UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 26, 2010

OR

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

For the transition period from                      to                     .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)		23-1147939 (I.R.S. employer identification no.)
155 South Limerick Road, Limerick, Pennsylvania (Address of principal executive offices)		19468 (Zip Code)

(610) 948-5100
(Registrant’s telephone number, including area code)

(None)
(Former Name, Former Address and Former Fiscal Year,
If Changed Since Last Report)

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 þ No o

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 during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No o

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

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

The registrant had 39,983,663 shares of common stock, $1.00 par value, outstanding as of October 15, 2010.

 

 

TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 26, 2010

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1: Financial Statements (Unaudited):
Condensed Consolidated Statements of Income for the three and nine months ended September 26, 2010 and September 27, 2009			2
Condensed Consolidated Balance Sheets as of September 26, 2010 and December 31, 2009			3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 26, 2010 and September 27, 2009			4
Condensed Consolidated Statements of Changes in Equity for the nine months ended September 26, 2010 and September 27, 2009			5
Notes to Condensed Consolidated Financial Statements			6
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations			24
Item 3: Quantitative and Qualitative Disclosures About Market Risk			33
Item 4: Controls and Procedures			33
PART II — OTHER INFORMATION
Item 1: Legal Proceedings			34
Item 1A: Risk Factors			34
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds			34
Item 3: Defaults Upon Senior Securities			34
Item 5: Other Information			34
Item 6: Exhibits			35
SIGNATURES			36
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2
Exhibit 99.1
EX-101 INSTANCE DOCUMENT
EX-101 SCHEMA DOCUMENT
EX-101 CALCULATION LINKBASE DOCUMENT
EX-101 LABELS LINKBASE DOCUMENT
EX-101 PRESENTATION LINKBASE DOCUMENT
EX-101 DEFINITION LINKBASE DOCUMENT

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED AND SUBSIDIARIES

		Three Months Ended								Nine Months Ended
		September 26,				September 27,				September 26,				September 27,
		2010				2009				2010				2009
		(Dollars and shares in thousands, except per share)
Net revenues		$	442,993			$	440,741			$	1,325,867			$	1,295,021
Cost of goods sold			239,926				244,408				719,650				716,080
Gross profit			203,067				196,333				606,217				578,941
Selling, general and administrative expenses			123,441				113,633				357,748				344,271
Research and development expenses			11,013				9,618				30,927				27,725
Net (gain) loss on sales of businesses and assets			(183	)			—				(183	)			2,597
Goodwill impairment			—				—				—				6,728
Restructuring and other impairment charges			1,141				4,783				1,679				13,412
Income from continuing operations before interest, loss on extinguishments of debt and taxes			67,655				68,299				216,046				184,208
Interest expense			20,090				21,074				58,709				68,470
Interest income			(243	)			(233	)			(637	)			(1,901	)
Loss on extinguishments of debt			30,354				—				30,354				—
Income from continuing operations before taxes			17,454				47,458				127,620				117,639
(Benefit) taxes on income from continuing operations			(5,986	)			13,236				26,580				26,876
Income from continuing operations			23,440				34,222				101,040				90,763
Operating (loss) income from discontinued operations (including gain (loss) on disposal of $38,562 for the nine month period in 2010 and ($3,480) and $272,307 for the three and nine month periods in 2009, respectively)			—				(2,886	)			41,301				275,500
Taxes (benefit) on income from discontinued operations			905				(7,281	)			21,322				95,267
(Loss) income from discontinued operations			(905	)			4,395				19,979				180,233
Net income			22,535				38,617				121,019				270,996
Less: Net income attributable to noncontrolling interest			339				305				1,003				843
Income from discontinued operations attributable to noncontrolling interest			—				—				—				9,860
Net income attributable to common shareholders		$	22,196			$	38,312			$	120,016			$	260,293
Earnings per share available to common shareholders:
Basic:
Income from continuing operations		$	0.58			$	0.85			$	2.51			$	2.26
(Loss) income from discontinued operations		$	(0.02	)		$	0.11			$	0.50			$	4.29
Net income		$	0.56			$	0.96			$	3.01			$	6.55
Diluted:
Income from continuing operations		$	0.57			$	0.85			$	2.48			$	2.25
(Loss) income from discontinued operations		$	(0.02	)		$	0.11			$	0.50			$	4.27
Net income		$	0.55			$	0.96			$	2.98			$	6.52
Dividends per share		$	0.34			$	0.34			$	1.02			$	1.02
Weighted average common shares outstanding:
Basic			39,933				39,724				39,879				39,711
Diluted			40,254				39,932				40,269				39,910
Amounts attributable to common shareholders:
Income from continuing operations, net of tax		$	23,101			$	33,917			$	100,037			$	89,920
(Loss) income from discontinued operations, net of tax			(905	)			4,395				19,979				170,373
Net income		$	22,196			$	38,312			$	120,016			$	260,293

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

TELEFLEX INCORPORATED AND SUBSIDIARIES

		September 26,				December 31,
		2010				2009
		(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents		$	247,757			$	188,305
Accounts receivable, net			294,285				265,305
Inventories, net			359,967				360,843
Prepaid expenses and other current assets			21,170				21,872
Income taxes receivable			49,541				100,733
Deferred tax assets			58,733				58,010
Assets held for sale			11,259				8,866
Total current assets			1,042,712				1,003,934
Property, plant and equipment, net			292,294				317,499
Goodwill			1,438,997				1,459,441
Intangible assets, net			928,906				971,576
Investments in affiliates			13,288				12,089
Deferred tax assets			—				336
Other assets			81,658				74,130
Total assets		$	3,797,855			$	3,839,005
LIABILITIES AND EQUITY
Current liabilities
Current borrowings		$	181,193			$	4,008
Accounts payable			91,588				94,983
Accrued expenses			84,157				97,274
Payroll and benefit-related liabilities			71,693				70,537
Derivative liabilities			15,355				16,709
Accrued interest			12,592				22,901
Income taxes payable			1,901				30,695
Deferred tax liabilities			6,648				—
Total current liabilities			465,127				337,107
Long-term borrowings			904,406				1,192,491
Deferred tax liabilities			416,939				398,923
Pension and postretirement benefit liabilities			134,431				164,726
Noncurrent liability for uncertain tax positions			110,935				109,912
Other liabilities			48,740				50,772
Total liabilities			2,080,578				2,253,931
Commitments and contingencies
Total common shareholders’ equity			1,713,231				1,580,241
Noncontrolling interest			4,046				4,833
Total equity			1,717,277				1,585,074
Total liabilities and equity		$	3,797,855			$	3,839,005

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

TELEFLEX INCORPORATED AND SUBSIDIARIES

		Nine Months Ended
		September 26,				September 27,
		2010				2009
		(Dollars in thousands)
Cash Flows from Operating Activities of Continuing Operations:
Net income		$	121,019			$	270,996
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations			(19,979	)			(180,233	)
Depreciation expense			36,856				41,058
Amortization expense of intangible assets			33,101				32,512
Amortization expense of deferred financing costs			4,425				4,556
Loss on extinguishments of debt			30,354				—
Gain on call options and warrants			(407	)			—
Debt modification costs			2,795				—
Impairment of long-lived assets			—				5,788
Impairment of goodwill			—				6,728
Stock-based compensation			7,769				6,611
Net (gain) loss on sales of businesses and assets			(183	)			2,597
Deferred income taxes, net			28,670				36,888
Other			(28,809	)			160
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable			(45,343	)			5,467
Inventories			(15,375	)			1,882
Prepaid expenses and other current assets			526				2,087
Accounts payable and accrued expenses			(12,147	)			(37,562	)
Income taxes receivable and payable, net			3,504				(128,817	)
Net cash provided by operating activities from continuing operations			146,776				70,718
Cash Flows from Investing Activities of Continuing Operations:
Expenditures for property, plant and equipment			(23,796	)			(20,257	)
Proceeds from sales of businesses and assets, net of cash sold			75,943				314,513
Payments for businesses and intangibles acquired, net of cash acquired			(82	)			(643	)
Net cash provided by investing activities from continuing operations			52,065				293,613
Cash Flows from Financing Activities of Continuing Operations:
Proceeds from long-term borrowings			400,000				10,018
Reduction in long-term borrowings			(460,770	)			(300,268	)
Increase (decrease) in notes payable and current borrowings			34,402				(836	)
Proceeds from stock compensation plans			8,470				750
Payments to noncontrolling interest shareholders			(1,463	)			(702	)
Dividends			(40,704	)			(40,521	)
Debt and equity issuance and amendment fees			(48,041	)			—
Purchase of call options			(88,000	)			—
Proceeds from sale of warrants			59,400				—
Net cash used in financing activities from continuing operations			(136,706	)			(331,559	)
Cash Flows from Discontinued Operations:
Net cash (used in) provided by operating activities			(680	)			24,861
Net cash used in investing activities			(189	)			(3,488	)
Net cash used in financing activities			—				(11,075	)
Net cash (used in) provided by discontinued operations			(869	)			10,298
Effect of exchange rate changes on cash and cash equivalents			(1,814	)			8,444
Net increase in cash and cash equivalents			59,452				51,514
Cash and cash equivalents at the beginning of the period			188,305				107,275
Cash and cash equivalents at the end of the period		$	247,757			$	158,789

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

TELEFLEX INCORPORATED AND SUBSIDIARIES

																		Accumulated
										Additional								Other				Treasury
		Common Stock								Paid in				Retained				Comprehensive				Stock								Noncontrolling				Total				Comprehensive
		Shares				Dollars				Capital				Earnings				Income				Shares				Dollars				Interest				Equity				Income
		(Dollars and shares in thousands, except per share)
Balance at December 31, 2008			41,995			$	41,995			$	268,263			$	1,182,906			$	(108,202	)			2,311			$	(138,507	)		$	39,428			$	1,285,883
Net income															260,293																10,703				270,996			$	270,996
Cash dividends ($1.02 per share)															(40,521	)																			(40,521	)
Financial instruments marked to market, net of tax of $6,005																			13,858																13,858				13,858
Cumulative translation adjustment																			60,658												61				60,719				60,719
Pension liability adjustment, net of tax of $1,378																			764																764				764
Distributions to noncontrolling interest shareholders																															(702	)			(702	)
Disposition of noncontrolling interest																															(45,019	)			(45,019	)
Comprehensive income																																						$	346,337
Shares issued under compensation plans			20				20				6,261												(14	)			961								7,242
Deferred compensation																							(9	)			343								343
Balance at September 27, 2009			42,015			$	42,015			$	274,524			$	1,402,678			$	(32,922	)			2,288			$	(137,203	)		$	4,471			$	1,553,563
Balance at December 31, 2009			42,033			$	42,033			$	277,050			$	1,431,878			$	(34,120	)			2,278			$	(136,600	)		$	4,833			$	1,585,074
Net income															120,016																1,003				121,019			$	121,019
Cash dividends ($1.02 per share)															(40,704	)																			(40,704	)
Financial instruments marked to market, net of tax of $(44)																			(10	)															(10	)			(10	)
Cumulative translation adjustment																			(17,650	)											38				(17,612	)			(17,612	)
Pension liability adjustment, net of tax of $1,273																			2,516																2,516				2,516
Convertible debt discount, net of tax of $30,344											50,870																								50,870
Call options, net of tax of $(31,891)											(58,853	)																							(58,853	)
Warrants											60,877																								60,877
Distributions to noncontrolling interest shareholders																															(1,463	)			(1,463	)
Deconsolidation of VIE															253																(365	)			(112	)
Comprehensive income																																						$	105,913
Shares issued under compensation plans			170				170				14,525												(13	)			740								15,435
Deferred compensation																							(6	)			240								240
Balance at September 26, 2010			42,203			$	42,203			$	344,469			$	1,511,443			$	(49,264	)			2,259			$	(135,620	)		$	4,046			$	1,717,277

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

TELEFLEX INCORPORATED AND SUBSIDIARIES

Note 1 — Basis of presentation

We prepared the accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated on the same basis as our annual consolidated financial statements, with the exception of changes resulting from the adoption of new accounting guidance during the first nine months of 2010 as described in Note 2 below. Captions for certain financial statement line items have changed to correspond with the extensible business reporting language, or XBRL, taxonomy used in the interactive data file filed concurrently with this report; however, composition of these line items has not changed.

In the opinion of management, our financial statements reflect all adjustments, which are of a normal recurring nature, necessary for a fair presentation of financial statements for interim periods in accordance with U.S. generally accepted accounting principles (GAAP) and with Rule 10-01 of SEC Regulation S-X, which sets forth the instructions for financial statements included in Form 10-Q. The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of our financial statements, as well as the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

In accordance with applicable accounting standards, the accompanying condensed consolidated financial statements do not include all of the information and footnote disclosures that are required to be included in our annual consolidated financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but, as permitted by Rule 10-01 of SEC Regulation S-X, does not include all disclosures required by GAAP for complete financial statements. Accordingly, our quarterly condensed financial statements should be read in conjunction with the consolidated financial statements included in our Current Report on Form 8-K for the year ended December 31, 2009 filed with the Securities and Exchange Commission on July 27, 2010.

As used in this report, the terms “we,” “us,” “our,” “Teleflex” and the “Company” mean Teleflex Incorporated and its subsidiaries, unless the context indicates otherwise. The results of operations for the periods reported are not necessarily indicative of those that may be expected for a full year.

Note 2 — New accounting standards

The Company adopted the following amendments to accounting standards as of January 1, 2010, the first day of its 2010 fiscal year:

Accounting for Transfers of Financial Assets — an amendment to Transfers and Servicing: In June 2009, the Financial Accounting Standards Board (“FASB”) issued guidance to improve the information that is reported in financial statements about the transfer of financial assets and the effects of transfers of financial assets on financial position, financial performance and cash flows and a transferor’s continuing involvement, if any, with transferred financial assets. In addition, the guidance limits the circumstances in which a financial asset or a portion of a financial asset should be derecognized in the financial statements of the transferor when the transferor has not transferred the entire original financial asset. Upon the adoption of this guidance on January 1, 2010, the trade receivables under the Company’s accounts receivable securitization program (the “Securitization Program”) that were previously treated as sold and removed from the balance sheet are now included in accounts receivable, net, and the amounts outstanding under the Securitization Program are accounted for as a secured borrowing and reflected as short-term debt on the Company’s balance sheet. As of September 26, 2010, the amount of secured borrowing under the Securitization Program was $34.7 million. In addition, while there has been no change in the arrangement under the Securitization Program, the adoption of this amendment impacts the cash flow statement as a reduction in cash flow from operations for the nine months ended September 26, 2010 by approximately $39.7 million and an increase in cash flow from financing activities of $34.7 million.

Amendment to Consolidation: In June 2009, the FASB issued guidance that requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity (which would result in the enterprise being deemed the primary beneficiary of that entity and, therefore, obligated to consolidate the variable interest entity in its financial statements); to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to revise guidance for determining whether an entity is a variable interest entity; and to require enhanced disclosures that will provide more transparent information about an enterprise’s involvement with a variable interest entity. As a result of the adoption of this guidance, the Company deconsolidated a variable interest entity, which had revenue of approximately $10 million during 2009, because the Company did not have a controlling financial interest. Refer to the Company’s condensed consolidated statements of changes in equity for the impact of the deconsolidation.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Amendment to Fair Value Measurements and Disclosures: In January 2010, the FASB issued an update that amends disclosures about recurring or nonrecurring fair value measurements. The amendment requires new disclosures about transfers in and out of Level 1 and Level 2 and to provide a reconciliation of the activity in Level 3 fair value measurements presenting purchases, sales, issuances and settlements on a gross basis. In addition the amendment clarifies existing disclosures with respect to the level of disaggregation that an entity should provide for fair value measurement and it clarifies the disclosures surrounding the valuation techniques and the inputs used to measure fair value. The guidance is effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures related to Level 3 fair value measurement activity which is effective for fiscal years beginning after December 15, 2010. The amendment did not have an impact on our current disclosures of fair value. We will provide the additional disclosures related to Level 3 pension plan assets, if any, upon the effective date for Level 3.

The Company will adopt the following new accounting standards as of January 1, 2011, the first day of its 2011 fiscal year:

Amendment to Software: In October 2009, the FASB changed the accounting model for revenue arrangements for certain tangible products containing software components and nonsoftware components. The guidance provides direction on how to determine which software, if any, relating to the tangible product is excluded from the scope of the software revenue guidance. The amendment will be effective prospectively for fiscal years beginning on or after June 15, 2010. The Company is currently evaluating this guidance to determine the impact on the Company’s results of operations, cash flows, and financial position.

Amendment to Revenue Recognition: In October 2009, the FASB revised the criteria for multiple-deliverable revenue arrangements by establishing new guidance on how to separate deliverables and how to measure and allocate arrangement consideration to one or more units of accounting. Additionally, the guidance requires vendors to expand their disclosures regarding multiple-deliverable revenue arrangements and will be effective prospectively for revenue arrangements entered into or materially modified in fiscal years beginning on or after June 15, 2010. The Company is currently evaluating the guidance to determine the impact on the Company’s results of operations, cash flows, and financial position.

Note 3 — Integration

Integration of Arrow

In connection with the acquisition of Arrow International, Inc. (“Arrow”) in October 2007, the Company formulated a plan related to the integration of Arrow and the Company’s Medical businesses. The integration plan focuses on the closure of Arrow corporate functions and the consolidation of manufacturing, sales, marketing and distribution functions in North America, Europe and Asia. The Company finalized its estimate of the costs to implement the plan in the fourth quarter of 2008. The Company has accrued estimates for certain costs, related primarily to personnel reductions and facility closures and the termination of certain distribution agreements, at the date of acquisition.

The following table provides information relating to changes in the accrued liability associated with the Arrow integration plan during the nine months ended September 26, 2010:

		Balance at																Balance at
		December 31,				Adjustments to												September 26,
		2009				Reserve				Payments				Translation				2010
		(Dollars in millions)
Termination benefits		$	0.4			$	(0.2	)		$	—			$	(0.1	)		$	0.1
Facility closure costs			0.5				—				(0.2	)			—				0.3
Contract termination costs			2.7				—				—				—				2.7
		$	3.6			$	(0.2	)		$	(0.2	)		$	(0.1	)		$	3.1

Contract termination costs relate to the termination of a European distributor agreement that is currently in litigation but is expected to be paid in 2011.

In conjunction with the plan for the integration of Arrow and the Company’s Medical businesses, the Company has taken actions that affect employees and facilities of Teleflex. This aspect of the integration plan is explained in Note 4, “Restructuring and other impairment charges.” Costs that affect employees and facilities of Teleflex are charged to earnings and included in restructuring and other impairment charges within the condensed consolidated statement of operations for the periods in which the costs are incurred.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 4 — Restructuring and other impairment charges

The following table provides information relating to the amounts included in restructuring and other impairment charges in the condensed consolidated statements of income for the periods presented:

		Three Months Ended								Nine Months Ended
		September 26,				September 27,				September 26,				September 27,
		2010				2009				2010				2009
		(Dollars in thousands)
2008 Commercial Segment Program		$	—			$	185			$	—			$	2,240
2007 Arrow Integration Program			1,141				1,284				1,679				5,384
Impairment charges — intangibles and fixed assets			—				3,314				—				5,788
Restructuring and other impairment charges		$	1,141			$	4,783			$	1,679			$	13,412

2008 Commercial Segment Restructuring Program

In December 2008, the Company began certain restructuring initiatives with respect to the Company’s Commercial Segment. The initiatives involved the consolidation of operations and a related reduction in workforce at certain of the Company’s facilities in North America and Europe. The Company determined to undertake these initiatives as a means to improve operating performance and to better leverage its resources due to weakness in the marine and industrial markets.

By December 31, 2009, the Company had completed the 2008 Commercial Segment restructuring program, and all costs associated with the program were fully paid during 2009. No charges have been recorded under this program in 2010.

The following table provides information related to the charges associated with the 2008 Commercial Segment restructuring program that were included in restructuring and other impairment charges in the condensed consolidated statements of income for the periods presented:

		Three Months Ended				Nine Months Ended
		September 27, 2009				September 27, 2009
		(Dollars in thousands)
Termination benefits		$	100			$	2,027
Facility closure costs			85				213
		$	185			$	2,240

Termination benefits were comprised of severance-related payments for all employees terminated in connection with the 2008 Commercial Segment restructuring program.

2007 Arrow Integration Program

The following table provides information relating to the charges associated with the 2007 Arrow integration program that were included in restructuring and other impairment charges in the condensed consolidated statements of income for the periods presented:

		Three Months Ended								Nine Months Ended
		September 26,				September 27,				September 26,				September 27,
		2010				2009				2010				2009
		(Dollars in thousands)
Termination benefits		$	613			$	679			$	933			$	3,243
Facility closure costs			188				193				774				409
Contract termination costs			340				157				427				1,048
Other restructuring costs			—				255				3				684
Gain on sale of assets			—				—				(458	)			—
		$	1,141			$	1,284			$	1,679			$	5,384

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table provides information relating to changes in the accrued liability associated with the 2007 Arrow integration program during the nine months ended September 26, 2010:

		Balance at																Balance at
		December 31,				Subsequent												September 26,
		2009				Accruals				Payments				Translation				2010
		(Dollars in thousands)
Termination benefits		$	2,183			$	933			$	(2,198	)		$	(67	)		$	851
Facility closure costs			302				774				(1,058	)			(18	)			—
Contract termination costs			687				427				(9	)			(20	)			1,085
Other restructuring costs			23				3				(3	)			(1	)			22
		$	3,195			$	2,137			$	(3,268	)		$	(106	)		$	1,958

Termination benefits are comprised of severance-related payments for all employees terminated in connection with the 2007 Arrow integration program. Facility closure costs relate primarily to costs to prepare a facility for closure. Contract termination costs relate primarily to the termination of a European distributor agreement and leases in conjunction with the consolidation of facilities. The gain on sale of assets included in restructuring and other impairment charges reflects the sale of one of the properties with a zero net book value associated with the 2007 Arrow integration program in its Medical Segment.

As of September 26, 2010, the Company expects to incur the following restructuring expenses associated with the 2007 Arrow integration program in its Medical Segment for the last three months of 2010:

		(Dollars in millions)
Termination benefits		$	0.3-0.5
Facility closure costs			0.1-0.2
Contract termination costs			0.1-0.2
		$	0.5-0.9

Impairment Charges

During the second quarter of 2009, the Company recorded a $2.3 million impairment charge with respect to an intangible asset in the Marine reporting unit. See Note 5, “Impairment of goodwill and intangible assets.” During the third quarter of 2009, based on continued deterioration in the California real estate market, the Company recorded $3.3 million in impairment charges to fully write-off an investment in a real estate venture in California. The Company initially invested in the venture in 2004 by contributing property and other assets that had been part of one of its former manufacturing sites.

Note 5 — Impairment of goodwill and intangible assets

The Company performed an interim review of goodwill and intangible assets in the Marine and Cargo Container reporting units during the second quarter of 2009 and determined that $6.7 million of goodwill in the Cargo Container operations and $2.3 million of indefinite lived tradenames in the Marine reporting unit were impaired. The Company performed this interim review as a result of the difficult market conditions in which these reporting units were operating and the significant deterioration in the operating performance of these reporting units, which accelerated in the second quarter of 2009.

In performing the goodwill impairment test, the Company estimated the fair values of these two reporting units by a combination of (i) estimation of the discounted cash flows of each of the reporting units based on projected earnings in the future (the income approach) and (ii) analysis of sales of similar assets in actual transactions (the market approach). Using this methodology, the Company determined that the entire $6.7 million of goodwill in the Cargo Container reporting unit was impaired, but that goodwill in the Marine reporting unit was not impaired. In performing the impairment test for the indefinite lived intangibles, the Company estimated the direct cash flows associated with the applicable intangible assets using a “relief from royalty” methodology associated with revenues projected to be generated from these intangibles. Under this methodology, the owner of an intangible asset must determine the arms length royalty that likely would have been charged if the owner had to license that asset from a third party. This analysis indicated that certain tradenames in the Marine reporting unit were impaired by $2.3 million.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 6 — Inventories

Inventories consisted of the following:

		September 26,				December 31,
		2010				2009
		(Dollars in thousands)
Raw materials		$	139,725			$	150,508
Work-in-process			64,545				53,847
Finished goods			192,164				191,747
			396,434				396,102
Less: Inventory reserve			(36,467	)			(35,259	)
Inventories		$	359,967			$	360,843

Note 7—Goodwill and other intangible assets

The following table provides information relating to changes in the carrying amount of goodwill, by operating segment, for the nine months ended September 26, 2010:

		Medical				Commercial				Total
		(Dollars in thousands)
Balance as of December 31, 2009		$	1,444,354			$	15,087			$	1,459,441
Goodwill related to dispositions			(9,224	)			(7,597	)			(16,821	)
Adjustment to acquisition balance sheet			(180	)			—				(180	)
Translation adjustment			(3,443	)			—				(3,443	)
Balance as of September 26, 2010		$	1,431,507			$	7,490			$	1,438,997

As of September 26, 2010, there has been no goodwill impairment losses recorded against these carrying values for goodwill.

Intangible assets consisted of the following:

		Gross Carrying Amount								Accumulated Amortization
		September 26,				December 31,				September 26,				December 31,
		2010				2009				2010				2009
		(Dollars in thousands)
Customer lists		$	553,788			$	559,207			$	91,813			$	74,047
Intellectual property			207,355				208,247				72,781				59,824
Distribution rights			21,562				22,094				17,749				17,066
Trade names			331,722				336,673				3,178				3,708
		$	1,114,427			$	1,126,221			$	185,521			$	154,645

Amortization expense related to intangible assets was approximately $10.8 million and $11.0 million for the three months ended and $33.1 million and $32.5 million for the nine months ended September 26, 2010 and September 27, 2009, respectively. Estimated annual amortization expense for each of the five succeeding years is as follows (dollars in thousands):

2010		$	44,100
2011			43,900
2012			43,600
2013			42,700
2014			39,800

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Note 8 — Borrowings

The components of long-term debt are as follows:

		September 26,				December 31,
		2010				2009
		(Dollars in thousands)
Senior Credit Facility:
Term loan facility, at an average rate of 1.55%, due 10/1/2012		$	36,123			$	664,170
Term loan facility, at an average rate of 2.80%, due 10/1/2014			363,877				—
2007 Notes:
7.62% Series A Senior Notes, due 10/1/2012			—				130,000
7.94% Series B Senior Notes, due 10/1/2014			—				40,000
Floating Rate Series C Senior Notes, due 10/1/2012			—				26,600
2004 Notes:
6.66% Series 2004-1 Tranche A Senior Notes due 7/8/2011			145,000				145,000
7.14% Series 2004-1 Tranche B Senior Notes due 7/8/2014			96,500				96,500
7.46% Series 2004-1 Tranche C Senior Notes due 7/8/2016			90,100				90,100
3.875% Convertible Senior Subordinated Notes due 2017			400,000				—
Other debt and mortgage notes, at interest rates ranging from 5% to 7%			—				132
			1,131,600				1,192,502
Less: Unamortized debt discount on 3.875% Convertible Senior Subordinated Notes due 2017			(82,194	)			—
			1,049,406				1,192,502
Less: Current portion of borrowings			(145,000	)			(11	)
Total long-term debt		$	904,406			$	1,192,491

Refinancing Transactions

In August 2010, the Company entered into a series of refinancing transactions comprised of (i) a public offering of $400.0 million aggregate principal amount of 3.875% Convertible Senior Subordinated Notes due 2017 (the “Convertible Notes”); (ii) the amendment of certain terms of its Senior Credit Facilities; (iii) the extension of the maturity of a portion of its borrowings under the Senior Credit Facilities; (iv) the repayment of $200 million of borrowings under the Senior Credit Facilities; (v) the amendment of certain terms of its Senior Notes issued in 2007 (the “2007 Notes”) and 2004 (the “2004 Notes” and together with the 2007 Notes, the “Senior Notes”) and (vi) the prepayment of all of its outstanding 2007 Notes, which had an outstanding aggregate principal amount of $196.6 million and were scheduled to mature in 2012 and 2014. In addition, in connection with the issuance of the Convertible Notes, the Company received proceeds of approximately $59.4 million from the issuance of warrants on its common stock and purchased call options on its common stock for approximately $88.0 million.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table shows the impact of the various elements of the refinancing transactions:

														Additional				Debt				Operating
						Other				Long-Term				Paid-In				Extinguishment				(Income)/
		Cash				Assets				Debt				Capital				Costs				Expenses
		(Dollars in millions)
Proceeds received from:
Issuance of Convertible Notes		$	400.0			$	—			$	400.0			$	—			$	—			$	—
Sale of warrants			59.4				—				—				59.4				—				—
Use of proceeds:
Repay term loan			(200.0	)			—				(200.0	)			—				—				—
Retire 2007 Notes			(196.6	)			—				(196.6	)			—				—				—
Make-whole payment — 2007 Notes			(28.1	)			—				—				—				28.1				—
Purchase of call options			(88.0	)			—				—				(88.0	)			—				—
Underwriters’ discounts and commissions:
Convertible Notes			(11.0	)			8.1				—				(2.9	)			—				—
Senior Credit Facility			(5.0	)			2.5				—				—				—				2.5
Other transaction fees: (1)
Convertible Notes			(1.9	)			1.4				—				(0.5	)			—				—
Senior Credit Facility			(3.5	)			3.2				—				—				—				0.3
Net cash		$	(74.7	)			15.2				3.4				(32.0	)			28.1				2.8
Non-cash adjustments:
Equity component of Convertible Notes							—				(83.7	)			83.7				—				—
Write-off unamortized debt issuance costs:
Senior Credit Facility							(1.6	)			—				—				1.6				—
2007 Notes							(0.6	)			—				—				0.6				—
Mark-to-market gain on call options							—				—				(2.2	)			—				(2.2	)
Mark-to-market loss on warrants							—				—				1.8				—				1.8
						$	13.0			$	(80.3	)		$	51.3			$	30.3			$	2.4

(1) Includes accrued expenses of $1.5 million for estimated transaction fees.

Convertible Notes

On August 9, 2010, the Company issued $400.0 million of 3.875% Convertible Senior Subordinated Notes due 2017. The Convertible Notes are governed by the Indenture, dated as of August 2, 2010, between the Company and Wells Fargo Bank, N.A., as trustee, as supplemented by the First Supplemental Indenture, dated as of August 9, 2010. The Convertible Notes pay interest semi-annually in arrears on February 1 and August 1 of each year, commencing on February 1, 2011, at a rate of 3.875% per year, and mature on August 1, 2017. The Convertible Notes are the Company’s unsecured senior subordinated obligations and are (i) not guaranteed by any of the Company’s subsidiaries; (ii) subordinated in right of payment to all of the Company’s existing and future senior indebtedness (iii) junior to the Company’s existing and future secured indebtedness to the extent of the value of the assets securing such indebtedness.

The Convertible Notes will be convertible at the option of the holder only under the following circumstances (i) during any fiscal quarter, if the last reported sales price of the Company’s common stock for at least 20 trading days during a period of 30 consecutive trading days ending on the last trading day of the immediately preceding fiscal quarter exceeds 130% of the conversion price on each applicable trading day; or (ii) during the five business day period after any five consecutive trading day period in which the trading price per $1,000 principal amount of Convertible Notes is less than 98% of the product of the last reported sale price of the common stock and the applicable conversion rate on each trading day during the measurement period; or (iii) upon the occurrence of specified corporate events; or (iv) at any time on or after May 1, 2017 up to and including July 28, 2017. The Convertible Notes are convertible at a conversion rate of 16.3084 shares of common stock per $1,000 principal amount of Convertible Notes, which is equivalent to a conversion price of approximately $61.32. The conversion rate is subject to adjustment upon certain events. Upon conversion, the Company’s conversion obligation may be satisfied, at the Company’s option, in shares of common stock, cash or a combination of cash and shares of common stock. The Company has initially elected a net-settlement method to satisfy its conversion obligation. The net-settlement method allows the Company to settle the $1,000 principal amount of the Convertible Notes in cash and to settle the excess conversion value in shares, plus cash in lieu of fractional shares.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

In connection with the issuance of the Convertible Notes and convertible note hedge and warrants, the Company entered into convertible note hedge transactions pursuant to which it purchased call options for $88.0 million ($56.1 million net of tax) in private transactions. The call options allow the Company to receive shares of the Company’s common stock and/or cash from counterparties equal to the amounts of common stock and/or cash related to the excess conversion value that it would pay to the holders of the Convertible Notes upon conversion. These call options will terminate upon the earlier of July 28, 2017 or the first day all of the related Convertible Notes are no longer outstanding due to conversion or otherwise.

The Company also entered into privately negotiated warrant transactions generally relating to the same number of shares of common stock with each of the option counterparties. Under certain circumstances, the Company may be required under the terms of the warrant transactions to issue up to 19.99% of the shares of common stock outstanding on August 3, 2010, which equals 7,981,422 shares of common stock (subject to adjustments). The warrants have been divided into components that expire ratably over a 180 day period commencing November 1, 2017. The strike price of the warrants is approximately $74.65 per share of common stock, subject to customary anti-dilution adjustments. Proceeds received from the issuance of the warrants totaled approximately $59.4 million.

The convertible note hedge and warrant transactions described above are intended to reduce the potential dilution with respect to the Company’s common stock and/or reduce the Company’s exposure to potential cash payments that the Company may be required to make upon conversion of the Convertible Notes. However, the warrant transactions could have a dilutive effect with respect to the common stock or, if the Company so elects, obligate the Company to make cash payments to the extent that the market price per share of common stock exceeds $74.65 per share on any expiration date of the warrants.

The initial offering of the Convertible Notes was for $350.0 million, with an overallotment option that allowed the underwriters to purchase an additional principal amount of $50.0 million. The underwriters exercised their option on August 4, 2010 resulting in a total offering of $400.0 million of the Convertible Notes. The Company entered into the contracts for both the call options and warrants in connection with the Convertible Notes on August 3, 2010. Existing accounting guidance provides that the call option and warrant contracts be treated as derivative instruments for the one day that the overallotment option was outstanding. Once the overallotment provision was exercised, the option and warrant contracts were re-classified to equity since the settlement terms of the Company’s call options and warrant contracts allow the Company to elect net cash settlement or net-share settlement under both contracts. The equity components of the option and warrants will not be adjusted for subsequent changes in fair value. As a result of treating these instruments as derivatives prior to exercise of the overallotment option, the Company recorded a non-cash gain on the call options of $2.2 million and a non-cash loss on the warrants of $1.8 million, resulting in a net gain of $0.4 million in operating income.

The Company allocated the proceeds of the Convertible Notes between the liability and equity components of the debt. The initial $316.3 million liability component was determined based on the fair value of a similar debt instrument excluding the conversion feature. The initial $83.7 million ($53.4 million net of tax) equity component represented the difference between the fair value or carrying value of $316.3 million of the debt and the $400.0 million of proceeds. The related debt discount of $83.7 million will be amortized under the interest method over the remaining life of the Convertible Notes, which, at September 26, 2010, is approximately seven years. An effective interest rate of 7.814% was used to calculate the debt discount on the Convertible Notes. The following table provides interest expense amounts related to the Convertible Notes for the periods presented:

		For the Three and
		Nine Months Ending
(in millions)		September 26, 2010
Interest cost related to contractual interest coupon		$	2.1
Interest cost related to amortization of the discount		$	1.5

The following table provides the carrying value of the Convertible Notes as of September 26, 2010:

(in millions)		September 26, 2010
Principal amount of the Convertible Notes		$	400.0
Unamortized discount			(82.2	)
Net carrying amount		$	317.8

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Senior Credit Facility

On August 9, 2010, the Company repaid $200.0 million of its term loan borrowings under its senior credit facility and amended certain terms of its existing senior credit agreement. In connection with the amendment, the Company extended the final maturity date of $363.9 million of its remaining $400.0 million term loan borrowings and $366.3 million of commitments under its $400.0 million revolving credit facility from October 1, 2012 to October 1, 2014. The extended term loans are to be repaid in accordance with an amortization schedule, with quarterly payments of 2.5% of the original principal amount of the extended term loans commencing on December 31, 2012. In addition, the amendment increased the applicable interest rate margin for the extended loans and commitments. As amended, the range of the applicable margin for borrowings bearing interest at the “base rate” (generally, either the federal funds effective rate plus 0.5% or the prime rate) increased to a range of 0.50% to 1.75%, and the range of the applicable margin for extended borrowings bearing interest at the “LIBOR rate” (generally, the LIBOR rate for the period corresponding to the applicable interest period of the borrowings plus 1.0%) increased to a range of 1.50% to 2.75%. In addition, the commitment fee rate on unused but committed portions of the revolving credit facility increased to a range of 0.375% to 0.50%. The actual amount of the applicable margin and commitment fee rate will be based on the ratio of Consolidated Total Indebtedness to Consolidated EBITDA (each as defined in the senior credit agreement).

The senior credit agreement was further amended to (i) permit an additional $200.0 million of indebtedness for unsecured, senior subordinated or subordinated notes; (ii) add a mandatory prepayment of term loans upon the occurrence of certain prepayments in cash of certain Convertible Notes, either in satisfaction of the rights of the holders of such Convertible Notes to convert or the rights of the holders of such Convertible Notes to require repurchase of the Convertible Notes upon a fundamental change (as defined in the indenture governing such Convertible Notes), in an amount equal to the amount used to prepay the applicable Convertible Notes to be ratably applied to the term loans under the credit agreement and the Senior Notes; (iii) amend the definition of “Consolidated EBITDA” to permit add-backs for fees and expenses incurred in connection with the $200.0 million repayment of existing term loan borrowings under the credit agreement and the prepayment make-whole amounts in connection with any prepayment on the Senior Notes, with such amendment only to take effect upon the prepayment of all of the Senior Notes or the amendment of such Senior Notes to permit corresponding add-backs; (iv) provide that, upon the prepayment of all of the Senior Notes or the amendment of such Senior Notes to increase the permitted leverage ratio to a level above 3.5 to 1, the credit agreement will automatically be amended to provide for either (1) an increase of the leverage ratio covenant to 4.0 to 1 (in the case of prepayment of the Senior Notes) or (2) an increase corresponding to an increase in the leverage ratio covenant in the Senior Notes (up to a leverage ratio of 4.0 to 1); and (v) provide that upon the prepayment of all of the Senior Notes or the amendment of such Senior Notes to increase the pro forma leverage ratio restriction for permitted acquisitions to a level above 3.50 to 1, the credit agreement will automatically be amended to provide for either (1) an increase of the pro forma leverage ratio restriction for permitted acquisitions to 3.75 to 1 (in the case of prepayment of the Senior Notes) or (2) an increase corresponding to an increase in the pro forma leverage ratio restriction for permitted acquisitions in the Senior Notes (up to a pro forma leverage ratio of 3.75 to 1).

The Company has an interest rate swap covering a notional amount of $375 million designated as a hedge against the variability of the cash flows in the interest payments under the term loan due to changes in the LIBOR Benchmark Interest Rate. The Company has determined that the interest rate swap may continue to be designated as a cash flow hedge with respect to the amended and extended term loan. The amendment and extension of the term loan did not result in a substantial modification and the critical terms of the variable rate debt (notional amount, re-pricing dates and benchmark interest rate) were unchanged.

Senior Note Amendments

In connection with the refinancing transactions, the Senior Notes were amended to permit certain terms of the Convertible Notes and the convertible note hedge and warrant transactions. Specifically, the amendments to the Senior Notes amended restrictions on indebtedness, restricted payments and swap agreements and an event of default provision in connection with the Convertible Notes and any convertible notes the Company may issue in the future. In addition, the holders of the Senior Notes consented to the subordination provisions that would apply to offerings of certain Convertible Notes. The amendment also added a mandatory offer to prepay the Senior Notes upon the occurrence of certain prepayments in cash of certain Convertible Notes, either in satisfaction of the rights of the holders of such Convertible Notes to convert or in satisfaction of the rights of the holders of such Convertible Notes to require repurchase of the Convertible Notes upon a fundamental change (as defined in the indenture governing such Convertible Notes), in an amount equal to the amount used to prepay certain Convertible Notes to be ratably applied to the Senior Notes and the term loans under the Senior Credit Facility.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Prepayment of 2007 Notes

On August 13, 2010, the Company prepaid all of its outstanding 2007 Notes, consisting of $130.0 million aggregate principal amount of 7.62% Series A Senior Notes due 2012, $40.0 million aggregate principal amount of 7.94% Series B Senior Notes due 2014 and $26.6 million aggregate principal amount of Floating Rate Series C Senior Notes due 2012, at an aggregate prepayment purchase price equal to the aggregate principal amount of $196.6 million plus a $28.1 million prepayment make-whole amount and accrued and unpaid interest to, but not including, the prepayment date. The Company recorded the $28.1 million make-whole payment, unamortized debt issuance costs of $0.6 million incurred prior to the refinancing transactions and legal fees as loss on extinguishments of debt during the third quarter of 2010.

Debt and equity issuance and amendment fees

The Company incurred estimated transaction fees related to the amendment of the senior credit agreement of approximately $8.5 million for underwriters’ discounts and commissions and other transaction fees. Under existing accounting guidance, the Company treated the $200.0 million repayment of the term loan as a debt extinguishment and the remaining $400.0 million of the term loan as a debt modification. The changes to the revolver component of the Senior Credit Facility were also deemed to be a modification. The Company allocated the estimated transaction fees evenly between the term loan and the revolver. Approximately $2.8 million represented estimated third party transaction fees related to the modified term loan that were expensed in the third quarter of 2010 as selling, general and administrative expenses. The remaining $5.7 million in transaction fees was deferred and will be amortized over the amended term of the facility as additional interest expense. In addition, the Company expensed approximately $1.6 million of unamortized Senior Credit Facility debt issuance costs related to the $200.0 million repayment that were incurred prior to the refinancing transactions as loss on extinguishments of debt.

In connection with the issuance of the Convertible Notes, the Company incurred estimated transaction fees of approximately $12.9 million for underwriters’ discounts and commissions and other transaction fees. Under existing accounting guidance, the Company allocated approximately $3.4 million to the respective equity components and the remaining $9.5 million was recorded as a deferred asset to be amortized over the outstanding term of the Convertible Notes as additional interest expense.

The aggregate amounts of notes payable and long-term debt maturing are as follows:

		(Dollars in thousands)
2010		$	36.2
2011			145.0
2012			45.2
2013			36.4
2014 and thereafter			905.0

Note 9 — Financial instruments

The Company uses derivative instruments for risk management purposes. Forward rate contracts are used to manage foreign currency transaction exposure and interest rate swaps are used to reduce exposure to interest rate changes. These derivative instruments are designated as cash flow hedges and are recorded on the balance sheet at fair market value. The effective portion of the gains or losses on derivatives are reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 10, “Fair value measurement” for additional information.

TELEFLEX INCORPORATED AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The location and fair values of derivative instruments designated as hedging instruments in the condensed consolidated balance sheet are as follows:

		September 26, 2010				December 31, 2009
		Fair Value				Fair Value
		(Dollars in thousands)
Asset derivatives:
Foreign exchange contracts:
Other assets — current		$	1,599			$	1,356
Total asset derivatives		$	1,599			$	1,356
Liability derivatives:
Interest rate contracts:
Derivative liabilities — current		$	15,034			$	15,849
Other liabilities — noncurrent			13,499				12,258
Foreign exchange contracts:
Derivative liabilities — current			321				860
Total liability derivatives		$	28,854			$	28,967