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EX-31.1 - RULE 13A-14(A) / 15D-14(A) CERTIFICATION OF CHIEF EXECUTIVE OFFICER - BARD C R INC /NJ/dex311.htm
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 10-K/A

(Amendment No. 1)

 

 

(Mark one)

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

For the fiscal year ended December 31, 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 1-6926

 

 

C. R. BARD, INC.

(Exact name of registrant as specified in its charter)

 

 

 

New Jersey  

730 Central Avenue

Murray Hill, New Jersey 07974

  22-1454160

(State or other jurisdiction of

incorporation or organization)

 

(Address of principal

executive offices)

 

(I.R.S. Employer

Identification No.)

Registrant’s telephone number, including area code: (908) 277-8000

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

       

Name of each exchange on which registered

Common Stock - $.25 par value       New York Stock Exchange

 

 

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    Yes  x    No  ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.    Yes  ¨    No  x

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 Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 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  x    No  ¨

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

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. (Check one):

 

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 Act).    Yes  ¨    No  x

The aggregate market value of the voting stock held by nonaffiliates of the registrant was approximately $7,267,559,518 based on the closing price of stock traded on the New York Stock Exchange on June 30, 2009. As of January 29, 2010, there were 95,657,595 shares of Common Stock, $.25 par value per share, outstanding.

 

 

DOCUMENTS INCORPORATED BY REFERENCE

None.

 

 

 


Table of Contents

EXPLANATORY NOTE

C. R. Bard, Inc. (the “Company”, “we”, “our”, “us”) is filing this Amendment No. 1 on Form 10-K/A (the “Amendment”) to amend its Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “Original Filing”), which was originally filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2010. This Amendment amends and restates in its entirety Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, of the Original Filing solely to remove a reference to our debt ratings in connection with the requirements of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Except for the foregoing change, no other changes have been made to the Original Filing.

Except as expressly set forth herein, this Amendment does not reflect events occurring after the date of the Original Filing or modify or update any of the other disclosures contained therein in any other way other than as required to reflect the amendment discussed above. This Amendment continues to speak as of the date of the Original Filing and the Company has not updated the disclosure in this Amendment to speak to any later date.


Table of Contents

TABLE OF CONTENTS

 

   PART II   
Item 7    Management’s Discussion and Analysis of Financial Condition and Results of Operations      1   
   PART IV   
Item 15    Exhibits      13   
   Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer   
   Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer   
Signatures      14   


Table of Contents

PART II

 

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview

The company designs, manufacturers, packages, distributes and sells medical, surgical, diagnostic and patient care devices. The company sells a broad, diversified portfolio of products to hospitals, individual healthcare professionals, extended care health facilities and alternate site facilities in the United States and abroad, principally in Europe and Japan. In general, the company’s products are intended to be used once and then discarded or implanted either temporarily or permanently. The company reports sales in four major product group categories: vascular, urology, oncology and surgical specialties. The company also has a product group of other products.

The company’s earnings are driven by its ability to continue to generate sales of its products and improve operating efficiency. Bard’s ability to increase sales over time depends upon its success in developing, acquiring and marketing differentiated products that are innovative and cost effective, in order to meet the needs of hospitals, clinicians and their patients. In 2009, the company’s research and development (“R&D”) expense, excluding purchased R&D, as a percentage of net sales was 6.4%. The company expects R&D expense as a percentage of net sales to increase up to a range of 9% to 10% over the next three to five years. The company also makes selective acquisitions of businesses, products and technologies, generally focusing on small to medium sized transactions to provide ongoing growth opportunities. In addition, the company may from time-to-time consider acquisitions of larger, established companies under appropriate circumstances. The company may also periodically divest lines of business in which it is not able to reasonably attain or maintain a leadership position or for other strategic reasons. The company spent $141.1 million in 2009, including purchased R&D, for the acquisition and license of products and technologies.

Acquisitions and Other Initiatives

On November 18, 2009, the company acquired all of the outstanding stock of Y-Med, Inc. (“Y-Med”), a privately-held company focused on the development and manufacture of speciality percutaneous transluminal angioplasty (“PTA”) catheters, for total consideration of $35.3 million. Y-Med’s products complement Bard’s peripheral stents and existing PTA products. Y-Med’s VascuTrak™ 2 PTA Dilatation Catheter product line is designed to treat highly stenotic and calcified lesions in patients with lower-limb arterial disease.

On June 15, 2009, the company acquired worldwide rights and related assets of the hernia products business of Brennen Medical, LLC for $17.0 million. The acquisition included technology for a non-crosslinked xenograft device, which expanded Bard’s product offerings in hernia repair. In connection with this acquisition, the company discontinued the sale of an existing xenograft device and recorded a related non-cash charge of $5.7 million ($5.2 million after tax).

In January 2008, the company acquired the assets of the LifeStent® family of stents from Edwards Lifesciences Corporation (“Edwards Lifesciences”). The company received Pre-Market Approval (“PMA”) from the U.S. Food and Drug Administration (“FDA”) in February 2009 for use of the LifeStent® in the superficial femoral artery (“SFA”) and proximal popliteal artery, which resulted in a contingent milestone payment of $27.0 million. The final $15.0 million contingent milestone payment related to the transfer of manufacturing operations to Bard was paid in September 2009.

For more information on acquisitions, see Note 2 of the notes to consolidated financial statements.

On April 22, 2009, the company announced a plan (the “Plan”) to reduce its overall cost structure and improve efficiency. The Plan included the consolidation of certain businesses in the United States and the realignment of certain sales and marketing functions outside the United States. The Plan resulted in the elimination of certain positions and other employee terminations worldwide. The total cost of the Plan was $15.4 million ($10.2 million after tax). Substantially all of these costs are cash expenditures, of which the majority were paid by the end of 2009. The company expects the Plan to result in pre-tax cost savings of approximately $25 million on an annual basis. See Note 3 of the notes to consolidated financial statements.

 

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Results of Operations

Net Sales

Bard’s 2009 consolidated net sales increased 3% on a reported basis (6% on a constant currency basis) over 2008 consolidated net sales. Consolidated net sales in 2009 reflect the impact that economic conditions had on customer demand in certain areas of the company’s business. Bard’s 2008 consolidated net sales increased 11% on a reported basis (10% on a constant currency basis) over 2007 consolidated net sales. Net sales on a constant currency basis is a non-GAAP financial measure and should not be viewed as a replacement of GAAP results. See Management’s Use of Non-GAAP Measures below. Price changes had the effect of decreasing consolidated net sales by 0.1% and increasing consolidated net sales by 0.2% for 2009 and 2008, respectively, compared to the prior years. Exchange rate fluctuations had the effect of decreasing consolidated net sales by approximately 3% and increasing consolidated net sales by approximately 1% for 2009 and 2008, respectively, compared to the prior years. The primary exchange rate movement that impacts net sales is the movement of the Euro compared to the U.S. dollar. The impact of exchange rate movements on net sales is not indicative of the impact on net earnings due to the offsetting impact of exchange rate movements on operating costs and expenses, costs incurred in other currencies and the company’s hedging activities.

Bard’s 2009 United States net sales of $1,759.2 million increased 6% over 2008 United States net sales of $1,661.3 million. Bard’s 2009 international net sales of $775.7 million decreased 2% on a reported basis and increased 5% on a constant currency basis over 2008 international net sales of $790.8 million. Bard’s 2008 United States net sales increased 9% over 2007 United States net sales of $1,520.6 million. Bard’s 2008 international net sales increased 16% on a reported basis and 12% on a constant currency basis over 2007 international net sales of $681.4 million.

Presented below is a summary of consolidated net sales by disease state.

Product Group Summary of Net Sales

 

     For the Years Ended December 31,  
     2009      2008      Change     Constant
Currency
    2007      Change     Constant
Currency
 
(dollars in millions)       

Vascular

   $ 681.5       $ 643.1         6 %     9   $ 539.6         19     17

Urology

     700.3         708.5         (1 )%     1     658.9         8     7

Oncology

     678.7         646.6         5 %     7     558.6         16     15

Surgical Specialties

     387.8         368.2         5 %     7     363.5         1     —     

Other

     86.6         85.7         1 %     4     81.4         5     5
                                   

Total net sales

   $ 2,534.9       $ 2,452.1         3 %     6   $ 2,202.0         11     10
                                   

Vascular Products - Bard markets a wide range of products for the peripheral vascular market, including endovascular products, electrophysiology products and surgical graft products. Consolidated net sales in 2009 of vascular products increased compared to the prior year due to growth in endovascular products, partially offset by a decline in electrophysiology and surgical graft products. United States net sales in 2009 increased 12% compared to the prior year. International net sales in 2009 decreased 1% on a reported basis (increased 6% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of vascular products increased compared to the prior year due to growth in endovascular and electrophysiology products, partially offset by a decline in surgical graft products. United States net sales in 2008 increased 14% compared to the prior year. International net sales in 2008 increased 25% on a reported basis (19% on a constant currency basis) compared to the prior year. The vascular group is the company’s most global business, with international net sales comprising 45% and 48% of consolidated net sales in 2009 and 2008, respectively.

Consolidated net sales of endovascular products in 2009 increased 12% on a reported basis (15% on a constant currency basis) compared to the prior year. Growth in 2009 was favorably impacted by the PMA approval in February 2009 for the use of LifeStent® in the SFA and proximal popliteal artery. Consolidated net sales of endovascular products in 2008 increased 25% on a reported basis (23% on a constant currency basis) compared to the prior year. Percutaneous transluminal angioplasty balloon catheters, stents and biopsy products contributed to the growth in this category in both 2009 and 2008. Sales from the LifeStent® family of stents acquired in January 2008 and vena cava filters also contributed to growth in 2008.

Consolidated net sales of electrophysiology products in 2009 decreased 3% on a reported basis (increased 1% on a constant currency basis) compared to the prior year. Growth in the steerable diagnostic catheter and atrial fibrillation catheter lines was primarily offset by a decline in the conventional diagnostic catheter line in 2009. Consolidated net sales in 2008 of electrophysiology products increased 18% on a reported basis (15% on a constant currency basis) compared to the prior year. Electrophysiology laboratory systems, steerable and conventional diagnostic catheters, and atrial fibrillation catheters were growth drivers in 2008.

 

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Consolidated net sales of surgical graft products in 2009 decreased 6% on a reported basis (2% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of surgical graft products decreased 1% on a reported basis (4% on a constant currency basis) compared to the prior year. Declining sales in peripheral vascular grafts impacted both 2009 and 2008 results.

Urology Products - Bard markets a wide range of products for the urology market, including basic drainage products, continence products and urological specialty products. Bard also markets StatLock® catheter stabilization products, which are used to secure many types of catheters sold by Bard and other companies. The majority of basic drainage products, StatLock® catheter stabilization devices and certain urological specialty products are sold through distributors. Consolidated net sales in 2009 of urology products decreased compared to the prior year due to declines in continence and urological specialty products, partially offset by an increase in sales of StatLock® products. During 2009, U.S. distributors reduced their inventory of the company’s products in this category, which also contributed to the decrease in net sales. United States net sales in 2009 decreased 2% compared to the prior year. International net sales in 2009 were flat on a reported basis (increased 8% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of urology products increased compared to the prior year due to growth in basic drainage, continence and StatLock® products, partially offset by a decline in urological specialty products compared to the prior year. United States net sales in 2008 increased 7%. International net sales in 2008 increased 8% on a reported basis (7% on a constant currency basis) compared to the prior year.

Basic drainage products represent the core of the company’s urology business. Consolidated net sales in 2009 of basic drainage products were flat on a reported basis (increased 2% on a constant currency basis) compared to the prior year. Sales of basic drainage products in 2009 were impacted by inventory reductions made by distributors. Consolidated net sales in 2008 of basic drainage products increased 9% on both a reported and constant currency basis compared to the prior year. Consolidated net sales in 2009 of infection control Foley catheter products grew 1% on a reported basis (2% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of infection control Foley catheter products grew 16% on both a reported and constant currency basis compared to the prior year.

Consolidated net sales in 2009 of urological specialty products decreased 10% on a reported basis (9% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of urological specialty products decreased 4% on a reported basis (5% on a constant currency basis) compared to the prior year. The decrease in 2009 and 2008 was primarily driven by a decline in brachytherapy sales. The company believes that the brachytherapy market has been losing procedural share to alternative therapies, a trend that may continue.

Consolidated net sales in 2009 of continence products decreased 3% on a reported basis (increased 1% on a constant currency basis) compared to the prior year. Declines in the surgical sling and pelvic floor repair lines were partially offset by growth in the fecal incontinence product line in 2009. Consolidated net sales in 2008 of continence products increased 4% on both a reported basis and constant currency basis compared to the prior year. The surgical sling line was a primary growth driver in the category in 2008.

Consolidated net sales in 2009 of the StatLock® catheter stabilization product line increased 8% on a reported basis (9% on a constant currency basis) compared to the prior year. Sales of StatLock® devices in 2009 were impacted by the inventory reductions made by distributors, which also contributed to the slower growth in net sales. Consolidated net sales in 2008 of the StatLock® catheter stabilization product line increased 26% on a reported basis (25% on a constant currency basis) compared to the prior year.

Oncology Products - The company’s oncology products include specialty vascular access products used primarily for chemotherapy. Sales of specialty access ports and peripherally inserted central catheters (“PICCs”) were the primary growth drivers in the oncology category in 2009. United States net sales in 2009 increased 7% compared to the prior year. International net sales in 2009 were flat on a reported basis (increased 6% on a constant currency basis) compared to the prior year. Sales of specialty access ports, PICCs and vascular access ultrasound devices contributed to growth in 2008. United States net sales in 2008 grew 16% compared to the prior year. International net sales in 2008 grew 14% on a reported basis (10% on a constant currency basis) compared to the prior year.

Surgical Specialty Products - Surgical specialty products include soft tissue repair, performance irrigation and hemostasis product lines. Consolidated net sales in 2009 of surgical specialty products increased compared to the prior year due to growth in soft tissue repair products, partially offset by a decline in performance irrigation products. United States net sales in 2009 increased 11% compared to the prior year. International net sales in 2009 decreased 8% on a reported basis (2% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of surgical specialty products increased due to growth in performance irrigation and hemostasis products, partially offset by a decline in soft tissue repair products compared to the prior year. United States net sales in 2008 decreased 2% compared to the prior year. International net sales in 2008 increased 12% on a reported basis (8% on a constant currency basis) compared to the prior year.

 

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The soft tissue repair product line includes synthetic and natural-tissue hernia repair implants, natural-tissue breast reconstruction implants, and hernia fixation products. Consolidated net sales in 2009 of soft tissue repair products increased 10% on a reported basis (12% on a constant currency basis) compared to the prior year. Growth in the natural-tissue implants for hernia repair and breast reconstruction procedures, and hernia fixation products was partially offset by a decline in synthetic hernia repair implants in 2009. Consolidated net sales in 2008 of soft tissue repair products decreased 1% on a reported basis (2% on a constant currency basis) compared to the prior year due primarily to: (i) the effect of the hold on the manufacture and the subsequent discontinuance of the sale of the Salute II hernia fixation device; and (ii) low growth of synthetic hernia repair implants.

Beginning in December 2005 the company initiated, and later expanded, a voluntary product recall of certain of its Bard® Composix® Kugel® Mesh products intended for ventral hernia repair. In connection with the recall, the FDA conducted several inspections of the company’s Davol, Inc. subsidiary and issued several Form-483 notices and a Warning Letter, each citing observations generally relating to non-conformances in Davol’s quality systems. The company responded to the Form-483 notices and the Warning Letter and, in each case, completed corrective actions to address the observations. In January 2010, the FDA notified the company that the observations relating to its Davol facility contained in the Form-483 notices and the Warning Letter had been satisfactorily resolved and closed out.

On February 13, 2008, the FDA issued a Form-483 notice to the company in connection with an inspection of the company’s manufacturing facility located in Humacao, Puerto Rico. The Form-483 notice identified certain observations regarding the facility’s quality systems. The facility manufactures products for many of the company’s divisions and subsidiaries, including soft tissue repair products for the company’s Davol subsidiary. The company has responded to the FDA and completed corrective actions to address the observations. On July 28, 2008, the company received a Warning Letter from the San Juan District office of the FDA. The Warning Letter related specifically to non-conformances in quality systems previously identified in the related Form-483 notice. The Warning Letter states that, until the company resolves the outstanding issues covered by the Warning Letter, no premarket submissions for Class III devices to which the non-conformances are reasonably related will be cleared or approved. The company presently has no such submissions before the FDA. The company has responded to the Warning Letter and completed corrective actions to address the observations. The FDA conducted a planned re-inspection of the Puerto Rico facility in the third quarter of 2009, which resulted in the issuance of a Form-483 notice identifying certain observations regarding the facility’s quality systems. The company responded to the FDA and is implementing corrective actions to address the observations. In February 2010, the FDA notified the company that its response to the most recent Form-483 notice requires further corrections. The company cannot give any assurances that the FDA will be satisfied with its response to the Warning Letter or any further response related to the most recent Form-483 notice and the associated corrective actions or as to the expected date of resolution of the matters included in the Warning Letter or most recent Form-483 notice. For more information, see Item 1A. “Risk Factors.”

Other Products - The other product group includes irrigation, wound drainage and certain original equipment manufacturers’ products. Consolidated net sales in 2009 of other products increased 1% on a reported basis (4% on a constant currency basis) compared to the prior year. Consolidated net sales in 2008 of other products increased 5% on both a reported basis and constant currency basis compared to the prior year.

Costs and Expenses

The following is a summary of costs and expenses as a percentage of net sales for the following years ended December 31:

 

     2009     2008(A)     2007  

Cost of goods sold

     37.8 %     38.7 %     39.2 %

Marketing, selling and administrative expense

     26.9 %     28.9 %     29.3 %

Research and development expense

     7.1 %     8.1 %     6.2 %

Interest expense

     0.5 %     0.5 %     0.5 %

Other (income) expense, net

     1.2 %     1.2 %     (1.5 )%
                        

Total costs and expenses

     73.5 %     77.5 %     73.7 %
                        

 

(A)

Amounts do not add due to rounding.

 

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Cost of goods sold - Cost of goods sold consists principally of the manufacturing and distribution costs of the company’s products. The category also includes royalties, amortization of intangible assets and the impact of hedging activities. Cost of goods sold as a percentage of net sales for 2009 decreased 90 basis points from the prior year. Reductions in cost of goods sold as a percentage of net sales in 2009 were attributed primarily to cost improvements partially offset by the impact of approximately 20 basis points of incremental amortization of intangible assets acquired in 2008 and 2009. Cost of goods sold as a percentage of net sales for 2008 decreased 50 basis points from the prior year. Reductions in cost of goods sold as a percentage of net sales in 2008 were attributed primarily to cost improvements partially offset by the impact of approximately 40 basis points of incremental amortization of intangible assets acquired in 2007 and 2008.

Marketing, selling and administrative expense - Marketing, selling and administrative expense consists principally of the costs associated with the company’s sales and administrative organizations. These costs as a percentage of net sales for 2009 decreased 200 basis points from the prior year due primarily to company wide spending controls, including the impact of the restructuring plan. See Note 2 of the notes to consolidated financial statements. These costs as a percentage of net sales for 2008 decreased 40 basis points from 2007 due primarily to controlled administrative spending.

Research and development expense - Research and development expense consists principally of the costs related to internal research and development activities, milestone payments for third-party research and development activities, and purchased R&D arising from business development activities. Purchased R&D payments may impact the comparability of the company’s results of operations between periods. The following table presents a summary of research and development expense for the following years ended December 31:

 

     2009      2008      2007  
(dollars in millions)                     

Research and development

   $ 163.5       $ 149.8       $ 134.2   

Purchased research and development

     16.1         49.3         1.6   
                          

Total research and development expense

   $ 179.6       $ 199.1       $ 135.8   
                          

Research and development expense in 2009 decreased approximately 10% compared to the prior year. Included in research and development expense for 2009 was purchased R&D of $16.1 million primarily associated with the acquisition of technology for laparoscopic hernia repair. The entire purchase price related to this asset acquisition was allocated to purchased R&D. Research and development expense in 2008 increased approximately 47% compared to the prior year. Included in the research and development expense for 2008 was purchased R&D of $49.3 million primarily associated with the acquisition of the Lifestent® family of stents from Edwards Lifesciences.

Interest expense - Interest expense in 2009 was $11.8 million as compared with 2008 interest expense of $12.1 million and 2007 interest expense of $11.9 million.

Other (income) expense, net - Other (income) expense, net was $30.5 million, $29.4 million and $(32.3) million for 2009, 2008 and 2007, respectively. These amounts include interest income of $3.6 million, $16.5 million and $30.7 million in 2009, 2008 and 2007, respectively. The decrease in 2009 and 2008 was primarily due to lower global interest rates. Other (income) expense, net in 2009 also included restructuring costs of $15.4 million, non-cash charges of $7.2 million for asset write-offs, insurance settlements, net, of $7.0 million, and an acquisition related adjustment consisting of contract termination costs of $3.2 million. Other (income) expense, net in 2008 also included a non-cash charge of $36.8 million related to the write-off of certain assets as a result of the company’s decision to discontinue the sales of the Salute II hernia fixation device. See Note 13 of the notes to consolidated financial statements.

Income tax provision

The company’s effective tax rate for 2009 was approximately 31% compared to approximately 24% in 2008. The tax rate for the current year reflected the tax effect of the insurance settlements, acquisition related items (primarily purchased R&D) and an increase in the liability for uncertain tax positions resulting from a tax assessment that related to prior periods.

The company’s effective tax rate for 2008 decreased to approximately 24% compared to approximately 30% for 2007. The tax rate for 2008 reflected certain tax positions being effectively settled or remeasured as a result of completion of the U.S. Internal Revenue Service (“IRS”) examination for the tax years of 2003 and 2004. Two tax positions remain under review through the IRS administrative appeals process related to these years. The lower tax rate also reflected the tax effect of purchased R&D charges, primarily associated with the acquisition of the assets of the Lifestent® family of stents from Edwards Lifesciences, partially offset by the tax effect of the Salute II charge. The tax effect of the Salute II charge reflected the write-off of assets, which were primarily located in a low tax jurisdiction.

 

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Net Income Attributable to Common Shareholders and Earnings per Share Available to Common Shareholders

The company reported 2009 net income attributable to common shareholders of $460.1 million, an increase of 10% from 2008 net income attributable to common shareholders of $416.5 million. The company reported 2009 diluted earnings per share available to common shareholders of $4.60, an increase of 14% from 2008 diluted earnings per share available to common shareholders of $4.05. Net income attributable to common shareholders in 2009 reflected acquisition related items of $16.9 million or $0.17 per diluted share, primarily consisting of purchased R&D charges and contract termination costs, insurance settlements, net, of $13.3 million or $0.13 per diluted share, restructuring costs of $10.2 million or $0.10 per diluted share, non-cash charges related to asset write-offs of $6.9 million or $0.07 per diluted share, and an increase in the income tax provision related to an uncertain tax position of $2.1 million or $0.02 per diluted share.

The company reported 2008 net income attributable to common shareholders of $416.5 million, an increase of 2% from 2007 net income attributable to common shareholders of $406.4 million. The company reported 2008 diluted earnings per share available to common shareholders of $4.05, an increase of 6% from 2007 diluted earnings per share available to common shareholders of $3.82. Net income attributable to common shareholders in 2008 reflected a non-cash charge for the write-off of assets related to the Salute II hernia fixation device of $34.9 million, or $0.34 per diluted share, and acquisition related items of $31.1 million, or $0.30 per diluted share consisting of purchased R&D charges, primarily associated with the acquisition of the assets of the Lifestent® family of stents from Edwards Lifesciences. These items were partially offset by a reduction in the income tax provision of $28.3 million, or $0.28 per diluted share, as a result of the completion of the IRS examination for the tax years of 2003 and 2004.

Liquidity and Capital Resources

The company assesses its liquidity in terms of its ability to generate cash to fund its operating, investing and financing activities. Significant factors affecting the management of liquidity are cash flows generated from operating activities, capital expenditures, acquisitions of businesses and technologies, cash dividends and common stock repurchases. Cash balances and cash provided from operations continue to be the company’s primary source of funds. The company believes it could borrow adequate funds at competitive terms should it be necessary. The company believes that its overall financial strength gives it sufficient financial flexibility. The table below summarizes liquidity measures for Bard for the following years ended December 31:

 

     2009      2008      2007  
(dollars in millions)                     

Cash and cash equivalents

   $ 674.4       $ 592.1       $ 488.4   
                          

Working capital

     1,210.1         1,081.1         960.3   
                          

Current ratio

     5.30/1         4.96/1         4.41/1   
                          

For the years ended December 31, 2009, 2008 and 2007, net cash provided by operating activities was $619.3 million, $516.2 million and $547.4 million, respectively. The increase in 2009 reflects improvements in accounts receivable and inventories. The decrease in net cash provided by operating activities in 2008 was due primarily to increases in accounts receivable and inventories.

During 2009, the company used $189.2 million in cash for investing activities, $37.3 million more than in 2008. During 2008, the company used $151.9 million in cash for investing activities, $39.4 million more than in 2007. Capital expenditures amounted to $48.1 million, $50.6 million and $50.7 million for the years ended December 31, 2009, 2008 and 2007, respectively. The company spent approximately $141.1 million in 2009, $185.2 million in 2008 and $83.6 million in 2007 for the acquisition of businesses, products and technologies to augment existing product lines. Net cash provided by the change in short-term investments, net, which matured in 2008, was $82.1 million compared with the net cash provided of $18.6 million in 2007.

During 2009, the company used $378.4 million in cash for financing activities, $162.4 million more than in 2008. During 2008, the company used $216.0 million in cash for financing activities, $170.7 million less than in 2007. Total debt to total capitalization was 6.4%, 7.0% and 7.5% at December 31, 2009, 2008 and 2007, respectively. The company spent approximately $342.2 million to repurchase 4,535,047 shares of common stock in 2009 compared to $227.0 million to repurchase 2,361,492 shares and $422.8 million to repurchase 5,115,138 shares in 2008 and 2007, respectively. The company paid cash dividends of $65.4 million, $62.2 million and $60.1 million in 2009, 2008 and 2007, respectively.

The company maintains a committed syndicated bank credit facility with a $400 million five-year credit agreement that expires in June 2012. The credit facility supports the company’s commercial paper program and can be used for general corporate purposes. The facility includes pricing based on the company’s long-term credit rating and includes a financial covenant that limits the amount of total debt to total capitalization. There were no outstanding borrowings or commercial paper borrowings at December 31, 2009 and 2008, respectively.

 

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Contractual Obligations

A summary of contractual obligations at December 31, 2009 are as follows:

 

(dollars in millions)    Total      1
Year
     2-3
Years
     4-5
Years
     5+
Years
 

Forward contracts

   $ 52.1       $ 52.1       $ —         $ —         $ —     

Long-term debt

     320.5         10.0         20.1         20.1         270.3   

Operating lease obligations

     146.3         22.4         39.1         32.8         52.0   

Acquisition and related milestones

     36.7         11.1         21.6         4.0         —     

Purchase obligations

     142.8         116.4         23.2         1.5         1.7   

Other long-term liabilities

     76.1         6.5         15.0         5.7         48.9   
                                            
   $ 774.5       $ 218.5       $ 119.0       $ 64.1       $ 372.9   
                                            

The table above does not include $53.2 million of the total unrecognized tax benefits for uncertain tax positions and approximately $11.3 million of associated accrued interest. Due to the high degree of uncertainty regarding the timing of potential future cash flows, the company is unable to make a reasonable estimate of the amount and period in which these liabilities might be paid.

Forward contracts - Forward contracts obligate the company for the forward purchase of currencies in which the company has known or anticipated sales or payments.

Long-term debt - Long-term debt includes expected principal and interest payments. The company has $149.8 million of unsecured notes that mature in 2026 and pay a semi-annual coupon of 6.70%.

Operating lease obligations - The company is committed under noncancelable operating leases involving certain facilities and equipment.

Acquisition and related milestones - The company enters into various acquisition and related arrangements, including business combinations, research and development arrangements, and product and intellectual property acquisitions. In connection with some of these activities, the company agrees to make payments to third parties when milestones are achieved, such as the achievement of research and development targets, receipt of regulatory approvals or achievement of performance or operational targets.

Purchase obligations - The company’s business creates a need to enter into commitments with suppliers. These inventory purchase commitments do not exceed the company’s projected requirements over the related terms and are in the normal course of business.

Other long-term liabilities - The company estimates required funding obligations related to its pension and postretirement benefit plans and deferred compensation.

Management’s Use of Non-GAAP Measures

Net sales on a constant currency basis is a non-GAAP financial measure. The company analyzes net sales on a constant currency basis to better measure the comparability of results between periods. Because changes in foreign currency exchange rates have a non-operating impact on net sales, the company believes that evaluating growth in net sales on a constant currency basis provides an additional and meaningful assessment of net sales to both management and the company’s investors. Constant currency growth rates are calculated by translating the prior year’s local currency sales by the current period’s exchange rate. Constant currency growth rates are not indicative of changes in corresponding cash flows. The limitation of these non-GAAP measures is that they do not reflect results on a standardized reporting basis. Non-GAAP financial measures are intended to supplement the applicable GAAP disclosures and should not be viewed as a replacement for GAAP results.

Critical Accounting Policies and Estimates

The preparation of financial statements requires the company’s management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Critical accounting policies are those that require application of management’s most difficult, subjective or complex judgments, often as a result of the need

 

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to make estimates about the effect of matters that are inherently uncertain and may change in subsequent periods. The following is not intended to be a comprehensive list of all of the company’s accounting policies. The company’s significant accounting policies are more fully described in the company’s notes to consolidated financial statements. See Note 1 of the notes to consolidated financial statements. The critical accounting policies described below are areas in which management’s judgment in selecting an available alternative might produce a materially different result.

Revenue Recognition - Generally, sales to end-user customers and European distributors are recognized at the point of delivery, and sales to domestic distributors are recognized at the time of shipment. In certain circumstances, end-user customers may require the company to maintain consignment inventory at the customer’s location. In the case of consignment inventories, revenues and associated costs are recognized upon the notification of usage by the customer.

Share-Based Compensation - Share-based compensation cost is measured at the grant date based on the fair value of the award. Generally, compensation expense is recognized over the vesting period. In order to determine the fair value of stock options on the grant date, the company utilizes a binomial model. Inherent in the binomial model are assumptions related to expected stock-price volatility, option life, risk-free interest rate and dividend yield. The expected stock-price volatility is based upon weightings of the historical volatility of the company’s stock and the implied volatility from publicly traded options. The company reviews the trading volumes and option life of its publicly traded options in order to determine the appropriate weighting of implied volatility. This approach is used as a predictor of future realized and implied volatilities and is directly related to stock option valuations. With respect to the weighted-average option life assumption, the company considers the exercise behavior of past grants and models the pattern of aggregate exercises. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the grant date with a term equal to the contractual term of the stock option.

As share-based compensation expense is based on awards ultimately expected to vest, the amount of expense has been reduced for estimated forfeitures. The company estimates forfeitures at the time of grant based on historical experience and revises estimates, if necessary, in subsequent periods if actual forfeitures differ from those estimates.

Contingencies - The company is subject to various legal proceedings and claims, including, for example, product liability matters, environmental matters, employment disputes, disputes on agreements and other commercial disputes, the outcomes of which are not within the company’s complete control and may not be known for extended periods of time. In some cases, the claimants seek damages, as well as other relief, which, if granted, could require significant expenditures. The company records a liability in its consolidated financial statements for damages and/or costs related to claims, settlements and judgments where the company has assessed that the loss is probable and an amount can be reasonably estimated. If the estimate of a probable loss is a range and no amount within the range is more likely, the company accrues the minimum amount of the range. The company records a receivable from its product liability insurance carriers when those recoveries are probable and collectible. Amounts recovered under these policies may be less than the stated coverage limits and may not be adequate to cover damages and/or costs. In addition, there is no guarantee that insurers will pay claims or that coverage will be otherwise available. Legal costs associated with these matters are expensed as incurred. See Note 10 of the notes to consolidated financial statements.

Income Taxes - The company operates in multiple taxing jurisdictions, both within the United States and internationally. The company regularly assesses its tax positions and includes reserves for uncertain tax positions. These positions relate to transfer pricing, the deductibility of certain expenses, intercompany transactions and other matters. Effective January 1, 2007, the company adopted Financial Accounting Standards Board (“FASB”) authoritative guidance on the accounting for uncertainty in income taxes. See Note 4 of the notes to consolidated financial statements. Although the outcome of tax audits is uncertain, in management’s opinion, adequate provisions for income taxes have been made for potential liabilities resulting from such matters. The recognition and measurement of a tax position is based on the company’s best judgment given the facts, circumstances and information available at the reporting date. The reserves are utilized or reversed once the statute of limitations has expired or the position is effectively settled. The company believes that the ultimate outcome of these matters will not have a material impact on its financial condition and/or liquidity but may be material to the income tax provision and results of operations.

Allowance for Doubtful Accounts, Customer Rebates and Inventory Writedowns - The company makes estimates of the uncollectibility of the company’s accounts receivable, amounts that are rebated to specific customers in accordance with contractual requirements and inventory adjustments to reflect inventory valuation at the lower of cost or market. In estimating the reserves necessary for the allowance for doubtful accounts, management considers historical bad debt trends, customer concentrations, customer creditworthiness and current economic trends. The company establishes an allowance for doubtful accounts for estimated amounts that are uncollectible from customers. In estimating the allowance for customer rebates, management considers the lag time between the point of sale and the payment of the customer’s rebate claim, customer specific trend analysis and contractual commitments including the stated rebate rate. The company establishes an allowance for customer rebates and reduces sales for such rebate amounts. In estimating the adjustment for inventory writedowns,

 

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management considers product obsolescence, quantity on hand, future demand for the product and other market-related conditions. The company records an adjustment for inventory writedowns when such conditions cause the inventory market value to be below carrying value. The company records such adjustments to cost of sales in the period in which the condition exists.

It is possible that the underlying factors discussed above for the allowance for doubtful accounts, customer rebates and inventory writedowns could change. Depending on the extent and nature of the change to the underlying factors, the impact to the company’s results of operations and financial condition could be material in the period of change.

Acquisitions - On January 1, 2009, the company adopted new FASB guidance on accounting for business combinations. This guidance changes the way in which the purchase method is applied in a business combination. The guidance contains significant revisions requiring an acquirer to measure the identifiable assets acquired and liabilities assumed at their fair value, with goodwill being the excess value of consideration paid over the fair value of the net identifiable assets acquired. This guidance also requires that acquired in-process research and development be capitalized and recorded as an intangible asset at the acquisition date, that contingent consideration be recorded at fair value at the acquisition date, and that transaction costs are to be expensed. The amount of the purchase price allocated to purchased R&D and other intangible assets is determined by estimating the future cash flows of each project or technology and discounting the net cash flows back to their present values. The discount rate used is determined at the time of the acquisition in accordance with accepted valuation methods. For purchased R&D, these methodologies include consideration of the risk of the project not achieving commercial feasibility. When the company acquires net assets that do not constitute a business under generally accepted accounting principles in the United States, no goodwill is recognized. The judgments made in determining fair value assigned to assets acquired and liabilities assumed, as well as asset lives, can materially impact results of operations.

Impairment of Long-Lived Assets - Goodwill is tested for impairment annually, or more frequently if changes in circumstances or the occurrence of events suggest an impairment exists. Intangible assets other than goodwill and other long-lived assets, such as property, plant and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The company evaluates the recoverability of assets to be held and used by comparing the carrying amount of an asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of an asset exceeds its estimated future cash flows, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the fair value of the asset.

Pension Plans - The company sponsors pension plans covering substantially all domestic employees and certain foreign employees who meet eligibility requirements. Several statistical and other factors that attempt to anticipate future events are used in calculating the expense and liability related to the plans. These factors include assumptions about the discount rate, expected return on plan assets and rate of future compensation increases as determined by the company. In addition, the company’s actuarial consultants also use subjective factors, such as withdrawal and mortality rates, to estimate these factors. The actuarial assumptions used by the company may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of the participants. A change of plus (minus) 25 basis points in the discount rate assumption, with other assumptions held constant, would have an estimated $0.8 million favorable (unfavorable) impact on the company’s net pension cost. A change of plus (minus) 25 basis points in the expected rate of return on plan assets assumption, with other assumptions held constant, would have an estimated $0.7 million favorable (unfavorable) impact on the company’s net pension cost.

New Accounting Pronouncements Not Yet Adopted

In June 2009, the FASB amended previous consolidation guidance regarding variable interest entities. This statement eliminates the quantitative approach previously required for determining the primary beneficiary of a variable interest entity and requires a qualitative analysis to determine whether an enterprise’s variable interest gives it a controlling financial interest in a variable interest entity. This statement also requires ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity and is effective as of the beginning of Bard’s 2010 fiscal year. The impact of the adoption of this statement is not expected to be material to the company’s consolidated financial statements.

Risks and Uncertainties; Cautionary Statement Regarding Forward-Looking Information

Certain statements contained herein or in other company documents and certain statements that may be made by management of the company orally may contain forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. They use words such as “anticipate,” “estimate,” “expect,” “project,” “intend,” “forecast,” “plan,” “believe” and other words and terms of similar meaning in connection with any discussion of future operating or financial performance. In particular, these include statements relating to product approvals, future performance of current and anticipated products, sales efforts,

 

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expenses, the outcome of contingencies, such as legal proceedings, and financial results. The company’s forward-looking statements speak only as of the date of this report or as of the date they are made, and the company undertakes no obligation to update its forward-looking statements.

In addition, there are substantial risks inherent in the medical device business. The company’s business involves the design, development, manufacture, packaging, distribution and sale of life-sustaining medical devices. These devices are often utilized on, or permanently or temporarily implanted in, patients in clinically demanding circumstances, such as operating rooms, emergency units, intensive care and critical care settings, among others. These circumstances, among other factors, can cause the products to become associated with adverse clinical events, including patient mortality and injury, and could lead to product liability claims (including lawsuits seeking class action status or seeking to establish multi-district litigation proceedings) and other litigation, product withdrawals, Warning Letters, recalls, field corrections or regulatory enforcement actions relating to one or more of the company’s products, any of which could have a material adverse effect on our business, results of operations, financial condition and/or liquidity.

Because actual results are affected by these and other risks and uncertainties, the company cautions investors that actual results may differ materially from those expressed or implied. It is not possible to predict or identify all risks and uncertainties, but the most significant factors, in addition to those addressed above and those under Item 1A. “Risk Factors,” that could adversely affect our business or cause the actual results to differ materially from those expressed or implied include, but are not limited to:

Effective management of and reaction to risks involved in our business, including:

 

   

the ability to achieve manufacturing or administrative efficiencies, including gross margin benefits from our manufacturing process and supply chain programs or in connection with the integration of acquired businesses;

 

   

the effects of negative publicity concerning our products, which could result in product withdrawals or decreased product demand and which could reduce market or governmental acceptance of our products;

 

   

the ability to identify appropriate companies, businesses and technologies as potential acquisition candidates, to consummate and successfully integrate such transactions or to obtain agreements for such transactions with favorable terms;

 

   

the reduction in the number of procedures using our devices caused by customers’ cost-containment pressures or preferences for alternate therapies;

 

   

the ability to maintain or increase research and development expenditures;

 

   

the uncertainty of whether increased research and development expenditures and sales force expansion will result in increased sales;

 

   

the ability to maintain our effective tax rate and uncertainty related to tax audits, appeals and litigation;

 

   

internal factors, such as retention of key employees, including sales force employees;

 

   

the ability to achieve earnings forecasts, which are generated based, among other things, on projected volumes and sales of many product types, some of which are more profitable than others;

 

   

changes in factors and assumptions or actual results that differ from our assumptions on stock valuation and employee stock option exercise patterns, which could cause compensation expense recorded in future periods to differ significantly from the compensation expense recorded in the current period;

 

   

changes in factors and assumptions could cause pension cost recorded in future periods to differ from the pension cost recorded in the current period;

 

   

the effect of market fluctuations on the value of assets in the company’s pension plans and the possibility that the company may need to make additional contributions to the plans as a result of any decline in the fair value of such assets;

 

   

damage to a company facility, which could render the company unable to manufacture one or more products (as the company may utilize only one manufacturing facility for certain of its major products) and may require the company to reduce the output of products at the damaged facility thereby making it difficult to meet product shipping targets;

 

   

the potential impairment of goodwill and intangible assets of the company resulting from insufficient cash flow generated from such assets specifically, or our business more broadly, so as to not allow the company to justify the carrying value of the assets;

 

   

the ability to obtain appropriate levels of product liability insurance on reasonable terms; and

 

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the ability to recover for claims made to our insurance companies; and

 

   

the ability to realize the anticipated benefits of the company’s plan announced in 2009 to improve its overall cost structure and improve efficiency.

Competitive factors, including:

 

   

the trend of consolidation in the medical device industry as well as among our customers, resulting in potentially greater pricing pressures and more significant and complex contracts than in the past, both in the United States and abroad;

 

   

development of new products or technologies by competitors having superior performance compared to our current products or products under development which could negatively impact sales of our products or render one or more of our products obsolete;

 

   

technological advances, patents and registrations obtained by competitors that would have the effect of excluding the company from new market segments or preventing the company from selling a product or including key features in the company’s products;

 

   

attempts by competitors to gain market share through aggressive marketing programs; and

 

   

reprocessing by third-party reprocessors of our products designed and labeled for single use.

Difficulties and delays inherent in the development, manufacturing, marketing and sale of medical products, including:

 

   

the ability to complete planned clinical trials successfully, to develop and obtain regulatory approval for products on a timely basis and to launch products on a timely basis within cost estimates;

 

   

lengthy and costly regulatory approval processes, which may result in lost market opportunities;

 

   

delays or denials of, or grants of low or reduced levels of reimbursement for, procedures using newly developed products;

 

   

the suspension or revocation of authority to manufacture, market or distribute existing products;

 

   

the imposition of additional or different regulatory requirements, such as those affecting manufacturing and labeling;

 

   

performance, efficacy or safety concerns for existing products, whether scientifically justified or not, that may lead to product discontinuations, product withdrawals, recalls, field corrections, regulatory enforcement actions, litigation or declining sales, including with respect to the company’s vena cava filters, pelvic floor repair products and hernia repair products;

 

   

FDA inspections resulting in FDA Form-483 notices and/or Warning Letters identifying deficiencies in the company’s manufacturing practices and/or quality systems; Warning Letters identifying violations of FDA regulations that could result in product holds, recalls, restrictions on future clearances by the FDA and/or civil penalties;

 

   

the failure to obtain, limitations on the use of, or the loss of, patent and other intellectual property rights, and the failure of efforts to protect our intellectual property rights against infringement and legal challenges that can increase our costs;

 

   

difficulties obtaining necessary components or raw materials used in the company’s products and/or price increases from the company’s suppliers of critical components or raw materials, including oil-based resins, or other interruptions of the supply chain; and

 

   

customers that may limit the number of manufacturers or vendors from which they will purchase products, which can result in the company’s inability to sell products to or contract with large hospital systems, integrated delivery networks or group purchasing organizations.

Governmental action, including:

 

   

the impact of continued healthcare cost containment;

 

   

new laws and judicial decisions related to healthcare availability, healthcare reform, payment for healthcare products and services or the marketing and distribution of products, including legislative or administrative reforms to the United States Medicare and Medicaid systems or other United States or international reimbursement systems in a manner that would significantly reduce or eliminate reimbursements for procedures that use the company’s products;

 

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changes in the FDA and/or foreign regulatory approval processes that may delay or prevent the approval of new products and result in lost market opportunity;

 

   

the impact of more vigorous compliance and enforcement activities affecting the healthcare industry in general or the company in particular;

 

   

changes in the tax or environmental laws or standards affecting our business;

 

   

changes in the law that could require facility upgrades or process changes and could affect production rates and output; and

 

   

compliance costs and potential penalties and remediation obligations in connection with environmental laws, including regulations regarding air emissions, waste water discharges and solid waste.

Legal disputes, including:

 

   

disputes over intellectual property rights;

 

   

product liability claims, including lawsuits seeking class action status or seeking to establish multi-district litigation proceedings, including with respect to our Composix® Kugel® and certain other hernia repair implant products;

 

   

claims asserting securities law violations;

 

   

claims asserting, and/or subpoenas seeking information regarding, violations of law in connection with federal and/or state healthcare programs such as Medicare or Medicaid;

 

   

derivative shareholder actions;

 

   

claims and subpoenas asserting antitrust violations;

 

   

commercial disputes, including disputes over distribution agreements, license agreements, manufacturing/supply agreements, development/research agreements, acquisition or sale agreements, and insurance policies; and

 

   

environmental claims, including risks relating to accidental contamination or injury from the use of hazardous materials in the company’s manufacturing, sterilization and research activities and the potential for the company to be held liable for any resulting damages.

General economic conditions, including:

 

   

international and domestic business conditions;

 

   

political or economic instability in foreign countries;

 

   

interest rates;

 

   

foreign currency exchange rates;

 

   

changes in the rate of inflation; and

 

   

instability of global financial markets and economies.

Other factors beyond our control, including catastrophes, both natural and man-made, earthquakes, floods, fires, explosions, acts of terrorism or war.

 

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PART IV

 

Item 15. Exhibits

 

Exhibit
Number

  

Exhibit Description

31.1    Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2    Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.

 

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

 

   

C. R. BARD, INC.

(Registrant)

Date: December 15, 2010     By:  

/S/    TODD C. SCHERMERHORN        

      Todd C. Schermerhorn
      Senior Vice President and
      Chief Financial Officer

 

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INDEX TO EXHIBITS

 

Exhibit
Number

  

Exhibit Description

31.1    Rule 13a-14(a) / 15d-14(a) Certification of Chief Executive Officer.
31.2    Rule 13a-14(a) / 15d-14(a) Certification of Chief Financial Officer.