ended September 30, 
|                                                                                       |  | 2009                             |      | 2008  
|                                                                                       |  | NetEarnings                      |      | Shares |        | Per ShareAmount |   | NetEarnings |  | Shares |       | Per ShareAmount
|Basic EPS:                                                                             |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Net earnings                                                                           |  | $                                | 82.9 |        | 65.127 |                 | $ | 1.27        |  | $      | 110.9 |                 | 62.931 |  | $ | 1.76  
|Effect of dilutive stock options, non-vested equity shares and share units outstanding |  |                                  | -    |        | 0.906  |                 |   | (0.01)      |  |        | -     |                 | 1.472  |  |   | (0.04)
|                                                                                       |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Diluted EPS:                                                                           |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       
|Net earnings                                                                           |  | $                                | 82.9 |        | 66.033 |                 | $ | 1.26        |  | $      | 110.9 |                 | 64.403 |  | $ | 1.72  
|                                                                                       |  |                                  |      |        |        |                 |   |             |  |        |       |                 |        |  |   |       

For the three and nine months ended September 30, 2009, there were
2.0 million shares and 3.4 million shares, respectively, and for the three and nine months ended September 30, 2008, there were 0.5 million shares and 0.8 million shares, respectively, relating to the possible exercise of
outstanding stock options not included in the computation of diluted EPS as their effect would have been antidilutive.

The
principal amount of the convertible notes issued in December 2006 and due in 2036 is expected to be settled in cash. Any conversion spread over the principal amount would be settled in our common shares. Since the average stock price during the
three and nine months ended September 30, 2009 and 2008 was less than the conversion price of the Convertible Notes, no shares associated with the convertible notes have been assumed to be outstanding in computing diluted EPS.

As a result of retrospectively applying ASC 470-20, net earnings for the three and nine months ended September 30, 2008 have been
adjusted from the previously disclosed amount of $26.1 million to $24.1 million and $116.8 million to $110.9 million, respectively. See Note 1, Nature of Business and Summary of Significant Accounting Policies, for further
discussion on the 2009 adoption of ASC 470-20 related to the Convertible Notes.

In connection with our May 2009 equity
offering, as further discussed under Note 11, Debt and Equity Financing, we entered into forward sale agreements with certain forward purchasers (the Forward Purchasers). Pursuant to the underwriting agreement, the
Forward Purchasers borrowed and sold to the Underwriters an aggregate of 4,722,989 shares of our common stock at an initial forward price of $53.00, before the underwriting discount of $2.25 per share. Before the issuance of our common stock upon
the July 27, 2009 settlement of the forward sale agreements, the forward sale agreements were reflected in our diluted earnings per share calculations using the treasury stock method. Under this method, the number of shares of our common stock
used in calculating diluted earnings per share was deemed to be increased by the excess, if any, of the number of shares that would be issued upon physical settlement of the forward sale agreements over the number of shares that could be purchased
by us in the market (based on the average market price during the period) using the proceeds receivable upon settlement. Consequently, there was a dilutive effect on our diluted earnings per share during periods when the average market price of our
common stock was above the per share initial forward sale price of $50.75.



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|Note 8. | Sale of Assets
|------- | --------------

During
the nine months ended September 30, 2009 and 2008, we sold certain receivables (Receivables). The net book value of the Receivables sold during these periods was $55.9 million and $46.2 million, respectively, for which we received
cash proceeds of $55.9 million and $46.4 million, respectively. Substantially all of these sales took place in Japan. These transactions were accounted for as sales. As a result, these Receivables have been excluded from the accompanying Condensed
Consolidated Balance Sheets.



|Note 9. | Composition of Certain Financial Statement Items
|------- | ------------------------------------------------

Inventories consisted of the following:



|                                    |  |                    |  |                  
|----------------------------------- |  | ------------------ |  | -----------------
|                                    |  | September 30, 2009 |  | December 31, 2008
|Raw materials, parts and assemblies |  | $    195.7         |  | $    156.5       
|Work in process                     |  | 30.4               |  | 19.2             
|Finished products                   |  | 426.2              |  | 320.5            
|                                    |  |                    |  |                  
|                                    |  | $    652.3         |  | $    496.2       
|                                    |  |                    |  |                  

Changes in the product warranty obligation included in accrued expenses were as
follows:



|                                       |  |                                      |  |                                    
|-------------------------------------- |  | ------------------------------------ |  | -----------------------------------
|                                       |  | Three months endedSeptember 30, 2009 |  | Nine months endedSeptember 30, 2009
|Beginning Balance                      |  | $    12.1                            |  | $    12.4                          
|Current period warranty charges        |  | 4.8                                  |  | 14.9                               
|ODS warranty liability balance assumed |  | 2.8                                  |  | 2.8                                
|Current period utilization             |  | (4.8)                                |  | (15.2)                             
|                                       |  |                                      |  |                                    
|Ending Balance                         |  | $    14.9                            |  | $    14.9                          
|                                       |  |                                      |  |                                    



|Note 10. | Goodwill and Other Intangible Assets
|-------- | ------------------------------------

Changes in the carrying amount of goodwill for the nine months ended September 30, 2009 were as follows:



|                               |  |                     |       |              |   |       |  |   |        
|------------------------------ |  | ------------------- | ----- | ------------ | - | ----- |  | - | -------
|                               |  | ClinicalDiagnostics |       | LifeSciences |   | Total
|Goodwill at December 31, 2008  |  | $                   | 587.0 |              | $ | 109.3 |  | $ | 696.3  
|ODS                            |  |                     | 320.0 |              |   | -     |  |   | 320.0  
|Other adjustments              |  |                     | (0.7) |              |   | 0.4   |  |   | (0.3)  
|                               |  |                     |       |              |   |       |  |   |        
|Goodwill at September 30, 2009 |  | $                   | 906.3 |              | $ | 109.7 |  | $ | 1,016.0
|                               |  |                     |       |              |   |       |  |   |        



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Other intangible assets consisted of the following:





|                                  |  |                     |  |                         |  |            |  |                     |  |                         |  |        
|--------------------------------- |  | ------------------- |  | ----------------------- |  | ---------- |  | ------------------- |  | ----------------------- |  | -------
|                                  |  | September 30, 2009  |  | December 31, 2008      
|                                  |  | GrossCarryingAmount |  | AccumulatedAmortization |  | Net        |  | GrossCarryingAmount |  | AccumulatedAmortization |  | Net    
|Amortized intangible assets:      |  |                     |  |                         |  |            |  |                     |  |                         |  |        
|Technology                        |  | $  239.4            |  | $     (51.7)            |  | $    187.7 |  | $  128.9            |  | $    (40.8)             |  | $  88.1
|Customer/dealer relationships     |  | 295.4               |  | (96.7)                  |  | 198.7      |  | 219.2               |  | (86.3)                  |  | 132.9  
|Core technology                   |  | 66.6                |  | (0.2)                   |  | 66.4       |  | -                   |  | -                       |  | -      
|Other                             |  | 85.4                |  | (38.9)                  |  | 46.5       |  | 69.4                |  | (33.7)                  |  | 35.7   
|                                  |  |                     |  |                         |  |            |  |                     |  |                         |  |        
|                                  |  | 686.8               |  | (187.5)                 |  | 499.3      |  | 417.5               |  | (160.8)                 |  | 256.7  
|Non-amortizing intangible assets: |  |                     |  |                         |  |            |  |                     |  |                         |  |        
|Tradename                         |  | 73.5                |  | -                       |  | 73.5       |  | 73.5                |  | -                       |  | 73.5   
|Core technology                   |  | -                   |  | -                       |  | -          |  | 66.6                |  | -                       |  | 66.6   
|                                  |  |                     |  |                         |  |            |  |                     |  |                         |  |        
|                                  |  | $  760.3            |  | $   (187.5)             |  | $    572.8 |  | $  557.6            |  | $  (160.8)              |  | $396.8 
|                                  |  |                     |  |                         |  |            |  |                     |  |                         |  |        

Estimated future intangible asset amortization expense consists of the following:



|                              |  |   |      
|----------------------------- |  | - | -----
|2009 (remaining three months) |  | $ | 13.9 
|2010                          |  |   | 54.9 
|2011                          |  |   | 54.2 
|2012                          |  |   | 50.6 
|2013                          |  |   | 49.9 
|Thereafter                    |  |   | 275.8
|                              |  |   |      
|Total                         |  | $ | 499.3
|                              |  |   |      

|
|

In September 2009, we reevaluated our core technology, which previously had an
indefinite useful life. We considered current and expected future technological changes evolving in the marketplace, including the potential development of newer technologies by our competitors. We determined that over time these factors could make
our core technology less valuable for our related products, and determined that it was appropriate to assign an estimated 20 year useful life to the technology. We determined in the current quarter that our core technology assets are not impaired.
The incremental annual amortization of this change is approximately $3 million.



|Note 11. | Debt and Equity Financing
|-------- | -------------------------

Certain of our borrowing agreements contain covenants that we must comply with, including a debt to earnings ratio and a minimum interest coverage ratio. At September 30, 2009, we were in compliance with such covenants.

In May 2009, we entered into an Amended and Restated Credit Agreement (the Credit Facility) and extended the maturity date of
the Credit Facility to May 2012. The Credit Facility provides us with a $350.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of $450.0 million. In connection with the Amendment of
the Credit Facility, we incurred issuance costs of $5.3 million which are being amortized over the term of the Credit Facility. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus
2.25% to 2.875% margin with the precise margin determinable based on our long-term senior unsecured non-credit-enhanced debt rating, which as of September 30, 2009 was 2.75%. We also must pay a facility fee of 0.50% per annum on the
aggregate average daily amount of each lenders commitment with the precise margin determinable based on our long-term senior unsecured non-credit-enhanced debt rating, which as of September 30, 2009 was a S&P rating of BBB. At
September 30, 2009, no amounts were outstanding under the Credit Facility.

On May 26, 2009, we issued $250.0
million principal amount of the Companys 6% Senior Notes due 2015 and $250.0 million principal amount of the Companys 7% Senior Notes due 2019 (the Notes). In connection with the Notes, we incurred issuance costs of $4.8
million. The Notes were issued at a discount of $2.3 million which is being amortized over the estimated life of the Notes. The proceeds from the Notes were used on August 3, 2009 to partially fund the ODS acquisition that is further described
in Note 2, Acquisitions.



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On May 19, 2009 we entered into forward sale agreements for the sale of an aggregate of
4,722,989 shares of our common stock including an amount equal to the underwriters over-allotment option in the public offering. The initial forward sale price was $50.75 per share which was equivalent to the public offering price of $53.00
less the underwriting discount of $2.25. On July 27, 2009 we received net proceeds of approximately $240 million from the issuance of shares in connection with this offering, which were used to partially fund the ODS acquisition. Additionally,
we incurred issuance costs of $11.8 million in connection with this offering, which is recorded as a reduction to additional paid-in capital as of September 30, 2009.



|Note 12. | Share-Based Compensation
|-------- | ------------------------

Share-based compensation expense was $8.5 million and $8.8 million for the three months ended September 30, 2009 and 2008, respectively. For the nine months ended September 30, 2009 and 2008, share-based compensation expense was
$27.2 million and $27.0 million, respectively.



|Note 13. | Retirement Benefits
|-------- | -------------------

In
the first quarter of 2009, we received the final valuations of our pension plans and other postretirement benefit plans to reflect actual census data as of January 1, 2009, which also included a revision to our assumption for the percentage of
retirees expected to participate in the postretirement plan. This valuation resulted in a decrease to pension obligations of $2.4 million and postretirement obligations of $35.3 million. Additionally, other comprehensive income increased by $23.3
million and long-term deferred tax liabilities increased by $14.4 million.

As a result of the acquisition of Olympus, our
liabilities related to retirement benefits increased by $16.1 million as of September 30, 2009. The pension and postretirement benefit costs associated with these liabilities are not included in the tables below due to their insignificance.

For the three and nine months ended September 30, 2009 and 2008, the pension and postretirement benefit costs were
comprised of:



|                                               |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|---------------------------------------------- |  | -------------------------------- | ------ | ------------------------------- | - | ------ |  | ---- | ----- | ---- | - | ----- |  | - | ----- |  | - | -----
|                                               |  | Pensions                         |        | U.S.PostretirementBenefit Plans
|                                               |  | U.S. Plans                       |        | Non-U.S.Plans                   |  
|                                               |  | Three Months Ended September 30,
|                                               |  | 2009                             |        | 2008                            |   | 2009   |  | 2008 |       | 2009 |   | 2008 
|Service cost-benefits earned during the period |  | $                                | 4.0    |                                 | $ | 4.3    |  | $    | 1.2   |      | $ | 1.4   |  | $ | 0.4   |  | $ | 0.5  
|Interest cost on benefit obligation            |  |                                  | 10.8   |                                 |   | 10.2   |  |      | 2.4   |      |   | 2.8   |  |   | 1.7   |  |   | 1.9  
|Expected return on plan assets                 |  |                                  | (11.8) |                                 |   | (14.1) |  |      | (2.1) |      |   | (3.1) |  |   | -     |  |   | -    
|Amortization:                                  |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|Prior service cost (credit)                    |  |                                  | 0.2    |                                 |   | 0.2    |  |      | (0.2) |      |   | (0.2) |  |   | (0.1) |  |   | (1.1)
|Actuarial loss (gain)                          |  |                                  | 5.6    |                                 |   | 3.0    |  |      | 0.8   |      |   | 0.4   |  |   | (0.1) |  |   | 0.3  
|                                               |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|Net periodic benefit costs                     |  | $                                | 8.8    |                                 | $ | 3.6    |  | $    | 2.1   |      | $ | 1.3   |  | $ | 1.9   |  | $ | 1.6  
|                                               |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|                                               |  |                                 
|                                               |  | Pensions                         |        | U.S.PostretirementBenefit Plans
|                                               |  | U.S. Plans                       |        | Non-U.S.Plans                   |  
|                                               |  | Nine Months Ended September 30, 
|                                               |  | 2009                             |        | 2008                            |   | 2009   |  | 2008 |       | 2009 |   | 2008 
|Service cost-benefits earned during the period |  | $                                | 11.9   |                                 | $ | 12.9   |  | $    | 3.7   |      | $ | 4.2   |  | $ | 1.2   |  | $ | 1.5  
|Interest cost on benefit obligation            |  |                                  | 32.3   |                                 |   | 30.6   |  |      | 7.1   |      |   | 8.4   |  |   | 5.0   |  |   | 5.7  
|Expected return on plan assets                 |  |                                  | (35.3) |                                 |   | (42.3) |  |      | (6.1) |      |   | (9.3) |  |   | -     |  |   | -    
|Amortization:                                  |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|Prior service cost (credit)                    |  |                                  | 0.7    |                                 |   | 0.6    |  |      | (0.6) |      |   | (0.6) |  |   | (0.3) |  |   | (3.3)
|Actuarial loss (gain)                          |  |                                  | 16.7   |                                 |   | 9.0    |  |      | 2.4   |      |   | 1.2   |  |   | (0.2) |  |   | 0.7  
|                                               |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      
|Net periodic benefit costs                     |  | $                                | 26.3   |                                 | $ | 10.8   |  | $    | 6.5   |      | $ | 3.9   |  | $ | 5.7   |  | $ | 4.6  
|                                               |  |                                  |        |                                 |   |        |  |      |       |      |   |       |  |   |       |  |   |      

We contributed $24.0 million and $8.2 million to our U.S. pension plan during the
nine months ended September 30, 2009 and September 30, 2008, respectively. We expect to contribute approximately $16.3 million to our other U.S. retirement



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plans and international pension plans and approximately $4.6 million to our postretirement plan during 2009. Our pension plans are underfunded and we may decide to make additional pension plan
contributions. In addition, pension expense in future years may increase if the value of our pension assets decline further.



|Note 14. | Commitments and Contingencies
|-------- | -----------------------------

Environmental Matters

We are subject to federal, state, local and foreign environmental laws and regulations.
Although we continue to incur expenditures for environmental protection, we do not anticipate any expenditures to comply with such laws and regulations that would have a material impact on our consolidated operations or financial position beyond
amounts accrued to date. We believe that our operations comply in all material respects with applicable federal, state and local environmental laws and regulations.

In connection with our Orange County consolidation project and closure of our Fullerton, California site, we began conducting environmental studies at our Fullerton site. The data generated by these
studies indicates that soils under and around several of the buildings contain chemicals previously used in operations at the facility. Some of these chemicals also have been found in groundwater underlying the site. Studies to determine the source
and extent of these chemicals are underway and are expected to continue for several months. We have notified the State Department of Toxic Substances Control of the presence of these chemicals at the site and expect that agency to oversee
determination of any remediation requirements. During 2008, we recorded a liability of $19 million representing our best estimate of the future expenditures for investigation and remediation at the site; however, it is possible that the ultimate
costs incurred could range from $10 million to $30 million. Our estimates are based upon the results of our investigation to date and comparison to our prior experience with environmental remediation at another site. Therefore, it is possible that
additional activities not contemplated at this time could be required and that the actual costs could differ materially from the amount we have recorded as a liability or our estimated range.

To address contingent environmental costs, we establish reserves when the costs are probable and can be reasonably estimated. We believe
that, based on current information and regulatory requirements, the reserves established by us for environmental expenditures are adequate. Based on current knowledge, to the extent that additional costs may be incurred that exceed the reserves, the
amounts are not expected to have a material adverse effect on our operations, consolidated financial condition or liquidity.

Legal
Proceedings

We are involved in a number of lawsuits, which we consider ordinary and routine in view of our size and the
nature of our business. We do not believe that any ultimate liability resulting from any of these lawsuits will have a material adverse effect on our results of operations, financial position or liquidity. However, we cannot give any assurances
regarding the ultimate outcome of these lawsuits and their resolution could be material to our operating results for any particular period, depending upon the level of income for the period.

In 1998, we entered into a sale-leaseback transaction with Cardbeck Miami Trust (Cardbeck) in connection with our Miami
facility. In May 2005, the State of Florida asserted that payments made by us pursuant to the sale-leaseback transaction were subject to commercial rental tax under applicable state laws and issued a tax assessment for June 2000 through February
2005. We paid approximately $2.4 million to settle the tax assessment and then filed a declaratory relief action in Leon County, Florida against the Florida Department of Revenue seeking a judicial ruling that payments made by us pursuant to the
sale-leaseback transaction were not subject to commercial rental tax. On July 30, 2009, we entered into a settlement with the State of Florida under which we agreed to pay $3.5 million to resolve the potential liability for unpaid commercial
rental tax arising from the sale-leaseback transaction for the period from June 25, 1998 through May 31, 2000 and from March 1, 2005 through June 30, 2018. Of the $3.5 million settlement amount, we have estimated approximately
$1.7 million to be associated with past liabilities, for which we accrued during the first quarter of 2009. The settlement agreement does not address commercial rental tax issues for any period commencing after June 30, 2018.

On March 28, 2007, Cardbeck filed an action in Miami-Dade Circuit Court seeking a ruling that our failure to pay the commercial rental
taxes and our challenge of the applicability of the commercial rental tax to the sale-leaseback transaction constitute breaches of the lease. We filed a counter claim seeking to recover the approximately $2.4 million that we had paid the State of
Florida to resolve the tax assessment covering the period June 2000 through February, 2005, claiming Cardbeck had failed to provide us with timely notice of the assessment, which prevented us from effectively challenging the assessment. The Court
stayed the Miami-Dade action pending resolution of the Leon County declaratory relief action. Following our July 30, 2009 settlement with the Florida Department of Revenue of the Leon County declaratory relief action, the Miami-Dade Circuit
Court lifted the stay, allowing the Cardbeck action to resume. We believe our actions do not constitute a breach of the lease, because the lease specifically allows us to challenge taxes and to withhold payment of the taxes pending resolution of the
challenge.



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In June 2006 Wipro Limited (Wipro), our former distributor in India, initiated
an arbitration action against Beckman Coulter International S.A., our subsidiary who entered the distributor relationship with Wipro, alleging that certain actions by Beckman Coulter India Private Limited, our India subsidiary, breached their
contract. We agreed to a settlement and recognized a total expense of $2.6 million during the first quarter of 2009.

On
August 16, 2007, a former employee filed a lawsuit in Orange County California Superior Court titled Davila vs. Beckman Coulter. The lawsuit alleged claims on the plaintiffs own behalf and also on behalf of a purported class of our former
and current employees. The complaint alleged, among other things, that we violated certain provisions of the California Labor Code and applicable California Industrial Welfare Commission Wage Orders with respect to meal breaks and rest periods, the
payment of compensation for meal breaks and rest periods not taken, the information shown on pay stubs and certain overtime payments. It also alleged that we engaged in unfair business practices. The plaintiff asked for back pay, statutory
penalties, and attorneys fees and sought to certify this action on behalf of our nonexempt California employees. Later, six additional former employees were added as class representatives. The Court has approved the parties settlement of this
matter with the Company to pay $1.6 million to the claims administrator to settle all claims of the settling class members known or unknown, which relate to their wage claims with the Company. The payments required by the settlement agreement were
accrued for during the fourth quarter of 2008 and have been paid.



|Note 15. | Business Segment Information
|-------- | ----------------------------

We are engaged primarily in the design, manufacture and sale of laboratory instrument systems and related products with two operating segments, Clinical Diagnostics and Life Science. The Clinical Diagnostics segment, which includes products
used to evaluate and analyze bodily fluids, cells and other patient samples, represents approximately 86% of our consolidated revenue. The product areas within Clinical Diagnostics are Chemistry and Clinical Automation, Cellular Analysis, and
Immunoassay and Molecular Diagnostics. Our Life Science segment includes systems used in disease research performed in academic centers as well as therapeutic research performed by biopharmaceutical companies.

Management evaluates business segment performance on a revenue and operating income basis, exclusive of certain adjustments such as
restructuring charges, technology licenses and other charges, which are not allocated to our segments for performance assessment by our chief operating decision maker. We do not discretely allocate assets to our operating segments, nor does our
chief operating decision maker evaluate operating segments using discrete asset information.



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The following table sets forth revenue and operating income data with respect to our two
operating segments and a reconciliation of our segments operating income to consolidated earnings (loss) before income taxes:



|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|---------------------------------------------------------------------- |  | -------------------------------- | ------ | ------------------------------- | - | ------ |  | ---- | ------- |  | - | -------
|                                                                       |  | *Three Months EndedSeptember 30, |        | *Nine Months EndedSeptember 30,
|                                                                       |  | 2009                             |        | 2008                            |   | 2009   |  | 2008
|Segment revenues:                                                      |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Clinical Diagnostics                                                   |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Chemistry and Clinical Automation                                      |  | $                                | 282.7  |                                 | $ | 220.4  |  | $    | 708.4   |  | $ | 669.0  
|Cellular Analysis                                                      |  |                                  | 229.0  |                                 |   | 233.1  |  |      | 668.8   |  |   | 709.1  
|Immunossay and Molecular Diagnostics                                   |  |                                  | 199.3  |                                 |   | 182.4  |  |      | 578.9   |  |   | 548.7  
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Total Clinical Diagnostics                                             |  |                                  | 711.0  |                                 |   | 635.9  |  |      | 1,956.2 |  |   | 1,926.7
|Life Science                                                           |  |                                  | 111.8  |                                 |   | 122.9  |  |      | 314.9   |  |   | 361.0  
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Total revenue                                                          |  | $                                | 822.8  |                                 | $ | 758.8  |  | $    | 2,271.0 |  | $ | 2,287.6
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Segment operating income:                                              |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Clinical Diagnostics                                                   |  | $                                | 88.5   |                                 | $ | 62.0   |  | $    | 234.8   |  | $ | 185.4  
|Life Science                                                           |  |                                  | 15.2   |                                 |   | 14.7   |  |      | 32.5    |  |   | 43.3   
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Total segment operating income                                         |  |                                  | 103.7  |                                 |   | 76.7   |  |      | 267.2   |  |   | 228.7  
|Restructuring and acquisition related costs                            |  |                                  | (79.2) |                                 |   | (7.8)  |  |      | (127.2) |  |   | (13.2) 
|Fair market value inventory adjustment related to Clinical Diagnostics |  |                                  | (8.8)  |                                 |   | -      |  |      | (8.8)   |  |   | (1.0)  
|Discontinued product write-off related to Clinical Diagnostics         |  |                                  | (1.6)  |                                 |   | -      |  |      | (1.6)   |  |   | -      
|Litigation accrual                                                     |  |                                  | (3.9)  |                                 |   | -      |  |      | (3.9)   |  |   | -      
|Technology licenses used in R&D for Clinical Diagnostics               |  |                                  | (5.8)  |                                 |   | (11.7) |  |      | (5.8)   |  |   | (23.7) 
|Environmental remediation                                              |  |                                  | -      |                                 |   | (19.0) |  |      | -       |  |   | (19.0) 
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Total operating income                                                 |  |                                  | 4.4    |                                 |   | 38.2   |  |      | 119.9   |  |   | 171.8  
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Non-operating (income) expense:                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Interest income                                                        |  |                                  | (1.4)  |                                 |   | (2.4)  |  |      | (4.0)   |  |   | (8.6)  
|Interest expense                                                       |  |                                  | 24.3   |                                 |   | 16.7   |  |      | 52.7    |  |   | 44.5   
|Other                                                                  |  |                                  | (18.0) |                                 |   | (2.0)  |  |      | (24.9)  |  |   | (5.5)  
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Total non-operating (income) expense                                   |  |                                  | 4.9    |                                 |   | 12.3   |  |      | 23.8    |  |   | 30.4   
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        
|Earnings (loss) before income taxes                                    |  | $                                | (0.5)  |                                 | $ | 25.9   |  | $    | 96.1    |  | $ | 141.4  
|                                                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |        



|* | Amounts may not foot due to rounding.
|- | -------------------------------------

U. S. information is presented separately since we are headquartered in the U.S. Revenues in the U.S. represented 49% and 50% of our total consolidated revenues for the three month periods ended September 30, 2009 and 2008,
respectively, and 50% for both the nine month periods ended September 30, 2009 and 2008, respectively. No other country accounts for greater than 10% of revenues.



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The following table sets forth revenue and long-lived asset data by geography:



|                       |  |                                  |       |                                 |   |       |  |      |         |  |   |        
|---------------------- |  | -------------------------------- | ----- | ------------------------------- | - | ----- |  | ---- | ------- |  | - | -------
|                       |  | *Three Months EndedSeptember 30, |       | *Nine Months EndedSeptember 30,
|                       |  | 2009                             |       | 2008                            |   | 2009  |  | 2008
|Revenues by geography: |  |                                  |       |                                 |   |       |  |      |         |  |   |        
|United States          |  | $                                | 402.2 |                                 | $ | 376.5 |  | $    | 1,135.0 |  | $ | 1,133.4
|Europe                 |  |                                  | 182.4 |                                 |   | 165.4 |  |      | 493.4   |  |   | 511.8  
|Emerging Markets (a)   |  |                                  | 65.7  |                                 |   | 68.8  |  |      | 178.8   |  |   | 205.1  
|Asia Pacific           |  |                                  | 122.9 |                                 |   | 94.5  |  |      | 322.5   |  |   | 279.2  
|Other (b)              |  |                                  | 49.6  |                                 |   | 53.6  |  |      | 141.3   |  |   | 158.1  
|                       |  |                                  |       |                                 |   |       |  |      |         |  |   |        
|Total revenue          |  | $                                | 822.8 |                                 | $ | 758.8 |  | $    | 2,271.0 |  | $ | 2,287.6
|                       |  |                                  |       |                                 |   |       |  |      |         |  |   |        



|                                |  |                   |         |                  |   |        
|------------------------------- |  | ----------------- | ------- | ---------------- | - | -------
|                                |  | September 30,2009 |         | December 31,2008
|Long-lived assets by geography: |  |                   |         |                  |   |        
|United States                   |  | $                 | 1,911.6 |                  | $ | 1,690.3
|International                   |  |                   | 883.7   |                  |   | 389.8  
|                                |  |                   |         |                  |   |        
|Total long lived assets         |  | $                 | 2,795.3 |                  | $ | 2,080.1
|                                |  |                   |         |                  |   |        



|* | Amounts may not foot due to rounding.
|- | -------------------------------------

|(a) | Emerging Markets includes Eastern Europe, Russia, Middle East, Africa and India.
|--- | --------------------------------------------------------------------------------

|(b) | Other includes Canada and Latin America
|--- | ---------------------------------------



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations
|------- | -------------------------------------------------------------------------------------

The Form 10-Q for the quarterly period ended September 30, 2009 (Form 10-Q) contains forward-looking statements
within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Many of the forward-looking statements are located in this Managements Discussion
and Analysis of Financial Condition and Results of Operations section. Forward-looking statements reflect our current views with respect to future events and can also be identified by words such as may, will,
might, expect, believe, anticipate, could, would, estimate, continue, pursue, plans, should, likely,
might, or the negative thereof or comparable terminology, and may include, without limitation, information regarding our expectations, goals or intentions regarding the future. Forward-looking statements involve certain risks and
uncertainties, and our actual results may differ materially from those discussed in any forward-looking statement. Factors that could cause results to differ include, but are not limited to, those discussed in the section below entitled Risk
Factors under Part II, Item 1A of this Form 10-Q. Additional factors that could cause actual results to differ are discussed in Part II, Item A Risk Factors in our Annual Report on Form 10-K for the year ended
December 31, 2008 and in our other current and periodic reports filed from time to time with the SEC. All forward-looking statements in this Form 10-Q are made as of the date hereof and we assume no obligation to update any forward-looking
statement, except as required by law.

The following discussion should be read in conjunction with our Condensed
Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements included in Part I, Item I of this Form 10-Q and in our Annual Report on Form 10-K. Managements Discussion and Analysis of Financial Condition and
Results of Operations (MD&A) is designed to provide a reader of our financial statements with a narrative from the perspective of our management on our financial condition, results of operations, liquidity and certain other factors
that may affect our future results.

Overview

Beckman Coulter is the worlds largest company devoted solely to biomedical testing, a market we estimate had about $37 billion in worldwide sales in 2008. We market our products in more than 130
countries, with approximately half of our revenue in 2008 coming from outside the United States. Our strategy is to extend the companys leadership in simplifying, automating and innovating customers processes, by continuing to rollout
new products, enhance our current product offerings and enter into new and growing market segments.

We design, manufacture,
and sell systems, services, reagents and supplies to clinical and life science laboratories around the world. Our products combine sophisticated analytical instruments, user-friendly software and highly sensitive chemistries, integrated into
complete and simple to use systems. Our product lines address nearly all blood tests routinely performed in hospital laboratories and a range of systems for life science and pharmaceutical research.



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The majority of our revenue is generated from consumable supplies (including reagent test
kits), service and operating-type lease (OTL) payment arrangements. Approximately 83% of our total revenue for the first nine months in 2009 was generated by this type of revenue, which we refer to as recurring revenue. A
customer contract typically runs five years while the average customer relationship lasts more than 15 years. Switching instrument systems creates significant costs for labs: changing suppliers means re-training staff on new systems and performing
validation studies to assure consistency of reported results. High retention rates have driven recurring revenue to approximately 83% of total revenue. Our remaining balance of revenue is derived from instrument sales.

Our instruments are mainly provided to customers under cash sales or OTL arrangements. Since mid-2005, most of our leases have been OTLs
rather than sales-type leases (STLs), which we previously utilized. Our OTLs are provided under bundled lease arrangements, in which our customers pay a monthly amount for the equipment, consumable supplies (including reagent test kits),
and service. Our lease arrangements primarily take the form of what are known as reagent rentals where an instrument is placed at a customer location and the customer commits to purchase a certain minimum volume of reagents annually. We
also enter into metered contracts with customers where the instrument is placed at a customer location with a stock of reagents and the customer is billed monthly based on actual reagent usage.

Strategic Initiatives

Our
strategic initiatives for 2009 focus on key growth drivers, quality and operating excellence:



| |  |  | We are working to expand our test menu, particularly in our immunoassay and molecular diagnostics products and believe our focus on certain disease
states will enable us to deliver enhanced testing capability to our customers, which are expected to improve patient health and reduce the cost of care.
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We are building on our industry-leading ability to help customers simplify, automate and innovate their work flow. Our unparalleled knowledge of
customers laboratory processes supports our expansion of automation and work cells, growing our installed base of instruments.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | From a geographic perspective, we are expanding resources in developing markets, including China and India, which we believe will improve our
opportunities for long-term growth.
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We intend to continue to streamline our supply chain operations to improve our overall cost structure. We are expanding our use of Lean Six
Sigma tools throughout the company as a result of our initial success with these tools.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | We continue to make progress on our plan to design and build an automated, fully integrated molecular diagnostic system to enable moderately complex
testing in clinical diagnostic laboratories.
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

As part of our strategic initiatives, we expect to incur
charges as we realign our manufacturing and distribution footprint and implement initiatives to improve productivity and reduce operating costs in the future.

Acquisition of Olympus Diagnostic Systems Business

We entered into a
master purchase agreement with Olympus Corporation, which we also refer to as Olympus, dated February 27, 2009, to acquire the diagnostic systems portion of Olympus Corporation, (Olympus Diagnostic Systems or ODS). On
August 3, 2009 (Tokyo time), we completed the acquisition through a cash payment of approximately 76 billion Japanese yen (approximately U.S. $800 million based on currency exchange rates as of August 3, 2009). The final purchase price is
subject to, among other things, determination of the final closing net assets.

The Olympus Diagnostic Systems business
encompasses the development, manufacturing, marketing, sale, distribution and use of clinical chemistry and immunoassay analyzers, blood transfusion testing systems, and the chemical reagents and other consumables used with them, and related
laboratory automation equipment, for in vitro diagnostic testing of samples from humans and animals. The completion of this transaction adds considerable product depth and significantly expands our geographic reach and scale. We expect the
ODS business to fill some important gaps in our product line, in both the high-throughput and low-throughput segments in chemistry and automation. We have announced our plan to discontinue ODSs immunoassay product line. We believe we have the
opportunity to continue our above-market growth in immunoassay by selling our immunoassay products to an entirely new base of loyal ODS chemistry customers. Our strength in total lab automation should be complemented by ODS strong
pre-analytical automation position in Europe and Asia. Customers should benefit from the expanded range of products, particularly those large hospital and university laboratories where higher throughput systems are preferred. This acquisition is
classified as part of our Clinical Diagnostics business segment.

On February 27, 2009, we also entered into forward
contracts with various banks covering the full amount of the purchase price in order to hedge the risk of changes in the exchange rate of the Japanese yen versus the U.S. dollar between the signing and closing of the ODS acquisition. See Note 4,
Derivatives, for further discussion on derivative financial instruments.



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The foregoing description of the ODS acquisition is qualified in its entirety by reference
to the full text of the master purchase agreement, which is attached as Exhibit 2.1 to the 8-K filed with the SEC on August 4, 2009 and incorporated by reference.

Critical Accounting Policies and Estimates

Our Condensed Consolidated
Financial Statements are prepared in accordance with U.S. GAAP. In connection with the preparation of our financial statements, we are required to make assumptions and estimates about future events and apply judgments that affect the reported
amounts of assets, liabilities, revenue, expenses and the related disclosures. We base our assumptions, estimates and judgments on historical experience, current trends and other factors that management believes to be relevant at the time our
consolidated financial statements are prepared. On a regular basis, our accounting policies, assumptions, estimates and judgments are reviewed by management to ensure that our financial statements are presented fairly in accordance with U.S. GAAP.
However, because future events and their effects cannot be determined with certainty, actual results could differ materially from our assumptions and estimates.

Both our accounting policies and estimates are essential in understanding MD&A and results of operations. We describe our significant accounting policies in Note 1, Nature of Business and
Summary of Significant Accounting Policies, of the Notes to the Consolidated Financial Statements included in our Annual Report on Form 10-K for the year ended December 31, 2008. In addition, we discuss our critical accounting
estimates in MD&A in our Annual Report on Form 10-K for the year ended December 31, 2008. There were no significant changes in our accounting policies or estimates since the end of 2008 except as described below.

As of January 1, 2009, we adopted new accounting guidance related to convertible debt, on a retroactive basis, to record the equity
component of our convertible debt and non-cash interest expense related to our convertible debt obligation. As a result of the adoption of the new accounting guidance on Debt with Conversion and Other Options (ASC 470-20), at
December 31, 2008 our long-term debt decreased by $77.3 million and our stockholders equity increased by $46.3 million. Our interest expense increased by $3.6 million and $3.4 million for the three months ended September 30,
2009 and 2008, respectively, and by $10.7 million and $10.0 million for the nine months ended September 30, 2009 and 2008, respectively. Our diluted earnings per share decreased by $0.03 and $0.04 for the three months ended September 30,
2009 and 2008, respectively, and by $0.10 and $0.09 for the nine months ended September 30, 2009 and 2008, respectively, as a result of the adoption.

In September 2009, we reevaluated our core technology, which previously had an indefinite useful life. We considered current and expected future technological changes evolving in the marketplace,
including the potential development of newer technologies by our competitors. We determined that over time these factors could make our core technology less valuable for our related products, and determined that it was appropriate to assign an
estimated 20 year useful life to the technology. We determined in the current quarter that our core technology assets are not impaired. The incremental annual amortization of this change is approximately $3 million.

Change in Presentation

We
have a hedging program to reduce the risk of foreign currency changes on cash flows generated from intercompany inventory purchases. In the first quarter of 2009, our results of operations were impacted more significantly by currency changes, a
portion of which was offset by the results of our hedging program. To reflect this net currency impact on our operating results, we have reclassified our gains and losses related to cash flow hedging activities and foreign currency transactions to
cost of sales from non-operating income or expense for all periods presented. The amounts reclassified for the prior periods were not material.

Results of Operations

We measure our business on the basis of two reportable segments  Clinical
Diagnostics and Life Science. The Clinical Diagnostics segment represents approximately 86% of our consolidated revenue and includes products used to evaluate and analyze bodily fluids, cells and other patient samples. The three product areas within
Clinical Diagnostics are Chemistry and Clinical Automation, Cellular Analysis and Immunoassay and Molecular Diagnostics. Our Life Science segment, on the other hand, includes systems used for disease research performed in academic centers and
therapeutic research performed by biopharmaceutical companies.



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##### Table of Contents

To facilitate an understanding of our financial results, we review revenue on both a
reported and constant currency basis (constant currency growth is not a U.S. GAAP defined measure of revenue growth). We define constant currency revenue as current period revenue in local currency translated to U.S. dollars at the prior years
foreign currency exchange rate for that period, computed monthly. Constant currency growth as presented herein represents:

Current period constant currency revenue less prior year reported revenue / Prior year reported revenue

This measure
provides information on revenue growth assuming that foreign currency exchange rates have not changed between the prior year and the current period. We believe the use of this measure aids in the understanding of our operations without the impact of
foreign currency fluctuations. Constant currency revenue and constant currency growth as defined or presented by us may not be comparable to similarly titled measures reported by other companies. Additionally, constant currency revenue is not an
alternative measure of revenue on a U.S. GAAP basis.

Current Quarter Financial Highlights

Total revenue increased 8.4% to $822.8 million during the third quarter, when compared to the corresponding prior year period, including
revenue of $65.1 million related to the recently acquired ODS business. However, excluding the effect of the acquisition, on a constant currency basis, revenue remained relatively flat as constant currency recurring revenue grew by 7.7%, but was
partially offset by a 14.8% constant currency decline in hardware instrument sales. The recurring revenue gain was generated primarily from our Clinical Diagnostics products, driven in part by Access Immunoassay which grew 10.3% in constant
currency. Our acquisition of Cogenics contributed about 100 basis points of recurring revenue growth. Excluding revenue from the ODS acquisition, instrument sales declined in all product areas when compared to the prior year quarter due primarily to
weakness in the U.S. market and in Emerging Markets.

Gross profit margin decreased 10 basis points to 45.9% during the third
quarter of 2009 as compared to the prior year quarter due primarily to an increase in cost of sales associated with ODS products as a result of an $8.8 million roll-out of fair value adjustment to inventory recorded in connection with the
acquisition accounting and a charge of $1.6 million associated with the write-off of discontinued products. These factors were substantially offset by a favorable product mix, with recurring revenue comprising a larger percentage of our overall
revenue.

Selling, general and administrative (SG&A) expense increased $13.4 million or 6.4% during the
current quarter as a result of the acquisition, offset by the benefit from our cost containment initiatives combined with the effect of a stronger dollar, which reduced SG&A expenses by approximately $4 million.

Research and development (R&D) expense decreased by $3.1 million or 4.1% mainly due to reductions related to completion of
certain Cellular Analysis R&D projects and reprioritization of other projects, offset by R&D spending related to the ODS acquisition, and continuing to fund significant R&D programs in Immunoassay and Molecular Diagnostics, including
acquisition of a license for Molecular Diagnostics for $5.8 million as well as investments in new Flow Cytometry systems.

Restructuring and acquisition related costs increased by $71.4 million during the third quarter of 2009, when compared to the prior year quarter, in large part due to: 1) a $25.5 million increase in acquisition and integration related
costs, such as outside legal and consulting fees primarily associated with the ODS acquisition, 2) $20.5 million related to severance costs associated with the ODS acquisition and related restructuring, and a 3) $14.2 million contract termination
fee related to cancellation of our project to develop a lower throughput chemistry instrument since we acquired a similar instrument as part of our ODS acquisition. Additionally, we incurred $7.1 million in restructure related costs in connection
with the closure and relocation of certain manufacturing and distribution sites as part of our plan to vacate our Fullerton, California facility and consolidate those operations to other existing facilities, comparable to the level incurred in the
prior year.

Total non-operating expense decreased by $7.4 million mainly due to a $10.9 million hedging gain. This gain is
associated with forward contracts to purchase Japanese yen as described under Acquisition of Olympus Diagnostic Systems Business. As a result of currency exchange rates, the U.S. dollar converted purchase price of approximately $780 million
(based on the exchange rates as of February 27, 2009) was also increased by an amount approximating our cumulative hedging gain. We had additional currency gains of $2.2 million on Japanese yen held prior to settlement of the acquisition and
$4.9 million on settlement of intercompany loans related to the acquisition. These gains were partially offset by a reduction of interest income of approximately $1 million, combined with additional net interest expense of $6.4 million as a result
of the debt portion of our financing for the ODS acquisition being outstanding for the entire quarter.

Our effective tax rate
changed from 6.9% during the third quarter of 2008 to a benefit of 400.0% during the current quarter due primarily to a decrease in the estimated annual effective tax rate applied in the current quarter coupled with a nominal pre-tax loss for the
quarter resulting in the unusual tax rate for the quarter.



28



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##### Table of Contents

Revenue

The following tables compare revenue type, segment and geography for the three and nine months ended September 30, 2009 and 2008 (dollar amounts in millions):



|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|-------------------------------------------------------- |  | -------------------------------- | ----- | ---------------- | - | ---------------------------- |  | ------- |  | ------
|                                                         |  | *Three MonthsEnded September 30, |       | ReportedGrowth % |   | ConstantCurrencyGrowth % (a)
|                                                         |  | 2009                             |       | 2008             |   |                             
|Total revenue:                                           |  |                                  |       |                  |   |                              |  |         |  |       
|Recurring revenue  supplies, service and lease payments |  | $                                | 676.1 |                  | $ | 594.6                        |  | 13.7%   |  | 17.3% 
|Instrument sales                                         |  |                                  | 146.7 |                  |   | 164.2                        |  | (10.7)% |  | (9.4)%
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|Total revenue                                            |  | $                                | 822.8 |                  | $ | 758.8                        |  | 8.4%    |  | 11.6% 
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|                                                         |  |                                  |       |                 
|Segment revenue:                                         |  |                                  |       |                  |   |                              |  |         |  |       
|Clinical Diagnostics:                                    |  |                                  |       |                  |   |                              |  |         |  |       
|Chemistry and Clinical Automation                        |  | $                                | 282.7 |                  | $ | 220.4                        |  | 28.3%   |  | 32.1% 
|Cellular Analysis                                        |  |                                  | 229.0 |                  |   | 233.1                        |  | (1.8)%  |  | 0.6%  
|Immunoassay and Molecular Diagnostics                    |  |                                  | 199.3 |                  |   | 182.4                        |  | 9.3%    |  | 13.1% 
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|Total Clinical Diagnostics                               |  |                                  | 711.0 |                  |   | 635.9                        |  | 11.8%   |  | 15.1% 
|Life Science                                             |  |                                  | 111.8 |                  |   | 122.9                        |  | (9.0)%  |  | (6.8)%
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|Total revenue                                            |  | $                                | 822.8 |                  | $ | 758.8                        |  | 8.4%    |  | 11.6% 
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|                                                         |  |                                  |       |                 
|Revenue by geography:                                    |  |                                  |       |                  |   |                              |  |         |  |       
|United States                                            |  | $                                | 402.2 |                  | $ | 376.5                        |  | 6.8%    |  | 6.8%  
|Europe                                                   |  |                                  | 182.4 |                  |   | 165.4                        |  | 10.3%   |  | 19.6% 
|Emerging Markets (b)                                     |  |                                  | 65.7  |                  |   | 68.8                         |  | (4.6)%  |  | 3.1%  
|Asia Pacific                                             |  |                                  | 122.9 |                  |   | 94.5                         |  | 30.0%   |  | 27.5% 
|Other (c)                                                |  |                                  | 49.6  |                  |   | 53.6                         |  | (7.4)%  |  | 2.5%  
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       
|Total revenue                                            |  | $                                | 822.8 |                  | $ | 758.8                        |  | 8.4%    |  | 11.6% 
|                                                         |  |                                  |       |                  |   |                              |  |         |  |       



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##### Table of Contents

|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|-------------------------------------------------------- |  | ------------------------------- | ------- | ---------------- | - | ---------------------------- |  | ------- |  | -------
|                                                         |  | *Nine MonthsEnded September 30, |         | ReportedGrowth % |   | ConstantCurrencyGrowth % (a)
|                                                         |  | 2009                            |         | 2008             |   |                             
|Total revenue:                                           |  |                                 |         |                  |   |                              |  |         |  |        
|Recurring revenue  supplies, service and lease payments |  | $                               | 1,878.8 |                  | $ | 1,792.6                      |  | 4.8%    |  | 10.0%  
|Instrument sales                                         |  |                                 | 392.2   |                  |   | 495.0                        |  | (20.8)% |  | (18.3)%
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|Total revenue                                            |  | $                               | 2,271.0 |                  | $ | 2,287.6                      |  | (0.7)%  |  | 3.8%   
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|                                                         |  |                                 |         |                 
|Segment revenue:                                         |  |                                 |         |                  |   |                              |  |         |  |        
|Clinical Diagnostics:                                    |  |                                 |         |                  |   |                              |  |         |  |        
|Chemistry and Clinical Automation                        |  | $                               | 708.4   |                  | $ | 669.0                        |  | 5.9%    |  | 10.7%  
|Cellular Analysis                                        |  |                                 | 668.8   |                  |   | 709.1                        |  | (5.7)%  |  | (1.7)% 
|Immunoassay and Molecular Diagnostics                    |  |                                 | 578.9   |                  |   | 548.7                        |  | 5.5%    |  | 10.9%  
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|Total Clinical Diagnostics                               |  |                                 | 1,956.2 |                  |   | 1,926.7                      |  | 1.5%    |  | 6.2%   
|Life Science                                             |  |                                 | 314.9   |                  |   | 361.0                        |  | (12.8)% |  | (8.7)% 
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|Total revenue                                            |  | $                               | 2,271.0 |                  | $ | 2,287.6                      |  | (0.7)%  |  | 3.8%   
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|                                                         |  |                                 |         |                 
|Revenue by geography:                                    |  |                                 |         |                  |   |                              |  |         |  |        
|United States                                            |  | $                               | 1,135.0 |                  | $ | 1,133.4                      |  | 0.1%    |  | 0.1%   
|Europe                                                   |  |                                 | 493.4   |                  |   | 511.8                        |  | (3.6)%  |  | 8.5%   
|Emerging Markets (b)                                     |  |                                 | 178.8   |                  |   | 205.1                        |  | (12.8)% |  | (2.9)% 
|Asia Pacific                                             |  |                                 | 322.5   |                  |   | 279.2                        |  | 15.5%   |  | 15.5%  
|Other (c)                                                |  |                                 | 141.3   |                  |   | 158.1                        |  | (10.6)% |  | 3.5%   
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        
|Total revenue                                            |  | $                               | 2,271.0 |                  | $ | 2,287.6                      |  | (0.7)%  |  | 3.8%   
|                                                         |  |                                 |         |                  |   |                              |  |         |  |        



| | * | Amounts in table above may not foot or recalculate due to rounding.
| | - | -------------------------------------------------------------------

| | (a) | Constant currency growth is not a U.S. GAAP defined measure of revenue growth.
| | --- | ------------------------------------------------------------------------------

| | (b) | Emerging Markets includes Eastern Europe, Russia, Middle East, Africa and India.
| | --- | --------------------------------------------------------------------------------

| | (c) | Other includes Canada and Latin America.
| | --- | ----------------------------------------

Revenue for the three and nine months ended September 30, 2009 includes the following amounts related to our ODS acquisition completed on August 3, 2009 (in millions):



|                                                         |  |   |     
|-------------------------------------------------------- |  | - | ----
|Total revenue:                                           |  |   |     
|Recurring revenue  supplies, service and lease payments |  | $ | 55.9
|Instrument sales                                         |  |   | 9.2 
|                                                         |  |   |     
|Total revenue                                            |  | $ | 65.1
|                                                         |  |   |     
|                                                         | 
|Segment revenue:                                         |  |   |     
|Clinical Diagnostics:                                    |  |   |     
|Chemistry and Clinical Automation                        |  | $ | 62.6
|Immunoassay and Molecular Diagnostics                    |  |   | 2.5 
|                                                         |  |   |     
|Total revenue                                            |  | $ | 65.1
|                                                         |  |   |     
|                                                         | 
|Revenue by geography:                                    |  |   |     
|United States                                            |  | $ | 21.2
|Europe                                                   |  |   | 24.4
|Emerging Markets (b)                                     |  |   | 7.2 
|Asia Pacific                                             |  |   | 12.2
|Other (c)                                                |  |   | 0.1 
|                                                         |  |   |     
|Total revenue                                            |  | $ | 65.1
|                                                         |  |   |     



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##### Table of Contents

Revenue

Recurring revenue increased 13.7% (17.3% in constant currency) during the three months ended September 30, 2009 and increased 4.8% (10.0% increase in constant currency) in the nine months ended
September 30, 2009 in comparison to the same periods in the prior year. The increase in constant currency recurring revenue was driven in part by the acquisition of ODS, which added approximately 9.6% and 3.2% to this growth during the three
and nine months ended September 30, 2009, respectively. Strong growth in Immunoassay, continued growth in Cellular Analysis and the acquisition of Cogenics in April 2009 also contributed to the increase. Recurring revenue, which we believe is
the best indicator of the overall strength of our business, represented 82.7% of our total revenue during the nine-month period.

Instrument sales decreased by 10.7% (9.4% in constant currency) during the three months ended September 30, 2009 and by 20.8% (18.3% in constant currency) during the nine months ended September 30, 2009, despite inclusion of $9
million of instrument sales from the ODS acquisition. Cash instrument sales pertaining to Cellular Analysis were most significantly impacted, declining by more than 18% in both the three and nine months ended September 30, 2009, compared to
unusually strong instrument sales in 2008. We believe the overall decline in 2009 cash instrument sales is due to a number of factors, including the continued difficult economic environment, the tightening of the credit markets, constrained hospital
operating environment and year to date 2009, the strengthening dollar. As a result, sales were negatively impacted as customers remain cautious in their capital spending and in some cases have delayed purchases. In addition, in the third quarter of
2008 we experienced an unusually strong increase of 26% in instrument sales in part due to a weak U.S. dollar, but also due to a production backlog issue that we resolved in 2008.

Clinical Diagnostics

Clinical Diagnostics revenue increased by
11.8% and 1.5% in the three and nine months ended September 30, 2009, respectively, when compared to the same period in 2008, primarily as a result of the acquisitions. In constant currency, Clinical Diagnostics realized an increase in revenue
of 15.1% and 6.2% for the third quarter and first nine months of 2009, respectively, primarily driven by a 18.9% and 10.9% improvement in recurring revenue during the three and nine months ended September 30, 2009. The ODS acquisition accounted
for $55.9 million, or 10.2% and 3.5% of growth in recurring revenue during the three and nine months ended September 30, 2009. Continued robust growth in Access Immunoassay also contributed to the increase. Recurring revenue growth largely
reflects an expanding installed base and increased test kit utilization. The gains in recurring revenue, however, were partially offset by declines in instrument sales of 7.8% and 21.4% in constant currency for the three and nine months ended
September 30, 2009, respectively, in comparison to the related prior year periods. The lower levels of instrument sales were mainly due to Cellular Analysis, as discussed earlier, and for the nine months ended September 30, 3009, Chemistry
and Clinical Automation.

Revenue by Product Area  Clinical Diagnostics

Chemistry and Clinical Automation

Revenue from Chemistry and Clinical Automation increased by 28.3% (32.1% in constant currency) and 5.9% (or an increase of 10.7% in constant currency) for the three and nine months ended September 30, 2009, respectively versus the same
periods in 2008. The ODS acquisition contributed revenue of $65.1 million, an increase of 8.6% and 2.8% for the three and nine months ended September 30, 2009. Recurring revenue in constant currency from the existing business increased by 6.8%
and 5.5% for the three and nine months ended September 30, 2009, however, cash instruments sales were down due to the constrained economic environment. Based on our year to date results, we expect to achieve a fifth consecutive record year of
integrated chemistry system placements, growing our installed base in mid to large sized hospitals.

Cellular Analysis

Revenue from Cellular Analysis decreased 1.8% (0.6% increase in constant currency) or 5.7% (1.7% in constant currency) for the three and nine
months ended September 30, 2009, respectively, as compared to the same period in 2008. This was due primarily to an 18.2% and 26.2% constant currency decline in cash instrument sales for the three and nine months ended September 30, 2009,
respectively, due in large part to significantly lower placement of instruments in Hematology. We believe Hematology sales were down primarily due to unusually high sales in 2008 and to the effect of constrained capital spending due to the economic
environment in 2009. Cash instrument sales were unusually high during 2008 as we resolved a 2007 backlog related to a supply chain disruption. In addition, the current constrained capital expenditure environment, including a stronger dollar in the
first half of 2009, has had a negative impact on our cash instrument sales. The decline in instrument sales, however, was partially offset by an increase in recurring revenue.



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Immunoassay and Molecular Diagnostics

Revenue in Immunossay and Molecular Diagnostics increased by 9.3% (13.1% in constant currency) and 5.5% (10.9% in constant currency) for the
three and nine months ended September 30, 2009, respectively, when compared to the same periods in the prior year. This increase is directly due to an increase in recurring revenue which grew by 14.0% and 11.9% in constant currency for the
three and nine months ended September 30, 2009, respectively and was led by an increase from our Access Immunoassay products. Growth in placements of mid to ultra high volume Immunoassay systems in the prior year helped increase our penetration
at the account level and fueled recurring revenue growth. The acquisition of Cogenics in April 2009 contributed $5.9 million and $11.2 million to revenue during the third quarter and first nine months of 2009, respectively

Life Science

Revenue from our Life Science products decreased by 9.0% (6.8% in constant currency) and 12.8% (8.7% in constant currency) for the three and nine months ended September 30, 2009 as compared to the prior year periods. Cash instrument
sales were a significant driver of the decrease in sales, declining by approximately 11.3% and 14.3% in constant currency for the three and nine month periods ended September 30, 2009, respectively. We anticipate continued weakness in research
markets, with a possible upside late in the year, as government stimulus funding begins to flow and grants are funded.

Revenue by Major
Geography

Overall, revenue in the U.S. was up 6.8% and 0.1% for the three and nine months ended September 30,
2009, respectively, versus the three and nine months ended September 30, 2008. Higher revenue was primarily a result of revenue from acquisitions and from growth in recurring revenue, offset by declines of more than 9% and 27% during the three
and nine months ended, respectively in cash instrument sales from both Clinical Diagnostics and Life Science due to the economic factors mentioned earlier.

Revenue in Europe increased by 10.3% and decreased by 3.6% (or increased by 19.6% and 8.5% in constant currency) for the three and nine months ended September 30, 2009, respectively. The constant
currency growth was due to an increase in recurring revenue of 26.6% and 13.6%, primarily resulting from the ODS acquisition and from solid growth in Immunoassay and Molecular Diagnostics. The region also experienced a decline in instrument sales
posting a decrease in sales of 7.0% and 10.9% in constant currency for the three and nine months ended September 30, 2009. We believe that the decline is due to adverse credit market and economic conditions which has led some customers to defer
capital expenditures.

Revenue from Emerging Markets decreased by 4.6% and 12.8% (3.1% increase and 2.9% decrease in constant
currency) for the three and nine months ended September 30, 2009, respectively, as we experienced a decrease in instrument sales from both Clinical Diagnostics and Life Science. Overall, cash instrument sales dropped by approximately 40% on a
constant currency basis for both the three and nine months ended September 30, 2009, respectively. Sales in 2008 had been particularly strong due to the weaker dollar which enabled us to increase our market penetration. However, in 2009, the
stronger dollar and difficult economic environment reduced cash instrument sales. Recurring revenue increased due to revenue from the ODS acquisition and continued growth in recurring revenue from instruments placed in prior years.

Sales in Asia Pacific increased by 30.0% and 15.5% (27.5% and 15.5% in constant currency) for the three and nine months ended
September 30, 2009, respectively, mainly due to 27.4% and 16.4% constant currency growth in recurring revenue, led by growth in products from Chemistry and Clinical Automation as a result of the ODS acquisition and Immunoassay and Molecular
Diagnostics. China continued to be the leading country, with total revenue growth of about 58% and 36% in constant currency for the three and nine months ended September 30, 2009, respectively.



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##### Table of Contents

Gross Profit



|                                     |  |                    |       |                   |   |               |  |                   |  |                   |         |               |   |         |  |        
|------------------------------------ |  | ------------------ | ----- | ----------------- | - | ------------- |  | ----------------- |  | ----------------- | ------- | ------------- | - | ------- |  | -------
|                                     |  | Three Months Ended |       | Nine Months Ended
|                                     |  | September 30,2009  |       | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |         | PercentChange
|(in millions)                        |  |                    |       |                   |   |               |  |                   |  |                   |         |               |   |         |  |        
|Gross profit on recurring revenue    |  | $                  | 351.2 |                   | $ | 320.1         |  | 9.7%              |  | $                 | 1,000.6 |               | $ | 969.5   |  | 3.2%   
|As a percentage of recurring revenue |  |                    | 51.9% |                   |   | 53.8%         |  | (1.9)%            |  |                   | 53.3%   |               |   | 54.1%   |  | (0.8)% 
|                                     |  |                   
|                                     |  | Three Months Ended |       | Nine Months Ended
|                                     |  | September 30,2009  |       | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |         | PercentChange
|(in millions)                        |  |                    |       |                   |   |               |  |                   |  |                   |         |               |   |         |  |        
|Gross profit on instrument sales     |  | $                  | 26.7  |                   | $ | 28.9          |  | (7.6)%            |  | $                 | 53.3    |               | $ | 75.2    |  | (29.1)%
|As a percentage of instrument sales  |  |                    | 18.2% |                   |   | 17.6%         |  | 0.6%              |  |                   | 13.6%   |               |   | 15.2%   |  | (1.6)% 
|                                     |  |                   
|                                     |  | Three Months Ended |       | Nine Months Ended
|                                     |  | September 30,2009  |       | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |         | PercentChange
|(in millions)                        |  |                    |       |                   |   |               |  |                   |  |                   |         |               |   |         |  |        
|Gross profit                         |  | $                  | 377.9 |                   | $ | 349.0         |  | 8.3%              |  | $                 | 1,053.9 |               | $ | 1,044.7 |  | 0.9%   
|As a percentage of total revenue     |  |                    | 45.9% |                   |   | 46.0%         |  | (0.1)%            |  |                   | 46.4%   |               |   | 45.7%   |  | 0.7%   

Gross profit increased $28.9 million or 8.3% and $9.2 million or 0.9% for the quarter
and nine months ended September 30, 2009, respectively, as compared to the corresponding prior year period. The ODS acquisition contributed $19.3 million in gross profit during both periods, including a charge of $8.8 million for the partial
run-off of the fair value adjustment to inventory in connection with the acquisition accounting. Excluding the gross profit generated from the ODS acquisition, gross profit grew by $9.6 million during the third quarter of 2009 as compared to the
prior year period and decreased by $10.1 million for the nine months ended September 30, 2009 as compared to the prior year. The increase in gross profit for the quarter reflects stronger gross margins, excluding ODS. The decrease for the nine
months primarily relates to $81.7 million in lower revenue, excluding the revenue associated with ODS, partially offset by better gross margins.

The increase in gross margin, excluding the effect of ODS, during both periods in 2009, is due primarily to a mix favoring recurring revenue, which represented approximately 82% of our total revenue for
the current period and approximately 78% for the comparative period. Gross margin from recurring revenue represents more than 90% of our overall gross margin. We expect recurring revenue to outpace cash instrument sales for the full year, improving
mix and gross margin as compared to the prior year. Instrument sales, particularly outside the U.S, are unfavorable in the short term from a margin perspective, but support our long term objective to increase our penetration in emerging markets and
position us to provide reliable and sustainable recurring revenue growth in future periods.

Operating Expenses



|                                    |  |                    |       |                   |   |               |  |                   |  |                   |       |               |   |       |  |       
|----------------------------------- |  | ------------------ | ----- | ----------------- | - | ------------- |  | ----------------- |  | ----------------- | ----- | ------------- | - | ----- |  | ------
|                                    |  | Three Months Ended |       | Nine Months Ended
|                                    |  | September 30,2009  |       | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |       | PercentChange
|(in millions)                       |  |                    |       |                   |   |               |  |                   |  |                   |       |               |   |       |  |       
|Selling, general and administrative |  | $                  | 222.6 |                   | $ | 209.2         |  | 6.4%              |  | $                 | 614.5 |               | $ | 625.5 |  | (1.8)%
|As a percentage of total revenue    |  |                    | 27.1% |                   |   | 27.6%         |  | (0.5)%            |  |                   | 27.1% |               |   | 27.3% |  | (0.2)%



33



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Selling, general and administrative (SG&A) expense for the three months
ended September 30, 2009 increased by $13.4 million, primarily due to $19.5 million in additional SG&A associated with the ODS business. Excluding the SG&A related to the acquisition, SG&A decreased by $6.1 million or 2.9% as
compared to the prior year quarter. For the nine months ended September 30, 2009, SG&A decreased by 1.8% or $11.0 million, despite the $19.5 million in added SG&A related to the ODS business, as mentioned earlier. The noted decreases in
SG&A, excluding the effect of ODS, are primarily due to our continued focus on cost containment initiatives, especially in light of the shortfall in hardware revenue combined with the effect of a stronger dollar in the first three quarters of
2009. These reductions in cost were achieved despite an increase in pension expense of $6.0 million and $18.1 million during the three and nine months ended September 30, 2009, respectively along with charges of approximately $4 million and $8
million related to legal matters during the three and nine months ended September 30, 2009, respectively.



|                                 |  |                    |      |                   |   |               |  |                   |  |                   |       |               |   |       |  |        
|-------------------------------- |  | ------------------ | ---- | ----------------- | - | ------------- |  | ----------------- |  | ----------------- | ----- | ------------- | - | ----- |  | -------
|                                 |  | Three Months Ended |      | Nine Months Ended
|                                 |  | September 30,2009  |      | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |       | PercentChange
|(in millions)                    |  |                    |      |                   |   |               |  |                   |  |                   |       |               |   |       |  |        
|Research and development         |  | $                  | 71.7 |                   | $ | 74.8          |  | (4.1)%            |  | $                 | 192.3 |               | $ | 215.2 |  | (10.6)%
|As a percentage of total revenue |  |                    | 8.7% |                   |   | 9.9%          |  | (1.2)%            |  |                   | 8.5%  |               |   | 9.4%  |  | (0.9)% 

The decrease in research and development (R&D) of $3.1 million for
the quarter ended September 30, 2009 was primarily due to an $11.7 million charge in the third quarter of 2008 related to buying out our future U.S. royalty for preeclampsia tests currently in development from Nephromics, LLC
(Nephromics). During the current year quarter, the ODS business added R&D costs of $6.6 million, while we incurred a $5.8 million charge for the purchase of a sublicense to certain patent rights which will be used to develop a
molecular assay. Excluding the effect of these items during both periods, R&D decreased by $3.8 million during the third quarter of 2009 as compared to the prior year quarter. R&D costs during the nine months ended decreased $22.9 million,
despite the added R&D costs related to the ODS business and the purchase of the sublicense during the third quarter of 2009. The primary reason for the decrease relates to the $11.7 million charge incurred during the third quarter of 2008, as
mentioned above, coupled with a $12.0 million charge during the first half of 2008 associated with the purchase of a non-exclusive sublicense related to the hepatitis C virus for our molecular diagnostics project. Excluding the effect of these
items, R&D decreased $11.6 million. Overall, R&D during both the quarter and nine months ended September 30, 2009 decreased, excluding the impact of the items described above, primarily as a result of completion of certain R&D
projects and our efforts to reprioritize other R&D projects. However, we continue to fund significant R&D programs within high potential areas such as Flow Cytometry and Molecular Diagnostics.



|                                            |  |                    |      |                   |   |               |  |                   |  |                   |       |               |   |      |  |         
|------------------------------------------- |  | ------------------ | ---- | ----------------- | - | ------------- |  | ----------------- |  | ----------------- | ----- | ------------- | - | ---- |  | --------
|                                            |  | Three Months Ended |      | Nine Months Ended
|                                            |  | September 30,2009  |      | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |       | PercentChange
|(in millions)                               |  |                    |      |                   |   |               |  |                   |  |                   |       |               |   |      |  |         
|Restructuring and acquisition related costs |  | $                  | 79.2 |                   | $ | 7.8           |  | >100%             |  | $                 | 127.2 |               | $ | 13.2 |  | >100%   
|Environmental remediation                   |  | $                  |     |                   | $ | 19.0          |  | (100.0)%          |  | $                 |      |               | $ | 19.0 |  | (100.0)%

Restructuring and Acquisition Related CostsRestructuring and acquisition
related costs increased by $71.4 million and $114.0 million during the three and nine months ended September 30, 2009, when compared to the prior year periods. This increase is primarily due to restructuring, integration and acquisition related
costs associated with the ODS acquisition of $68.5 million and $89.2 million for the quarter and nine months ended September 30, 2009. In addition, we incurred restructuring cost associated with the closure and relocation of certain
manufacturing and distribution sites along with activities related to our plan to vacate our Fullerton, California facility and consolidate those operations to other existing facilities. The restructuring cost related to the closure and relocation
of these sites includes severance, relocation, and other exit costs.

Environmental RemediationDuring the third
quarter 2008 we recorded a $19.0 million environmental remediation charge related to our Orange County site consolidation and closure of our Fullerton, California site. In connection with this consolidation, we began conducting environmental studies
at our Fullerton, California site, which suggests that soil and groundwater at the site contain chemicals previously used in operations at the facility. The $19.0 million represents our best estimate of future expenditures for evaluation and
remediation at the site. We believe that the ultimate costs may range from $10 million to $30 million.



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##### Table of Contents

Operating Income

Management evaluates business segment performance based on revenue and operating income exclusive of certain adjustments, which are not allocated to our segments for performance assessment by our chief
operating decision maker.

The following table presents operating income for each reportable segment for the three and nine
months ended September 30, 2009 and 2008 and a reconciliation of our segment operating income to consolidated earnings before income taxes (dollar amounts in millions):





|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|------------------------------------------------------- |  | -------------------------------- | ------ | ------------------------------- | - | ------ |  | ---- | ------- |  | - | ------
|                                                        |  | *Three Months EndedSeptember 30, |        | *Nine Months EndedSeptember 30,
|                                                        |  | 2009                             |        | 2008                            |   | 2009   |  | 2008
|Operating income:                                       |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Clinical Diagnostics                                    |  | $                                | 88.5   |                                 | $ | 62.0   |  | $    | 234.8   |  | $ | 185.4 
|Life Science                                            |  |                                  | 15.2   |                                 |   | 14.7   |  |      | 32.5    |  |   | 43.3  
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Total segment operating income                          |  |                                  | 103.7  |                                 |   | 76.7   |  |      | 267.2   |  |   | 228.7 
|Restructuring and acquisition related costs             |  |                                  | (79.2) |                                 |   | (7.8)  |  |      | (127.2) |  |   | (13.2)
|Fair market value inventory adjustment                  |  |                                  | (8.8)  |                                 |   |       |  |      | (8.8)   |  |   | (1.0) 
|Discontinued product write-off                          |  |                                  | (1.6)  |                                 |   |       |  |      | (1.6)   |  |   |      
|Litigation accrual                                      |  |                                  | (3.9)  |                                 |   |       |  |      | (3.9)   |  |   |      
|Technology license used in R&D for Clinical Diagnostics |  |                                  | (5.8)  |                                 |   | (11.7) |  |      | (5.8)   |  |   | (23.7)
|Environmental remediation                               |  |                                  | -      |                                 |   | (19.0) |  |      | -       |  |   | (19.0)
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Total operating income                                  |  |                                  | 4.4    |                                 |   | 38.2   |  |      | 119.9   |  |   | 171.8 
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|                                                        |  |                                  |        |                                
|Non-operating (income) expense:                         |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Interest income                                         |  |                                  | (1.4)  |                                 |   | (2.4)  |  |      | (4.0)   |  |   | (8.6) 
|Interest expense                                        |  |                                  | 24.3   |                                 |   | 16.7   |  |      | 52.7    |  |   | 44.5  
|Other                                                   |  |                                  | (18.0) |                                 |   | (2.0)  |  |      | (24.9)  |  |   | (5.5) 
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Total non-operating (income) expense                    |  |                                  | 4.9    |                                 |   | 12.3   |  |      | 23.8    |  |   | 30.4  
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       
|Earnings (loss) before income taxes                     |  | $                                | (0.5)  |                                 | $ | 25.9   |  | $    | 96.1    |  | $ | 141.4 
|                                                        |  |                                  |        |                                 |   |        |  |      |         |  |   |       



| | * | Amounts may not foot due to rounding
| | - | ------------------------------------

The increase in operating income generated from the Clinical Diagnostics segment is primarily due to higher revenue derived from the ODS acquisition coupled with lower SG&A resulting from our cost containment initiatives.

The decrease in operating income for our Life Science segment during the nine months ended September 30, 2009 was primarily due to a
12.8% decrease in revenue. The operating income for the quarter, however, increased due to lower operating costs, partially offset by lower revenue.

Non-Operating (Income) Expense



|                           |  |                    |        |                   |   |               |  |                   |  |                   |        |               |   |       |  |        
|-------------------------- |  | ------------------ | ------ | ----------------- | - | ------------- |  | ----------------- |  | ----------------- | ------ | ------------- | - | ----- |  | -------
|                           |  | Three Months Ended |        | Nine Months Ended
|                           |  | September 30,2009  |        | September 30,2008 |   | PercentChange |  | September 30,2009 |  | September 30,2008 |        | PercentChange
|(in millions)              |  |                    |        |                   |   |               |  |                   |  |                   |        |               |   |       |  |        
|Interest income            |  | $                  | (1.4)  |                   | $ | (2.4)         |  | (41.7)%           |  | $                 | (4.0)  |               | $ | (8.6) |  | (53.5)%
|Interest expense           |  | $                  | 24.3   |                   | $ | 16.7          |  | 45.5%             |  | $                 | 52.7   |               | $ | 44.5  |  | 18.4%  
|Other non-operating income |  | $                  | (18.0) |                   | $ | (2.0)         |  | >100.0%           |  | $                 | (24.9) |               | $ | (5.5) |  | >100.0%

Interest income decreased during both the quarter and nine months of 2009 due, in
part, to our decreasing investment in STL receivables coupled with overall lower rates of interest on our cash and investment balances.

Interest expense increased by $7.6 million and $8.2 million during the three and nine months ended September 30, 2009, respectively, due primarily to additional interest expense during the quarter of
$8.2 million resulting from our $500 million



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##### Table of Contents

issuance of debt to finance the ODS acquisition. Interest expense for all periods reflects our adoption of the new accounting standard related to convertible debt (ASC 470-20) which effectively
increases the amount of interest expense recorded on our convertible debt instruments. See Note 1, Recently Adopted Accounting Standards, for a detailed discussion of the accounting change. The adoption of this standard was
applied retrospectively to the prior year financial results. Interest expense increased by $3.6 million and $3.4 million for the three months ended September 30, 2009 and 2008, respectively, and $10.7 million and $10.0 million for the nine
months ended September 30, 2009 and 2008, respectively, as a result of implementing this accounting change.

The increase
in other non-operating income for the three and nine months ended September 30, 2009 was primarily related to foreign currency gains related to the ODS acquisition. More specifically, we recognized a $10.9 million and $19.6 million hedging gain
during the quarter and nine months ended September 30, 2009, respectively, associated with forward contracts to purchase Japanese yen. Given that our purchase price for the ODS acquisition was paid in yen, we entered into forward contracts in
an effort to mitigate the risk associated with changes in the value of the yen which we settled as of July 30, 2009. We recorded a $2.2 million foreign currency gain on the value of the yen for the period between settling the forward contract
and the transfer of funds in yen to purchase ODS. Additionally, we recorded a $4.9 million foreign currency gain related to the settlement of intercompany loans related to the ODS acquisition.

Income Taxes

At the end of
each interim reporting period, an estimate is made of the effective income tax rate expected to be applicable for the full year. The effective income tax rate determined is used to provide for income taxes on a year-to-date basis. The tax effect of
any tax law changes and certain other discrete events are reflected in the period in which they occur.

The effective tax rate
for the three months ended September 30, 2009 and September 30, 2008 was 400.0% and 6.9%, respectively. For the nine months ended September 30, 2009 and September 30, 2008, the effective tax rate was 13.7% and 21.6%,
respectively. The effective tax rate of 400.0% for the three months ended September 30, 2009 results from a small pretax loss coupled with a $2.0 million tax benefit in the quarter. This tax benefit results primarily from a decrease in the
estimated annual effective tax rate applied in the current quarter, resulting from the tax effect of various costs from the ODS acquisition. Discrete events arising in the three months ended September 30, 2009 also impacted the respective tax
rates. The discrete items which reduced tax expense for the current quarter consisted primarily of changes to various tax credits and recognition of a deferred tax asset for a foreign net operating loss.

Our effective tax rate for the full year 2009 could be impacted by a number of factors such as new tax laws, interpretations of existing tax
laws, rulings by and settlements with taxing authorities, expiration of the statute of limitations for open years, our use of tax credits and our geographic profit mix. We expect our effective tax rate for the year to be approximately 21% compared
to 22% for 2008. The decrease in tax rate is primarily attributable to the tax impact of costs associated with the ODS acquisition.

During the first quarter of 2009, we filed certain tax accounting method changes with the U.S. Internal Revenue Service (IRS). As a result of these accounting method changes, certain tax deductions were accelerated and reflected
in the 2008 federal income tax return, resulting in a net operating loss for that year for tax purposes. This loss has been carried back to the 2006 tax year and reduces taxes previously paid. In the second quarter of 2009 we received tax refunds
related to the 2008 tax year of $31.0 million as a result of these accounting method changes. As a result of the carryback of the 2008 net operating loss to 2006, we expect to receive a tax refund of $15.0 million for the 2006 tax year. In addition,
the carryback of the loss to 2006 freed up certain tax credits in that year which we carried forward to the 2007 tax year. We also carried back tax credits from 2008 to the 2007 tax year. These will result in an additional tax refund for the 2007
tax year of $20.0 million. Thus we expect a total of $35.0 million in additional tax refunds in the fourth quarter resulting from these accounting method changes. The acceleration of these tax deductions reduces certain permanent tax benefits in tax
years 2008 and 2006. The impact of the reduction of these permanent tax benefits, totaling $3.4 million, was reflected as a discrete item in the tax provision for the nine months ended September 30, 2009.

Liquidity and Capital Resources

Liquidity is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition, liquidity includes the ability to obtain appropriate financing and to convert those assets that are
no longer required in meeting existing strategic and financing objectives into cash. Therefore, for purposes of achieving long-range business objectives and meeting our commitments, liquidity cannot be considered separately from capital resources
that consist of current and potentially available funds.

Our business model, in particular recurring revenue comprised of
consumable supplies (including reagent test kits), service, and OTL payments, allows us to generate substantial operating cash flows. We are currently investing a substantial portion of this cash flow in instruments leased to customers. We expect
operating cash flows to increase as our OTL lease portfolio continues to build. We anticipate our operating cash flows together with the funds available through our credit facilities will continue to satisfy our working capital requirements. During
the next twelve months, we anticipate using our operating cash flows and other sources of liquidity to:



| |  |  | facilitate growth in the business by developing, marketing and launching new products. We expect new product offerings to come from new technologies
gained through licensing arrangements, existing R&D projects, and business acquisitions,
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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| |  |  | maintain or raise our quarterly dividend. Our dividend paid in the third quarter was $0.17 per share. In October 2009, our Board of Directors declared
a quarterly cash dividend of $0.18 per share, payable on November 23, 2009 to stockholders of record on November 9, 2009. Although dividend payments are at the discretion of our Board of Directors, we expect to pay quarterly dividends in
2010 of $0.18 per share,
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | pay costs associated with our supply chain and restructuring initiatives,
| | - |  | -------------------------------------------------------------------------



| |  |  | continue our Orange County consolidation project (as further described below), and
| | - |  | ----------------------------------------------------------------------------------



| |  |  | make pension and postretirement plan contributions of approximately $21 million.
| | - |  | --------------------------------------------------------------------------------

We anticipate that our Orange County consolidation project will result in additional cash outflows of approximately $25 to $35 million
during the remainder of 2009, the vast majority of which is associated with renovations and other capital expenditures. Although we have begun to incur some payments associated with the environmental clean up of our Fullerton facility, we expect
more significant payments to occur in 2010 and beyond. Proceeds from the potential sale of the Fullerton facility are not anticipated until 2010 or later.

Following is a summary of our cash flow from operating, investing and financing activities, as reflected in our Condensed Consolidated Statements of Cash Flows (in millions):



|                                                      |  |                                |           |      |   |        
|----------------------------------------------------- |  | ------------------------------ | --------- | ---- | - | -------
|                                                      |  | Nine MonthsEnded September 30,
|                                                      |  | 2009                           |           | 2008
|Cash provided by (used in):                           |  |                                |           |      |   |        
|Operating activities                                  |  | $                              | 402.2     |      | $ | 243.9  
|Investing activities                                  |  |                                | (1,028.1) |      |   | (208.8)
|Financing activities                                  |  |                                | 765.3     |      |   | (45.9) 
|Effect of exchange rates on cash and cash equivalents |  |                                | 2.9       |      |   | (0.8)  
|                                                      |  |                                |           |      |   |        
|Change in cash and cash equivalents                   |  | $                              | 142.3     |      | $ | (11.6) 
|                                                      |  |                                |           |      |   |        

Cash provided by operating activities for the first nine months of 2009 increased by
$158.3 million due primarily to an increase in accrued costs related to restructuring. Improved collection efforts for customer receivables, a $31 million tax refund related to net operating loss carryback associated with a tax accounting method
change and timing of payments for expenses also contributed to increased cash flows. The above increases in cash provided by operating activities were partially offset by higher pension contributions.

Investing activities used cash of $1,028.1 million in the first nine months of 2009, compared to $208.8 million in the same period in 2008,
an increase of $819.3 million. This increase is primarily related to the acquisition of ODS for a purchase price, net of cash received, of approximately $786 million on August 3, 2009 coupled with the $16.4 million acquisition of Cogenics on
April 14, 2009. Additionally, there was an increase in payments for property, plant and equipment, primarily due to the Orange County consolidation project, offset by a decrease in spending for new customer leased instruments.

Cash flows provided by financing activities increased by $811.2 million compared to the same period in the prior year due primarily to our
$500 million debt offering completed in May 2009 and the $240 million equity offering completed in July 2009 to finance a portion of the ODS acquisition, which closed on August 3, 2009.

Financing Arrangements

At
September 30, 2009 approximately $189 million of unused, uncommitted, short-term lines of credit were available to our subsidiaries outside the U.S. at various interest rates. In the U.S., $40 million in unused, uncommitted, short-term lines of
credit at prevailing market rates were available, excluding the accounts receivable securitization program described below.

Our wholly owned subsidiary, Beckman Coulter Finance Company, LLC (BCFC), a Delaware limited liability company, entered into an accounts receivable securitization program with several financial institutions. The securitization
facility is on a 364-day revolving basis. As part of the securitization program, we transferred our interest in a defined pool of accounts receivable to BCFC. In turn, BCFC sold an ownership interest in the underlying receivables to the multi-seller
conduits administered by a third party bank. Sale of receivables under the program is accounted for as a secured borrowing. The cost of funds under this program varies based on changes in interest rates. The term of the agreement extends to
October 27, 2010 and the maximum borrowing amount is $125.0 million. We did not have any amounts drawn on the facility as of September 30, 2009.



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In May 2009, we entered into an Amended and Restated Credit Agreement (the Credit
Facility) and extended the maturity date of the Credit Facility to May 2012. The Credit Facility provides us with a $350.0 million revolving line of credit, which may be increased in $50.0 million increments up to a maximum line of credit of
$450.0 million. Interest on advances is determined using formulas specified in the agreement, generally, an approximation of LIBOR plus 2.25% to 2.875% margin with the precise margin determinable based on our long-term senior unsecured
non-credit-enhanced debt rating, which as of September 30, 2009 was 2.75%. We also must pay a facility fee of 0.50% per annum on the aggregate average daily amount of each lenders commitment with the precise margin determinable based
on our long-term senior unsecured non-credit-enhanced debt rating, which as of September 30, 2009 was a S&P rating of BBB. At September 30, 2009, no amounts were outstanding under the Credit Facility.

On May 18, 2009, we issued $250 million principal amount of the Companys 6% Senior Notes due 2015 and $250 million principal
amount of the Companys 7% Senior Notes due 2019. In connection with the Notes, we incurred issuance costs of $4.8 million and the Notes were issued at a discount of $2.3 million which is being amortized over the estimated life of the Notes.
The proceeds from the Notes were used to fund the ODS acquisition.

On May 19, 2009 we entered into forward sale
agreements for the sale of an aggregate of 4,722,989 shares of our common stock including an amount equal to the underwriters over-allotment option in the public offering. The initial forward sale price was $50.75 per share which was
equivalent to the public offering price of $53.00 less the underwriting discount of $2.25. On July 27, 2009, we completed the forward sale of our common stock, as described in Note 11, Debt and Equity Financing and received
total net proceeds of approximately $240 million which was used to fund the ODS acquisition. We incurred issuance costs and underwriting fees of $11.8 million in connection with this offering, which were deducted from the proceeds of the offering.

Global Market and Economic Conditions

Global market and economic conditions have been, and continue to be, disrupted and volatile. Concerns about the systemic impact of geopolitical issues, the availability and cost of credit, currency
volatility, slowing and declining global economies, the United States mortgage market and a declining real estate market in the U.S. and elsewhere have contributed to the increased market volatility as well as diminished expectations for the United
States and other world economies. These conditions combined with declining business and consumer confidence and increased unemployment have contributed to the market volatility.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid
credit markets. Concern about the stability of the markets generally and the strength of counterparties specifically has led many lenders and institutional investors to reduce, or in some cases cease, to provide funding to borrowers. The economic
conditions also might impact counterparties ability to perform under existing hedging agreements. Continued turbulence in the United States and international markets and economies may adversely affect our liquidity and financial condition and
the liquidity and financial condition of our customers and suppliers. If these market conditions continue, they may limit our ability, and the ability of our customers and suppliers, to replace maturing liabilities and access the capital markets to
meet liquidity needs, which could result in an adverse effect on our financial condition and results of operations.

The
disruptions in the equity and credit markets, as mentioned above, have resulted in depressed security values in most types of investment and non-investment grade bonds and debt obligations and mortgage and asset-backed securities, as well as the
failure of the auction mechanism for certain of those asset-backed securities. Our pension plans invest in a variety of equity and debt securities, including securities that have been impacted by this disruption. Although, the value of our U.S.
pension plan assets has increased by approximately $50 million as of September 30, 2009 as compared to December 31, 2008, our U.S. pension plan is underfunded at September 30, 2009 as a result of the decline in the credit and equity
markets. Our worldwide pension expense is expected to increase by about $24 million in 2009 compared to 2008. We expect to make additional contributions of about $16 million to our U.S. and international pension plans during the remainder of 2009.
We may decide to make additional pension plan contributions beyond the required minimum in the future.

Notwithstanding the
above, we believe our cash flows from operations together with existing cash balances, available borrowings under our credit facility and other sources of liquidity will be adequate to meet our anticipated requirements for interest payments, other
debt service obligations, working capital, capital expenditures, lease payments, pension contributions and other operating needs for the next year. There can be no assurance, however, that our business will continue to generate cash flow at or above
current levels. Future operating performance and our ability to service or refinance existing indebtedness will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control as described
above.



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Recent Accounting Developments

See Note 1, Nature of Business and Summary of Significant Accounting Policies, of the Notes to the Condensed Consolidated
Financial Statements in this filing for a description of recently adopted accounting pronouncements as well as new accounting standards not yet adopted.

Other Events



|Item 3. | Quantitative and Qualitative Disclosures About Market Risk
|------- | ----------------------------------------------------------

For information regarding our exposure to certain market risks, see Item 7A Quantitative and Qualitative Disclosures About Market Risk in our Annual Report on Form 10-K for the
fiscal year ended December 31, 2008. Except as noted below, there have been no significant changes in our market risk exposures from the amounts and descriptions disclosed therein.

We have significant foreign currency exposures related to the Euro, Japanese yen, Australian dollar, British Pound Sterling and
Canadian dollar. As of September 30, 2009 and December 31, 2008, the notional amounts of all derivative foreign exchange contracts were $593.7 million and $257.8 million, respectively. Notional amounts are stated in U.S. dollar
equivalents at the spot exchange rate at the respective dates. The net fair values of all derivative foreign exchange contracts as of September 30, 2009 and December 31, 2008 were a net asset of $0.8 million and $25.7 million,
respectively. We estimated the sensitivity of the fair value of all derivative foreign exchange contracts to a hypothetical 10% strengthening and 10% weakening of the spot exchange rates for the U.S. dollar against the foreign currencies at
September 30, 2009. The analysis showed that a 10% strengthening of the U.S. dollar would result in loss from a fair value change of $7.4 million and a 10% weakening of the U.S. dollar would result in gain from a fair value change of $(25.3)
million in these instruments. Losses and gains on the underlying hedged transactions would largely offset any gains and losses on the fair value of the derivative contracts. These offsetting gains and losses are not reflected in the above analysis.
Significant foreign currency exposures at September 30, 2009 were not materially different than those at December 31, 2008.

Similarly, we performed a sensitivity analysis on our variable rate debt instruments. A one percentage point increase or decrease in interest rates was estimated to decrease or increase this years pre-tax earnings by $0.1 million
based on the amount of variable rate debt outstanding at September 30, 2009.

Additional information with respect to our
foreign currency and interest rate exposures is discussed in Note 4, Derivativesand Note 5, Fair Value Measurements of the Notes to Condensed Consolidated Financial Statements included in Part I Financial
Information, Item 1 Financial Statements of this filing.



|Item 4. | Controls and Procedures
|------- | -----------------------

Disclosure
Controls and Procedures.

As of the end of the period covered by this report, we carried out an evaluation, under the
supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b)
under the Exchange Act. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this report, at the reasonable level
of assurance.

Changes in Internal Control Over Financial Reporting.

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We completed the acquisition of the ODS business on August 3, 2009, as more fully described in Note 2, Acquisitions,
to the Condensed Consolidated Financial Statements in this Form 10-Q. As part of our ongoing integration activities, we are in the process of integrating our controls and procedures into the ODS business.



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PART IIOTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

Certain of our legal proceedings in which we are involved are discussed in Note 14, Commitments and Contingencies, of the Notes to Consolidated Financial Statements in Item 1 of this Form 10-Q and are incorporated
herein by reference.



|Item 1A. | Risk Factors
|-------- | ------------

We face significant
competition, and our failure to compete effectively could adversely affect our sales and results of operations.

We face
significant competition from many domestic and international manufacturers, with many of these companies participating in one or more parts of each of our markets. Some of these competitors are divisions or subsidiaries of corporations with
substantial resources. We also compete with several companies that offer reagents, supplies and service for laboratory instruments that are manufactured by us or others. Our sales and results of operations may be adversely affected by loss of market
share through aggressive competition, the rate at which new products are introduced by us and our competitors and the extent to which new products displace existing technologies and competitive pricing especially in areas where currency has an
effect.

We are subject to various federal, state, local and foreign regulations and compliance with these laws or the adoption of new laws
or regulations, including potential pending health care reform, could cause us to incur substantial costs and adversely affect our results of operations.

Our products and operations are subject to a number of federal, state, local and foreign laws and regulations. A determination that our products or operations are not in compliance with these laws and
regulations could subject us to civil and criminal penalties, prevent us from manufacturing or selling certain of our products and cause us to incur substantial costs in order to be in compliance. In addition, changes to existing laws or
regulations, changes in interpretation of these laws and regulations or the adoption of new laws or regulations, including the effect of potential health care reforms, also could prevent us from manufacturing or selling our products, reduce funding
for government and academic research and cause us to incur substantial compliance costs. The passage of potential health care reforms, changes in tax laws and their interpretation in the United States and other countries, the effect of taxes and
changes in tax policy also may adversely affect our results of operations.

Current healthcare reform changes, if adopted, may have a
material adverse effect on our operating results.

The U.S. Administration has announced healthcare reform to be one of its
priorities. Members of Congress have proposed major healthcare reform measures that, if adopted, could have a material impact on our business. There are pending proposals in both the House and Senate, each intended to institute substantial changes
to the way health care is financed by both governmental and private insurers. Pending provisions, if adopted, could include imposition of a non-deductible fee on the medical device industry. If the proposals are passed by Congress, President Obama
can either sign the legislation into law or veto it.

We must continue to market and improve existing products and develop new products
that meet customer needs and expectations or our business and results of operations will be adversely impacted.

Our
ability to continue to grow depends on our success in continuing to market and improve our existing products and develop new products that meet customer needs and expectations. Improving existing products and developing new products requires us to
successfully integrate hardware, software and chemistry components. Consequently, the expected introductions of new products may be impacted by factors such as complexity and uncertainty in the development of new high-technology products and
availability of qualified engineers, programmers and other key personnel. The viability of supply partners also may impact new product introductions for products we distribute. In addition, our ability to introduce new products and to continue
marketing existing products may be affected by patents and other intellectual property rights of others, our ability to protect our intellectual property from others, the acquisition and integration of other companies and intellectual property and
our ability to obtain regulatory approvals, including delays in obtaining any government marketing authorizations necessary to market the products, particularly with respect to clinical diagnostics products. Factors affecting the introduction of
molecular diagnostic products include the inability to develop clinical diagnostic tests based on new technologies, a determination that the tests do not provide sufficient precision and accuracy, identification of additional necessary intellectual
property rights, failure to establish the clinical utility of these tests during clinical studies and delays resulting from the timing and scope of regulatory agency reviews.

Our business could be adversely affected if we do not prevail in present or future third party intellectual property litigation adverse to our products or if our patents or other intellectual property
rights are challenged, invalidated, circumvented or expire.

We cannot assure you that our products will be free of
intellectual property rights of others or that a court will not find such products to infringe third party rights. Patent disputes are frequent, costly and may preclude or delay product commercialization.



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We may have to pay significant licensing fees to obtain access to third party intellectual property rights to make and sell current products or to introduce new products and cannot guarantee that
such licenses will be available on terms actable to us, or at all. We also cannot assure you that our issued patents will include claims sufficiently broad to prevent competitors from developing competing products or that pending patent applications
will result in issued patents. Obtaining and maintaining patents is an iterative process with patent offices worldwide. Our patents may not protect us against competitors with similar products or technologies, because competing products or
technologies may not infringe our patents. The enforcement of our issued patents requires the filing and prosecution of legal actions in countries around the world, and we cannot assure you that we will prevail in such actions.

We rely on certain suppliers and manufacturers for raw materials and other products, and fluctuations in the availability and price of such products and
services may interfere with our ability to meet our customers needs.

Difficulty in obtaining raw materials and
components for our products, especially in the rapidly evolving electronic components market, could affect our ability to achieve anticipated production levels. For some of our products we are dependent on a small number of suppliers of finished
products and of critical raw materials and components and our ability to obtain, enter into and maintain contracts with these suppliers. We cannot assure you that we will be able to obtain, enter into or maintain all such contracts in the future. On
occasion, we have been forced to redesign portions of products when a supplier of critical raw materials or components terminated its contract or no longer made the materials or components available. If we are unable to achieve anticipated
production levels and meet our customers needs, our operating results could be adversely affected. In addition, our results of operations may be significantly impacted by unanticipated increases in the costs of labor, raw materials, freight,
utilities and other items needed to develop, manufacture and maintain our products and operate our business. Suppliers also may deliver components or materials that do not meet specifications preventing us from manufacturing products that meet our
design specifications or customer requirements.

Consolidation of our customer base and the formation of group purchasing organizations
could adversely affect our sales and results of operations.

Consolidation among health care providers and the formation of
buying groups has put pressure on pricing and sales of our products, and in some instances, required payment of fees to group purchasing organizations. Our success in these areas depends partly on our ability to enter into contracts with integrated
health networks and group purchasing organizations. If we are unable to enter into contracts with these group purchasing organizations and integrated health networks on terms acceptable to us, our sales and results of operations may be adversely
affected. Even if we are able to enter into these contracts, they may be on terms that negatively affect our current or future profitability.

Reductions in government funding to our customers could negatively impact our sales and results of operations.

Many of our customers rely on government funding and on prompt and full reimbursement by Medicare and equivalent programs outside of the United States. In addition, our sales are affected by factors such as:



| |  |  | the level of government funding for clinical testing, biomedical research, bioterrorism, forensics, and food safety,
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | pharmaceutical company spending policies, and
| | - |  | ---------------------------------------------



| |  |  | access to capital by biotechnology start ups.
| | - |  | ---------------------------------------------

A reduction in the amount or types of government funding or reimbursement that affect our customers, as well as the unavailability of capital to our clinical diagnostics and biomedical research customers,
could have a negative impact on our sales. Global economic uncertainty can result in lower levels of government funding or reimbursement.



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Our international operations expose us to foreign currency exchange fluctuations.

We operate a substantial portion of our business outside of the United States and are therefore exposed to fluctuations in the exchange rate
between the U.S. dollar and the currencies in which our foreign subsidiaries and dealers receive revenue and pay expenses. With a strengthening U.S. dollar, this exposure includes a negative impact on margins on sales of our products in foreign
countries that are manufactured in the United States. We may enter into currency hedging arrangements in an effort to stabilize certain of these fluctuations. There are certain costs associated with these currency hedging arrangements, and we cannot
be certain that such arrangements will have the full intended effect. Our currency exposures may not be hedged exposing us to losses on our assets and cash flows denominated in these currencies. Our dealers may experience slower payment terms from
their customers or have trouble paying for the purchases due to a stronger U.S. dollar. Further, we are exposed to counter party risks in the event that our counterparties do not perform in accordance with the contract terms.

Global market, economic and political conditions and natural disasters may adversely affect our operations and performance.

Our operations and performance depend significantly on worldwide market economic and political conditions and their impact on levels of
certain customer spending, which may deteriorate significantly in many countries and regions, including without limitation the United States, particularly in light of the current worldwide market disruptions and economic downturn, and may remain
depressed for the foreseeable future. For example, global political conditions and general economic conditions in foreign countries in which we do significant business, such as France, Germany, India, Japan and China, could have a negative impact on
our sales. These disruptions could adversely affect our customers ability to pay for products or purchase additional products. These conditions also may adversely affect our suppliers, which could cause disruptions in our ability to produce
our products. In addition, economic and market volatility and disruption, such as the current worldwide market disruptions and economic downturn, may adversely affect the cost and availability of credit. Concern about market stability and
counterparty strength may lead lenders and institutional investors to reduce or cease to provide funding to borrowers. Natural disasters, such as hurricanes and earthquakes, could adversely affect our customers and our ability to manufacture and
deliver products. Any of these market, economic, political or natural disaster factors could have a material adverse effect on demand for our products, our ability to manufacture, support and distribute products, our financial condition and
operating results, and the terms of equity and debt capital and our ability to issue them.

Costs associated with our supply chain
initiatives will affect earnings and results of operations.

We have announced several relocation plans, including our plan
to vacate our Fullerton, California facility and consolidate those operations to other facilities. In connection with this consolidation and the related closure of our Fullerton, California site, we have initiated environmental studies of the
Fullerton facility and could incur substantial costs in addition to those already estimated and recorded depending upon determination of the remediation requirements. We may experience difficulties, delays or unexpected costs and not achieve
anticipated cost savings from our relocation and consolidation plans. The scope and timing of the relocations and related charges and savings could impact our earnings and results of operations.

We are subject to various income tax risks and regulations throughout the world.

By conducting business in the United States and many other countries, we must continually interpret, and then comply with, the income tax
rules and regulations in these countries. Different interpretations of income tax rules and regulations as applied to our facts by us and applicable tax authorities throughout the world could result, either historically or prospectively, in adverse
impacts to our worldwide effective income tax rates and income tax liabilities. Other factors that could impact our worldwide effective tax rates and income tax liabilities are:



| |  |  | the amount of taxable income in the various countries in which we conduct business,
| | - |  | -----------------------------------------------------------------------------------



| |  |  | the tax rates in those countries,
| | - |  | ---------------------------------



| |  |  | income tax treaties between countries
| | - |  | -------------------------------------



| |  |  | the extent to which income is repatriated between countries,
| | - |  | ------------------------------------------------------------



| |  |  | future changes in income tax rules and regulations, and
| | - |  | -------------------------------------------------------



| |  |  | adoption of new types of taxes such as consumption, sales and value added taxes.
| | - |  | --------------------------------------------------------------------------------

Our investment in marketable securities is significant and is subject to market, interest rate and credit risk that may reduce its value.

Within the pension plan assets, we maintain a significant portfolio of marketable securities as well as other assets subject to market
fluctuations. Our earnings and stockholders equity could be adversely affected by changes in the value of this portfolio. In



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particular, the value of our investments may be adversely affected by general economic conditions, changes in interest rates, downgrades in the corporate bonds included in the portfolio and other
factors. Each of these events may cause us to reduce the carrying value of our investment portfolio and may result in higher pension expense or our pension plans being further under funded.

Acquisitions and divestitures pose financial and other risks and challenges.

We routinely explore acquiring other businesses and assets that would fit strategically. From time to time, we also may consider disposing of
certain assets, subsidiaries or lines of business that are less of a strategic fit within our portfolio. Potential acquisitions or divestitures present financial, managerial and operational challenges, including diversion of management attention,
difficulty with integrating or separating personnel and financial and other systems, increased expenses, assumption of unknown liabilities, indemnities and potential disputes with the buyers or sellers. There can be no assurance that we will engage
in any acquisitions or divestitures or that we will be able to do so on terms that will result in any expected benefits. Acquisitions financed with borrowings could put financial stress on our earnings resulting in materially higher interest rates.

If we do not achieve the contemplated benefits of our acquisition of the Diagnostic Systems Business, our business and financial condition
may be materially impaired.

The ODS acquisition increased the size of our company and expanded the geographic areas in
which we operate. We cannot assure that we will achieve the desired benefits from the acquisition. Our acquisition of the Diagnostic Systems Business involves the integration of the Diagnostic Systems Business with our existing Clinical Diagnostics
business. If we cannot successfully integrate the Diagnostic Systems Business operations with our existing business, we may experience material negative consequences to our business, financial condition or results of operations. The integration of
the two businesses that have previously operated separately will be a costly and time-consuming process that will involve a number of risks, including, but not limited to:



| |  |  | diversion of senior managements attention from the management of daily operations to the integration of operations;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | demands on the management of our Clinical Diagnostics business related to the increase in the size and scope of the distribution business for which
they are responsible;
| | - |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | difficulties in the assimilation of different corporate cultures, practices and sales and distribution methodologies, as well as in the assimilation
and retention of geographically dispersed operations and personnel;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | our reliance on Olympus Corporation to provide certain transitional services, such as ongoing financial information and other data or support needed to
successfully operate the Diagnostic Systems Business until we have completed the integration for these services;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | the potential loss of key personnel who choose not to join the combined business;
| | - |  | ---------------------------------------------------------------------------------



| |  |  | difficulties in implementing information technology to support the entire combined business;
| | - |  | --------------------------------------------------------------------------------------------



| |  |  | the potential loss of key customers who choose not to do business with the combined business;
| | - |  | ---------------------------------------------------------------------------------------------



| |  |  | larger foreign operations and increased exposure to risks relating to business operations outside the United States;
| | - |  | --------------------------------------------------------------------------------------------------------------------



| |  |  | difficulties and unanticipated expenses related to the integration of facilities, departments, systems, including accounting systems, computer and
other technologies, books and records and procedures, as well as in maintaining uniform standards, including internal accounting controls, procedures and policies;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | difficulties in obtaining the leverage across the companies installed base that is anticipated, which could offset any such savings and other
synergies resulting from the ODS acquisition;
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | difficulties in implementing anticipated changes to infrastructure, which could offset any such savings and other synergies resulting from the ODS
acquisition;
| | - |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | fluctuations in foreign currency rates, which could cause the operating results of the Diagnostic Systems Business and any such savings or other
synergies we expect from the acquisition to fail to meet our current expectations;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | costs and expenses associated with any undisclosed or potential liabilities; and
| | - |  | --------------------------------------------------------------------------------



| |  |  | the use of cash resources and increased capital expenditures on integration and implementation activities in excess of our current expectations, which
could offset any such savings and other synergies resulting from the Diagnostic Systems Business acquisition.
| | - |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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Even if we are able to successfully integrate the operations of the Diagnostic Systems
Business, we may not be able to realize the cost savings, synergies and growth that we anticipate from the integration in the time frame that we currently expect, and the costs of achieving these benefits may be higher than what we currently expect.

The Diagnostic Systems Business operations are subject to their own risks, which we may not be able to manage successfully. There may be
additional risks resulting from the Diagnostic Systems Business acquisition that are not presently known to us which could adversely affect us.

The results of operations of the Diagnostic Systems Business are subject to many of the same risks that affect our financial condition and results of operations and, more specifically, those of our
Clinical Diagnostics business. There may be additional risks resulting from the Diagnostic Systems Business acquisition that are not presently known to us. Any discovery of adverse information concerning the Diagnostic Systems Business after the
closing of the acquisition could be material and, in many cases, we would have limited rights of recovery. The indemnification provided in the master purchase agreement may not be sufficient to protect us from, or compensate us for, all losses
resulting from the acquisition or the Diagnostic Systems Businesss prior operations. For example, under the terms of the master purchase agreement, indemnification is limited to certain subject matters and the maximum aggregate amount of such
losses for which Olympus will indemnify us is, subject to certain exceptions, limited to 12.5% of the purchase price of the Diagnostic Systems Business. A material loss associated with the Diagnostic Systems Business acquisition for which there is
not adequate indemnification could negatively affect our results of operations, our financial condition and our reputation in the industry and reduce the anticipated benefits of the acquisition.



|Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds
|------- | -----------------------------------------------------------

No repurchases were made pursuant to our share repurchase program during the three months ended September 30, 2009.



|Item 6. | Exhibits
|------- | --------

A list of
exhibits filed with this Form 10-Q is set forth in the Exhibit Index and is incorporated by reference.



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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.



|                       |  |                       |  |                                                                  
|---------------------- |  | --------------------- |  | -----------------------------------------------------------------
|                       |  | BECKMAN COULTER, INC.
|                       |  | (Registrant)         
|                       |  |                      
|Date: November 5, 2009 |  | By                    |  | /s/Scott Garrett                                                 
|                       |  |                       |  | Scott Garrett                                                    
|                       |  |                       |  | Chairman of the Board, President and Chief Executive Officer     
|                       |  |                      
|Date: November 5, 2009 |  | By                    |  | /s/Charles P. Slacik                                             
|                       |  |                       |  | Charles P. Slacik                                                
|                       |  |                       |  | Senior Vice President & Chief Financial Officer                  
|                       |  |                      
|Date: November 5, 2009 |  | By                    |  | /s/Carolyn D. Beaver                                             
|                       |  |                       |  | Carolyn D. Beaver                                                
|                       |  |                       |  | Corporate Vice President, Controller and Chief Accounting Officer



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INDEX TO EXHIBITS



|            |  |                                                                                                             
|----------- |  | ------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Exhibit Description                                                                                         
|            | 
|15.1        |  | Report of Independent Registered Public Accounting Firm                                                     
|            | 
|15.2        |  | Letter of Acknowledgement of Use of Report on Unaudited Interim Financial Information dated November 5, 2009
|            | 
|31          |  | Rule 13a-14(a)/15d-14(a) Certification                                                                      
|            | 
|32          |  | Section 1350 Certification                                                                                  



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