SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarter ended September 30, 2002

Commission File Number 1-6926

730 Central Avenue, Murray Hill, New Jersey 07974

(Address of principal executive offices)

The accompanying notes to condensed consolidated financial statements are an

integral part of these statements.

The accompanying notes to condensed consolidated financial statements are

an integral part of these statements.

The accompanying notes to condensed consolidated financial statements are an integral part of these statements.

The accompanying notes to condensed consolidated financial statements are an

integral part of these statements.

The financial statements contained in this filing have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission and have not been audited. However, C. R. Bard, Inc. ("Bard" or the "company") believes that it has included all adjustments to the interim financial statements, consisting only of normal recurring adjustments that are necessary to present fairly Bard's consolidated financial condition as of September 30, 2002 and results of operations at the dates and for the periods presented. The results of operations for the interim periods are not necessarily indicative of results of operations for a full year. These consolidated financial statements should be read in conjunction with the Consolidated Financial Statements and Notes to Consolidated Financial Statements as filed by the company in its 2001 Annual Report on Form 10-K.

Consolidation - The consolidated financial statements include the accounts of the company and its majority-owned subsidiaries. All significant intercompany accounts and transactions are eliminated in consolidation.

Use of Estimates - The consolidated financial statements and related disclosures have been prepared in conformity with accounting principles generally accepted in the United States of America and, accordingly, include amounts based on estimates and the judgments of management. Actual results could differ from those estimates.

Reclassifications - Certain prior year amounts have been reclassified to conform to the current year presentation.

New Accounting Pronouncements - In July 2002, The Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard No. 146, "Accounting for Costs Associated with Exit or Disposal Activities" ("FAS 146"). FAS 146 reconsiders all of the guidance contained in Emerging Issues Task Force No. 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)" ("EITF 94-3"). FAS 146 applies to costs associated with (a) certain termination benefits (so called one-time termination benefits), (b) costs to terminate a contract that is not a capital lease, and (c) other associated costs; including costs to consolidate facilities or relocate employees. FAS 146 establishes that fair value is the objective for initial measurement of a liability. FAS 146 requires companies to recognize costs associated with exit or disposal activities when the liability is incurred rather tha n at the date of commitment to an exit or disposal plan. The company will adopt FAS 146 on January 1, 2003. FAS 146 will not impact the accounting for any restructuring plan approved and announced to date; however, the pronouncement will impact the accounting for any future exit or disposal activities approved on or after January 1, 2003.

Restructuring Charges - Based upon an analysis of divisional and manufacturing operations, the company committed to and approved a restructuring plan for certain divisions and manufacturing facilities. This plan resulted in pretax restructuring charges of $9,100,000 ($0.11 diluted earnings per share) in the first quarter of 2002 and a pretax restructuring charge of $24,600,000 ($0.35 diluted earnings per share) in the third quarter of 2002. These charges were recorded in other (income) expense, net and the associated liabilities are recorded in accrued expenses. These restructuring charges represent the elimination of approximately 617 employee positions and the closure of five facilities (three manufacturing locations and two administrative offices). The following table sets forth an analysis of restructuring accrual activity for the nine months ended September 30, 2002:

Through September 30, 2002, the company has eliminated 66 positions and all facility closings are in progress. In accordance with EITF 94-3, the company expects the remaining cash expenditures related to workforce reductions, lease terminations and facility closing costs to be paid out no later than one year from their accrual. The above restructuring charges are based on estimates including estimated proceeds from asset dispositions and sublease revenue.

Earnings Per Share - "Basic earnings per share" represents net income divided by the weighted average shares outstanding. "Diluted earnings per share" represents net income divided by the weighted average shares outstanding adjusted for the incremental dilution of outstanding employee stock options and stock awards. Unless indicated otherwise, per share amounts are calculated on a diluted basis.

Inventories - Inventories are stated at the lower of cost or market. Certain domestic inventories are accounted for using the last-in-first-out ("LIFO") method of determining costs. All other inventories are accounted for using the first-in-first-out ("FIFO") method. Due to changing technologies and cost containment the difference between the valuation under the LIFO method and the FIFO method is not significant. The following is a summary of inventories at September 30, 2002 and December 31, 2001:

Goodwill and Intangible Assets - In July 2001, the FASB issued Statement of Financial Accounting Standard No. 142, "Goodwill and Other Intangible Assets" ("FAS 142"). FAS 142 was effective for the company as of January 1, 2002. FAS 142 specifies the financial accounting and reporting for acquired goodwill and other intangible assets. Goodwill and intangible assets that have indefinite useful lives are no longer to be amortized but rather are to be tested for impairment annually or more frequently if impairment indicators arise. Intangible assets with finite lives continue to be amortized over their useful lives. In prior year periods, goodwill amortization was recorded in marketing, selling and administrative expense. Following is a reconciliation showing net income and related earnings per share, as reported for the quarters and nine months ended September 30, 2002 and 2001, and as adjusted to exclude amortization of goodwill:

As required by FAS 142, the company has reassessed the remaining amortization periods of intangible assets acquired on or before June 30, 2001 and assigned all goodwill to reporting units for impairment testing. During the second quarter of 2002, the company completed its initial test of goodwill and intangible asset impairment as of January 1, 2002, and determined that neither goodwill nor intangible assets were impaired. The impairment test involved the use of estimates related to the fair market value of the company's reporting units. There were no material changes to goodwill as a result of acquisitions or dispositions. The impact of currency translation increased the value of goodwill by approximately $4,400,000 for the nine months ended September 30, 2002. Balances of acquired intangible assets were as follows:

Based on current asset balances, annual forecasted amortization expense for the years 2002 through 2007 is as follows:

Short-Term Borrowings and Long-Term Debt - In 2000, the company replaced its maturing $300,000,000 committed credit facility with a $200,000,000 five-year committed credit facility that matures in May 2005 and a $100,000,000 364-day committed credit facility that last matured in May 2002. The 364-day committed credit facility was renewed during the second quarter of 2002 on substantially the same terms and matures in May of 2003. These facilities support a commercial paper program and carry variable market rates of interest and require annual commitment fees. At September 30, 2002 and December 31, 2001, there were no borrowings under these facilities. Bard maintains uncommitted credit lines with banks for short-term cash needs, and these lines were used as needed during the last three years. At September 30, 2002 and December 31, 2001, the unused, uncommitted lines of credit totaled $50,000,00075. There were no outstanding borrowings against uncommitted lines at either September 30, 2002 or December 31, 2001.

In December 1996, the company issued $150,000,000 of 6.70 percent notes due 2026. These notes may be redeemed at the option of the note holders on December 1, 2006, at a redemption price equal to the principal amount. The market value of these notes was approximately $161,100,000 at September 30, 2002. In October of 2002, the company notified the Puerto Rico Industrial Medical and Environmental Pollution Control Facilities Financing Authority of the company's intention to prepay its $3,500,000 adjustable rate industrial revenue bond, 1984 Series A. The company intends to prepay these bonds in December of 2002 and accordingly has classified the bonds at September 30, 2002 from long-term debt to short-term debt. For the nine months ended September 30, 2002, the company's cash interest payments were $5,300,000. For the nine months ended September 30, 2001, the company's cash interest payments were $7,000,000.

Derivative Instruments - The company enters into readily marketable traded forward contracts and options with financial institutions to help reduce the exposure to fluctuations between certain currencies. These contracts limit earnings volatility because gains and losses associated with exchange rate movements are generally offset by movements in the underlying hedged item. The company does not enter into these arrangements for trading or speculation purposes. The table below shows the notional amounts and fair value of the company's currency-related forward contracts and options as of September 30, 2002 and December 31, 2001.

A roll forward of the company's currency-related forward contracts and options for the nine month period ended September 30, 2002 is as follows:

In the fourth quarter of 2002, the company purchased additional Euro put options with a notional amount of approximately $40,000,000. During 2002, the company reclassified a net loss of $200,000 related to Euro put option premiums from accumulated other comprehensive loss to other (income) expense, net. The fair value of financial instruments was estimated by discounting expected cash flows using quoted foreign exchange rates as of September 30, 2002 and December 31, 2001. Judgment was employed in developing estimates of fair value; accordingly, estimates presented herein are not necessarily indicative of the amounts that the company could realize in a current market exchange. The use of different market assumptions or valuation methodologies could have a material effect on the estimated fair value amounts.

Taxes - The tax rate for the third quarter was 18.8 percent, affected by nonrecurring items. Adjusting for the impact of the nonrecurring items, the company's effective tax rate was 27.2 percent for the third quarter of 2002, a decrease of 1.3 percent from the second quarter of 2002 and a decrease of 3.0 percent from the third quarter of 2001. The changes in effective tax rate are attributable to manufacturing locations taxed at rates lower than the U.S. statutory rate and the elimination of goodwill amortization per FAS 142, which was primarily nontax-deductible. In the third quarter, the company received a new tax grant at a lower tax rate, for its Puerto Rican manufacturing operations. The lower grant rate was retroactively applied to the period from July 1, 2001 to June 30, 2002, and, accordingly, a $3,500,000 nonrecurring tax credit was booked in the third quarter related to this grant. For the nine months ended September 30, 2002, the company's cash tax payments were $31,000,000. For the nine months ended September 30, 2001, the company's cash tax payments were $19,700,000.

Legal - The company is subject to various legal proceedings and claims, including claims of alleged personal injuries as a result of exposure to natural rubber latex gloves distributed by the company and other product liability matters, environmental matters, intellectual property matters and disputes on agreements which arise in the ordinary course of business. The company believes that these legal matters will likely be disposed of over an extended period of time and should not have a material adverse impact on the company's consolidated financial position or results of operations. (See Part II - Other Information; Item 1. Legal Proceedings.)

Shareholders' Investment - On April 17, 2002, shareholders approved an amendment to the company's long-term incentive plan increasing the number of shares authorized to be issued from 9,500,000 to 11,500,000. During the first quarter of 2002, the company made certain grants in respect of restricted stock to certain executive officers. The stock will be issued and will vest or become eligible for vesting upon the occurrence of certain performance targets or other conditions. Total after-tax expense related to these awards was $3,200,000 for the nine months ended September 30, 2002. The tax benefit from employee exercises of nonqualified stock options resulted in operating cash flow of $3,500,000 and $2,600,000 for the nine-month period ended September 30, 2002 and 2001, respectively.

Segment Information - The company's management considers its business to be a single segment entity - the manufacture and sale of medical devices. The company's products generally share similar distribution channels and customers. The company designs, manufactures, packages, distributes and sells medical, surgical, diagnostic and patient care devices that are purchased by hospitals, physicians and nursing homes, many of which are used once and discarded. Management evaluates its various global product portfolios on a net sales basis. Management generally evaluates profitability and associated investment on an enterprise-wide basis due to shared infrastructures. The following table represents net sales by geographic region based on the location of the external customer.

The following table represents net sales by disease state management.

Results of Operations - Consolidated net sales for the third quarter of 2002 of $322,700,000 increased 8 percent from the 2001 third quarter net sales of $297,800,000. For the nine-month period ended September 30, 2002, consolidated net sales of $942,100,000 increased 7 percent over the 2001 nine-month period sales of $878,500,000. Net sales in the United States for the third quarter of 2002 were $234,500,000, an increase of 7 percent from the third quarter of 2001. International net sales for the third quarter of 2002 were $88,200,000, an increase of 11 percent from the third quarter of 2001. Adjusting for foreign currency translation, international net sales for the third quarter of 2002 grew 4 percent in constant currency over the prior year period. For the first nine months of 2002, U.S. net sales totaled $689,500,000, up 7 percent, as compared to the same period in 2001, while international net sales increased 7 percent to $252,600,000, as compared to the same period in 2001. Adjusting for for eign currency translation, international net sales increased 6 percent on a constant currency basis for the first nine months of 2002, as compared to the prior-year period. The primary exchange rate movement that impacts consolidated net sales growth is the U.S. dollar as compared to the Euro. The impact of foreign currency fluctuations on net sales is not indicative of the impact on net earnings due to the offsetting foreign currency impact on operating costs and expenses, costs incurred in other currencies and the company's hedging activities.

Reported net income for the third quarter was $29,800,000 and diluted earnings per share were $0.57. Included in reported net income for the quarter are nonrecurring items including pretax charges totaling $24,600,000 associated with previously announced divisional and manufacturing restructurings and a tax credit of $3,500,000. The net after-tax effect of these nonrecurring items was $14,800,000 or $0.28 per diluted share. Excluding the impact of these nonrecurring items, net income for the third quarter was $44,600,000 and diluted earnings per share were $0.85. Reported net income for the nine months ended September 30, 2002 was $108,400,000 and diluted earnings per share were $2.05. In addition to the third quarter items described above, the company reported several nonrecurring pretax items totaling $10,300,000 during the first quarter of 2002. The net after-tax effect of these nonrecurring items was $6,900,000 or $0.13 per diluted share. Excluding the impact of these nonrecurring items, net income fo r the nine-month period ended September 30, 2002 was $130,100,000 and diluted earnings per share were $2.46.

Net Sales - Bard utilizes disease state management - an approach that expands the focus from products and technologies to the underlying clinical condition - to position the company as an indispensable partner to health care deliverers. The table below shows net sales by disease state management for the quarter and year-to-date-periods ended September 30, 2002 and 2001.