Bio-Rad Laboratories Annual Report 2011

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FY2011 Annual Report · Bio-Rad Laboratories

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Bio-Rad Laboratories
Annual Report 2011

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Life S cience
Research

Clinical Diagnostics

Customer
Relationships

START HERE

Better
Healthcare

Innovation &
Product Development

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START HE RE

A Guide to Bio-Rad’s
Success in 2011

For over halF a century, Bio-
For over hal
For over hal

d has charted a course
a century, Bio-rrraaaaaaad has charted a course
d has charted a course
d has charted a course
d has charted a course
d has charted a course
d has charted a course

progress and growth that has led the company in
ooFF progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in
progress and growth that has led the company in

many important directions. onn each o
many important directions.
many important directions.
many important directions.
many important directions.
many important directions.
many important directions.
these pathways,
each oFFFFF these pathways,
these pathways,
these pathways,
these pathways,
each o
each o
each o

every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing
every step along the way has represented a continuing

evolution in our eFForts to consistently o
evolution in our e
evolution in our e
evolution in our e
evolution in our e
evolution in our e
evolution in our e
er high quality
orts to consistently oFFFFer high quality
er high quality
er high quality
orts to consistently o
orts to consistently o
orts to consistently o

scientiFic
scienti
scienti
r the advancement oFFF scienti
r the advancement o
products and services For the advancement o
products and services
products and services
products and services
products and services
products and services
products and services
products and services

healthcare.
discovery and the improvement oF healthcare.
healthcare.
discovery and the improvement o
discovery and the improvement o
discovery and the improvement o
discovery and the improvement o
discovery and the improvement o
discovery and the improvement o
discovery and the improvement o

n 2011, we continued the journey, delivering the innovative
in 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative
n 2011, we continued the journey, delivering the innovative

products and solutions our customers have asked For,
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked
products and solutions our customers have asked

om automating processes to developing tests with
FFrrrom automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with
om automating processes to developing tests with

greater speed, accuracy, and sensitivity—all oF which
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o
greater speed, accuracy, and sensitivity—all o

leads to the ultimate destination: BBBeetter healthcare For all.
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:
leads to the ultimate destination:

But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.
But, then, that’s only just the start.

Innovative
S olutions

High Q uality
Products

Scientific
Discovery

Letter To Our
Shareholders

As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
As we predicted, 2011 was a challenging year. However, amid all the natural
disasters, economic upheaval, and geopolitical changes, we continued to make
disasters, economic upheaval, and geopolitical changes, we continued to make
disasters, economic upheaval, and geopolitical changes, we continued to make
disasters, economic upheaval, and geopolitical changes, we continued to make
disasters, economic upheaval, and geopolitical changes, we continued to make
disasters, economic upheaval, and geopolitical changes, we continued to make
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
progress. In fact, we reached a real milestone in the Company’s history, passing
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
the $2 billion mark in revenue. Some of you may remember that it was 2004 when
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
we crossed the $1 billion threshold. Our growth of 7.6% this year is modest by
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.
recent historical standards, but respectable given the economic turmoil around us.

2011 was a year of resolve, as we continued
2011 was a year of resolve, as we continued
2011 was a year of resolve, as we continued
2011 was a year of resolve, as we continued

important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet
important area of DNA amplification. Droplet

to watch our costs. At the same time, we
to watch our costs. At the same time, we
to watch our costs. At the same time, we
to watch our costs. At the same time, we
to watch our costs. At the same time, we

digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare
digital PCR allows scientists to distinguish rare

made key, strategic investments, including in
made key, strategic investments, including in
made key, strategic investments, including in

sequences in tumors and precisely measure
sequences in tumors and precisely measure
sequences in tumors and precisely measure
sequences in tumors and precisely measure

R&D, which grew to $186.4 million for the year.
R&D, which grew to $186.4 million for the year.
R&D, which grew to $186.4 million for the year.
R&D, which grew to $186.4 million for the year.
R&D, which grew to $186.4 million for the year.

copy number variation. During the summer, we
copy number variation. During the summer, we
copy number variation. During the summer, we
copy number variation. During the summer, we
copy number variation. During the summer, we

During the year, we introduced more than 130
During the year, we introduced more than 130
During the year, we introduced more than 130
During the year, we introduced more than 130
During the year, we introduced more than 130

introduced several additional PCR thermal
introduced several additional PCR thermal
introduced several additional PCR thermal
introduced several additional PCR thermal
introduced several additional PCR thermal

new products and systems and were granted
new products and systems and were granted
new products and systems and were granted
new products and systems and were granted

cyclers that enhance usability through the
cyclers that enhance usability through the
cyclers that enhance usability through the
cyclers that enhance usability through the

27 new patents, bringing our total intellectual
27 new patents, bringing our total intellectual
27 new patents, bringing our total intellectual
27 new patents, bringing our total intellectual

incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,
incorporation of touch-screen technology,

property portfolio to just over 1,000 patents.
property portfolio to just over 1,000 patents.
property portfolio to just over 1,000 patents.

including the C1000 Touch™™ thermal cycler,
thermal cycler,
thermal cycler,
thermal cycler,
thermal cycler,
thermal cycler,
including the C1000 Touch
including the C1000 Touch
including the C1000 Touch

Manufacturing and procurement continued
Manufacturing and procurement continued
Manufacturing and procurement continued

which offers extremely high thermal perfor-
which offers extremely high thermal perfor-
which offers extremely high thermal perfor-
which offers extremely high thermal perfor-
which offers extremely high thermal perfor-
which offers extremely high thermal perfor-

to be priorities for us as we expanded invest-
to be priorities for us as we expanded invest-
to be priorities for us as we expanded invest-

mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On
mance for large, high-throughput labs. On

ments in facilities and global operations to
ments in facilities and global operations to
ments in facilities and global operations to
ments in facilities and global operations to
ments in facilities and global operations to
ments in facilities and global operations to
ments in facilities and global operations to

the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact
the other end of the spectrum, the compact

support growth and to increase our purchasing
support growth and to increase our purchasing
support growth and to increase our purchasing
support growth and to increase our purchasing
support growth and to increase our purchasing
support growth and to increase our purchasing

T100T100T100™ thermal cycler is small and well-suited
thermal cycler is small and well-suited
thermal cycler is small and well-suited

power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-
power. Additionally, we launched a major proj-

for researchers who prefer to have a personal
for researchers who prefer to have a personal
for researchers who prefer to have a personal
for researchers who prefer to have a personal

ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),
ect to globalize our business systems (ERP),

instrument on their bench.
instrument on their bench.

to help us leverage our size and diversity.
to help us leverage our size and diversity.
to help us leverage our size and diversity.
to help us leverage our size and diversity.
to help us leverage our size and diversity.
to help us leverage our size and diversity.

In the area of diagnostics, we were pleased to
In the area of diagnostics, we were pleased to
In the area of diagnostics, we were pleased to
In the area of diagnostics, we were pleased to

Late in the year, we were successful in acquir-
Late in the year, we were successful in acquir-
Late in the year, we were successful in acquir-
Late in the year, we were successful in acquir-
Late in the year, we were successful in acquir-
Late in the year, we were successful in acquir-

receive FDA Premarket Application approval
receive FDA Premarket Application approval
receive FDA Premarket Application approval

ing an exciting and innovative new technology
ing an exciting and innovative new technology
ing an exciting and innovative new technology
ing an exciting and innovative new technology
ing an exciting and innovative new technology
ing an exciting and innovative new technology
ing an exciting and innovative new technology

for our fourth-generation HIV assay, a test that
for our fourth-generation HIV assay, a test that
for our fourth-generation HIV assay, a test that
for our fourth-generation HIV assay, a test that

called droplet digital PCR, which promises to
called droplet digital PCR, which promises to
called droplet digital PCR, which promises to

detects both HIV antigens and HIV antibodies,
detects both HIV antigens and HIV antibodies,
detects both HIV antigens and HIV antibodies,
detects both HIV antigens and HIV antibodies,

extend our leadership position and reach in the
extend our leadership position and reach in the
extend our leadership position and reach in the
extend our leadership position and reach in the
extend our leadership position and reach in the
extend our leadership position and reach in the

offering earlier detection of HIV infections.
offering earlier detection of HIV infections.
offering earlier detection of HIV infections.

2 Bio-Rad Laboratories

Annual Report 2011
Bio-Rad Laboratories Annual Report 2011

While the worldwide economic malaise is
While the worldwide economic malaise is
While the worldwide economic malaise is
While the worldwide economic malaise is
While the worldwide economic malaise is
While the worldwide economic malaise is
While the worldwide economic malaise is

we are as a company today. We can’t predict
we are as a company today. We can’t predict
we are as a company today. We can’t predict
we are as a company today. We can’t predict
we are as a company today. We can’t predict

expected to continue for 2012, we have a
expected to continue for 2012, we have a
expected to continue for 2012, we have a
expected to continue for 2012, we have a
expected to continue for 2012, we have a
expected to continue for 2012, we have a
expected to continue for 2012, we have a

the future or what new milestones we may
the future or what new milestones we may
the future or what new milestones we may
the future or what new milestones we may
the future or what new milestones we may
the future or what new milestones we may
the future or what new milestones we may

lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year
lot to look forward to, in this, our 60th year

achieve in our upcoming journeys, but we
achieve in our upcoming journeys, but we
achieve in our upcoming journeys, but we
achieve in our upcoming journeys, but we
achieve in our upcoming journeys, but we
achieve in our upcoming journeys, but we

of operation. With the acquisition of Biotest
of operation. With the acquisition of Biotest
of operation. With the acquisition of Biotest
of operation. With the acquisition of Biotest
of operation. With the acquisition of Biotest
of operation. With the acquisition of Biotest

are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for
are confident that we are well positioned for

in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.
in 2010, for example, our entry into the U.S.

whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we
whatever lies ahead. While many may feel we

market for blood typing continues to bear fruit
market for blood typing continues to bear fruit
market for blood typing continues to bear fruit
market for blood typing continues to bear fruit
market for blood typing continues to bear fruit
market for blood typing continues to bear fruit

have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think
have reached a destination, we’d rather think

as we become more established in this very
as we become more established in this very
as we become more established in this very
as we become more established in this very
as we become more established in this very
as we become more established in this very
as we become more established in this very
as we become more established in this very

that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.
that we are only just beginning.

important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out
important market. We are beginning to roll out

our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce
our new website and increase e-commerce

capabilities to the rest of the world, giving our
capabilities to the rest of the world, giving our
capabilities to the rest of the world, giving our
capabilities to the rest of the world, giving our

customers improved tools with which to interact
customers improved tools with which to interact
customers improved tools with which to interact
customers improved tools with which to interact

with us. We are just at the starting gate with the
with us. We are just at the starting gate with the
with us. We are just at the starting gate with the

introduction of droplet digital PCR technology,
introduction of droplet digital PCR technology,
introduction of droplet digital PCR technology,

and have a full lineup of products in the pipeline
and have a full lineup of products in the pipeline
and have a full lineup of products in the pipeline

for introduction in 2012.
for introduction in 2012.

As we enter this milestone year, we have
As we enter this milestone year, we have

spent some time looking back at the many
spent some time looking back at the many
spent some time looking back at the many
spent some time looking back at the many

roads we have traveled to get here. Each
roads we have traveled to get here. Each
roads we have traveled to get here. Each
roads we have traveled to get here. Each

path has, in its own way, contributed to who
path has, in its own way, contributed to who
path has, in its own way, contributed to who
path has, in its own way, contributed to who
path has, in its own way, contributed to who

We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest
We thank you for your continued interest

and support.
and support.
and support.
and support.
and support.

norman Schwartz

PreSiDe nt

David Schwartz

Chairman of the BoarD

Life Science
Research

BIo-RaD’S LIfe ScIence GRouP offeRS PRoDuctS

tHat HeLP ReSeaRcHeRS anSweR comPLex BIoLoGIcaL

QueStIonS. many of tHeSe PRoDuctS, wHIcH

SePaRate, PuRIfy, IDentIfy, anD amPLIfy BIoLoGIcaL

mateRIaLS SucH aS PRoteInS, nucLeIc acIDS, anD

BacteRIa, aRe uSeD In eStaBLISHeD ReSeaRcH

tecHnIQueS, BIoPHaRmaceutIcaL PRoDuctIon

PRoceSSeS, anD fooD teStInG.

therm al c yclers

In the early 1950s, when new insights were being
made into the molecular structure of Dna, Bio-Rad
founders David and alice Schwartz were embark-
ing on their own journey of discovery. Knowing first-
hand the often tedious job of preparing samples for
analysis, the couple set about to create a company
that would provide scientists with the tools they
needed to conduct their research.

from these humble beginnings, over a half-
century ago, Bio-Rad has continued to develop
products that help researchers make more pro-
ductive use of their time, and ultimately, acceler-
ate the process of discovery. today, the company
is an internationally recognized leader in its field.

nowhere is that leadership more apparent than
in the market for thermal cyclers—Polymerase
chain Reaction (PcR) instruments—that replicate
and amplify fragments of Dna. Since our first
product was introduced in 1988, Bio-Rad has led
the way in thermal cycler innovation, continuing to
offer a unique family of products for PcR research
with increased levels of ease and efficiency.

Separating Dna and proteins with a process
called gel electrophoresis is another area in which
Bio-Rad has over 30 years of leadership, offer-
ing the fastest separation and imaging capabili-
ties available. most recently, Bio-Rad introduced

the V3 Western Workflow™ system, a group of
best-in-class products that, when used together,
enable researchers to analyze their process in
ways they were otherwise not able to do, saving
time and generating more reliable and robust data.
the V3 western workflow is centered around a
common analytical technique called a “western
blot”, which is used to identify specific proteins
and determine protein weight in a given sample.

the first step in the process of the V3 western
workflow is performing electrophoresis using
stain-free tGx™ precast gels to separate proteins.
next, researchers can visualize their separations
using a Gel Doc™ eZ imaging system or chemiDoc™
mP imaging system. the next step is the transfer
of proteins from the gel to a more solid and stable
membrane—a process that is now completed
more quickly than ever thanks to Bio-Rad’s ready-
to-use Trans-Blot® Turbo™ transfer system.
afterward, there is more verification and validation
to determine if the results are biologically relevant
by defining the amount of protein present in a cell
or tissue sample. the entire V3 western workflow
delivers results in a single day—half the time of a
traditional western blot process.

In the 1960s, with a focus on greater efficiency,
higher reliability, and innovation, continued on page 8

V3 w estern
w orkflo w

trans-Blot turbo
transfer Syste m

1 V

Separate

Verify

Visualize

Visualize, Verify, and Validate

with the V3 western workflow

Transfer

system, offering best-in-class

products for electrophoresis,

blotting, and imaging and unmatched

Value for running western blots.

Bio-Rad Laboratories Annual Report 2011

set up is as easy as 1-2-3 with the

c1000 touch thermal cycler, which

offers superior performance and a

large color touch screen for fast

and easy protocol programming.

AMPLIFYING DNA: THE NEWEST
GENERATION OF THERMAL CYCLERS

Polymerase Chain Reaction, or
PCR, is a technique commonly used
in a wide range of medical and
biological research, from analysis
and forensic investigation—where
there may be only a few drops of
blood available—to the basic study
and identification of genes. Similar
to the function of a photocopier,
PCR amplifies selected sections
of nucleic acid into thousands,
millions, even billions of specific
copies, so researchers have
adequate samples with which to
make specific proteins, compare
gene sequences, and perform
a variety of other applications.
Bio-Rad has been an important
contributor to this area for over two
decades, supplying thermal cyclers,
reagents, and related products.

The newest generation of PCR
instrumentation made its debut
in 2008 with Bio-Rad’s innovative
1000-series thermal cycler plat-
form, which for the first time

allowed researchers to automate
the writing of protocols used to
amplify DNA. With the 1000-series
thermal cyclers, all the researcher
needed to do was enter the experi-
ment’s parameters and the device
would automatically generate a
“recipe” the instrument would
use. As a result, researchers could
achieve more accurate and reliable
results—with shorter run times and
optimized thermal performance.

Today, the C1000 Touch thermal
cycler offers yet a new level of
user-friendliness, with a stream-
lined, touch-screen interface and a
minimum number of button clicks.
This allows researchers to focus at
a greater degree on their experi-
ments—and not on their tools. In
late 2011, Bio-Rad introduced a
droplet digital PCR platform that
takes PCR to the next level, by offer-
ing researchers the quantification of
target molecules with unprecedent-
ed precision and sensitivity.

Bio-Rad Laboratories annual Report 2011

clinical
Diagnostics

Bio-Rad’s CliniCal diagnostiCs gRoup pRovides a
BRoad Range of pRoduCts that seRve CliniCal
laBoRatoatoa Ries in the gloBal diagnostiCs maRket.
these pRoduCts addRess speCifiC niChes within
the mediCal diagnostiCs test maRket and Consist
of instRuments, Reagents, and softwaRe.

Platelia D engue
n S 1 a g assay

HIV Screening

the company was led in another direction when
it discovered a new market that was after similar
benefits. Physicians and hospital pathologists at
the time were seeking a more reliable method for
determining thyroid function, an important mea-
sure of human metabolic activity. the first stop
on this new journey was Bio-Rad’s introduction
of the t-4 (thyroxine) test, one of the first com-
mercially available tests to accurately determine
thyroid function. this product led to the formation
of the company’s clinical Diagnostics Group,
which in later years established itself as a leader
in the field, offering products used for medical
screening and diagnostics.

case in point: hiV screening. Bio-Rad has a
long history of providing laboratories the tools
they need for HIV detection. In 2011, the company
introduced to the u.S. market its fourth-generation
HIV assay. Identifying both HIV antigens and HIV
antibodies in the same test offers earlier detection
of infections.

the detection of blood-borne diseases, which can
be spread through the contamination of blood, is
not the only area of blood testing for which Bio-
Rad has developed products. for those laboratories
testing blood for transfusions or to replace blood
lost either during surgery or resulting from a
critical injury, Bio-Rad created the ih-1000 blood
typing system. this new approach to blood bank

workflow is designed to help laboratories that
are increasingly struggling to find qualified and
experienced technicians.

the IH-1000 system utilizes the gold standard
ID-System gel card technology, offering full
automation, high throughput, and integrated
quality control and validation software featuring
an intuitive user interface. Its state-of-the-art
robotic and mechanical systems ensure uninter-
rupted operations for walk-away convenience
and reliability. Bio-Rad also offers the tanGo™
optimo automated blood typing system, which
provides a high level of automation and is based
on microplate technology.

one of the critical functions played by many of
these labs is the screening and early detection of
harmful viruses such as dengue fever, a viral dis-
ease that results in widespread infections every
year in people located in tropical and subtropical
regions around the world.

to combat its spread, Bio-Rad, in partnership with
the national center for Scientific Research (centre
national de la Recherche Scientifique, or “cnRS”),
in france, introduced the platelia™ dengue ns1
ag assay, a test shown to be over 90% effective
in detecting the Dengue virus nS1 antigen as soon
as the first clinical signs appear. continued on page 13

8 Bio-Rad Laboratories Annual Report 2011

fourth-generation
HIV assay

open the door, load the sample,

and walk away; it’s that easy

with the ih-1000 automated blood

typing system, designed for

high-Volume blood testing for our

customers outside the u.s.

IH-1000 Blood
typing Syste m

oVer 1 million
people liVing with hiV

in the united states

10 Bio-Rad Laboratories annual Report 2011

HIV SCREENING: FASTER TO TREATMENT

According to the most recent
information published by the
World Health Organization,
approximately 34 million people
worldwide were estimated to
be living with HIV in 2010. Early
detection of the disease leads to
early treatment and helps prevent
new infections of the virus. But
how to diagnose faster?

The body’s immunological
response to HIV is to produce
antibodies—proteins used to
fight infection—but that only
happens after a sharp increase
in the level of antigens—proteins
that are part of the virus itself.
These antigens are not detected
by current, third-generation

HIV assays. As a result, the HIV
antigen window represents lost
time for alerting patients, when
they tend to be most infectious.
This earlier detection reduces the
likelihood of transmission.

With Bio-Rad’s new fourth-
generation HIV assay, both
types of proteins can be found
using the same test, resulting
in faster diagnosis, in turn
enabling HIV-infected individuals
to get the treatment they need
more quickly. At the same time,
the assay contributes to the
prevention of new infections
of the virus.

those infected with hiV are most

infectious in the first few months and

many are unaware of their status

until later stages. bio-rad’s

fourth-generation hiV assay

offers early detection so that

treatment can begin sooner.

AN APPLET FOR THAT:
SUPPORTING OUR
CUSTOMERS REMOTELY

From work to play to the routines
of everyday life, we are all
increasingly connected by tech-
nology. When our technological
devices malfunction, all activity
seems to grind to a stop.

In healthcare, where the stakes
tend to be much higher, it is im-
perative that work does not stop—
or not for long—when problems
arise. Which is why Bio-Rad in
2011 introduced the BRiCare
software applet, an application
designed for the highest level of
remote service and support,
including customer training for
both instruments and software.

With BRiCare, we can remotely
and rapidly troubleshoot and
solve problems and can pro-
actively identify developing
problems before they occur. This
not only allows for a much faster
response time, but also reduces
costs by not requiring Bio-Rad
engineers to be physically on site
in order to resolve an issue.

Bio-R ad
w ebsite

S oftw are a pplet
B Ric are

BIo-RaD’S StRonG anD LaStInG ReLatIonSHIPS wItH

ItS cuStomeRS HaVe tHeIR RootS In tHe comPany

PHILoSoPHy tHat VaLueS tHe PRIncIPLeS of

InVoLVement, InnoVatIon, anD InDePenDence.

tHeSe coRe VaLueS RefLect tHe way we

woRK anD wHo we aRe. tHey RePReSent ouR

commItment not juSt to eacH otHeR, But aLSo

to tHoSe wHom we SeRVe.

customer
Relationships

n uvia Q

Partnerships such as the one we have with
cnRS, are emblematic of how we approach our
shared responsibilities for helping to improve
scientific research and medical diagnostics—all
leading to better healthcare. It all leads to our
relationships with our customers: university and
research institutions, hospitals, public health
and commercial laboratories, other leading diag-
nostic manufacturers, and leading companies
in the biotechnology, pharmaceutical, chemical,
and food industries.

with all of these groups, we work closely with
researchers and clinicians to understand how
they conduct their research at a very deep level.
a good example of this is our customer immersion
process, in which Bio-Rad engineers travel to
a customer’s laboratory and observe how their
researchers work. this careful level of observa-
tion provides a way for our engineers to notice
details that the researchers themselves may
not think to mention as feedback to us. our
compact, user-friendly and fast-starting t100
thermal cycler is the result of this deeper
level of understanding of what our customers
wanted. Its design was based not only on customer
feedback, but on our observations of how it could
contribute to the success of those who use it.

to further help those customers, in 2011 we
introduced the bricare software applet.
In addition to enabling us to support and train
customers, the application allows us to monitor
and remotely diagnose the performance of their
instruments, thus eliminating the need for
customers to wait for an engineer to arrive
on site to get those instruments back up and
producing results.

another example of a project with strong
customer input is the bio-rad website. this
updated site continues to be heavily influenced
by what our customers tell us they need and
want: speed, efficiency, reliability, and, most
importantly, access to the information they
require. the result combines not only a unique
information carousel display on the home page
for immediate access to hot topics, but straight-
forward, intuitive navigation; accelerated and
efficient searching; in-depth resources; and
streamlined, information-rich product pages in
a variety of languages.

we even help our customers help their customers.
In august 2011, we introduced nuvia™ Q media,
an ultra-high capacity anion continued on page 14

Bio-Rad Laboratories Annual Report 2011

Innovation
& Product
Development

Built into our charter as one of our three core
values, innovation is the driver of Bio-rad’s growth
and success. we continuously strive to apply
new ideas, methods, and technology in creative
and useful ways, allowing us to offer a Broad
and diversified range of products with optimum
functionality, quality, efficiency, and value.

gile

P
r
o

elo

n
t

vis

o
r
y

cie

a
r
d

u
t
o

ell

a
t
e

n
t
e
r

exchange media that helps our customers purify
large volumes of therapeutic proteins used to
treat human diseases. this translates to lower
production costs for our customers who can then
pass along these cost savings to the consumer.

these products are examples of the kinds of
innovative products and services—exemplified
by the more than 1,000 patents the company
owns—that not only meet our customers’
needs, but exceed their expectations. whether it
is inventing a new, more efficient way to perform
a common process or improving the way an
instrument works, we are always looking to raise
the bar on what is possible.

take our new QX100™ droplet digital™ pcr
system, for example. this next-generation PcR
system offers a new level of precision in the
quantification of target nucleic acid molecules,
providing accurate determination of copy
number variation. It also enables the detection
of rare mutation events such as those seen in
certain tumors.

or take something even simpler: the need
for researchers to count cells—to maintain
populations in a tissue culture or to ensure
an accurate number of cells used in the
experiment. traditionally, most scientists

used a microscope and a device called a
hemocytometer, manually “clicking” a counter as
they counted cells in the hemocytometer grid.
with Bio-Rad’s tc10™ automated cell counter,
this process is completely automated, requiring
the scientist to do nothing more than inject a
sample onto a slide, insert it into the device, and
read the actual cell count of the sample.

further innovation comes from our involvement
with those outside the company. Bio-Rad’s
science advisory board, for example—com-
prising representatives from major research
and academic institutions—helps us brain-
storm ideas, offers feedback and evaluations
of new products, and provides insights on
emerging trends.

Similarly, our relationship with cnRS has
enabled us to jointly operate a research facility
in montpellier, france, giving us access to tech-
nologies that not only support our R&D activities
in the fields of biostatistics and proteomics, but
have led directly to the development of important
new products and processes.

In upholding our commitment to using industry
best practices, Bio-Rad employs the agile
product development design philosophy,
which enables software and hardware developers
to work with marketing in a continued on page 19

14 Bio-Rad Laboratories Annual Report 2011

igit

r
o

s
t
e

ple
t

with the compact yet powerful

QX100 droplet digital pcr

system, researchers can

study biological systems at

unprecedented resolution.

DETECTING RARE MUTATIONS:
DROPLET DIGITAL PCR

In PCR experiments, precision is
of paramount importance. It was
once believed that genes occurred
in pairs, with one gene from each
parental chromosome forming
that pair. But, later research, in
particular, the Human Genome
Project, revealed that there are in
fact many duplications and deletions
of sections of chromosomes within
the human population. These
duplications and deletions can
result in wide ranges of gene copy
number between individuals. Certain
numbers of genes may be doubled,
tripled, quadrupled, or more, and
therefore affect the type and amount
of a particular protein that results.

Accurate determination of copy
number variation has been made
much simpler by the use of
Bio-Rad’s QX100 Droplet Digital
PCR system as demonstrated by
the work of Dr. Michael Snyder of
Stanford University.

By taking advantage of droplet
digital PCR to understand the
arrangements that occur between
different genomes, he was able
to measure and validate copy
number variation that was only
previously revealed by other
more labor intensive—and less
precise—techniques.

Beyond the ability to accurately
determine copy number variation,
droplet digital PCR also offers the
ability to distinguish rare nucleic
acid sequences and the absolute
quantification of target DNA
molecules with unprecedented
precision and sensitivity.

Applications of these new
capabilities will accelerate the
development of new strategies
for both diagnosing and treating
inherited disorders, cancer, and
infectious diseases.

eVery droplet has an answer …

dna samples are prepared and

then loaded into the droplet

generator. later, the droplets

are amplified using a standard

thermal cycler.

Bio-Rad Laboratories Annual Report 2011

DIABETES: LEADING
THE WAY IN MONITORING
TREATMENT REGIMENS

In the United States, diabetes affects
more than 25 million; worldwide,
approximately 350 million suffer
from the disease. Proper monitoring,
treatment, and control allow many of
these individuals to lead otherwise
normal lives.

Part of that monitoring regimen is
the measurement of A1C, a subset
of a “glycosated” hemoglobin protein
that had been shown to have elevated
levels in diabetics, but was difficult
and expensive to test. Bio-Rad was
the first company to offer a test to the
U.S. market that could measure A1C,
a more precise indicator of average
blood glucose levels over time.

As the new test became established
as a useful clinical tool, test volumes
increased rapidly, and we introduced
a series of automated high-perfor-
mance liquid chromatography (HPLC)
platforms to further improve perfor-
mance and laboratory efficiency.

Today, Bio-Rad advancements con-
tinue to lead the way in monitoring
diabetes treatment regimens around
the world.

million
americans

350

million

worldwide

alit
tr

ols

ultip
le
tin
x

e
t
e

nit

rin

tHIS IS tHe ReaSon we come to woRK eacH Day:
an aBIDInG DeteRmInatIon to See tHat wHat
we Do tRuLy BenefItS tHe conSumeRS of ouR
effoRtS: ScIentIStS anD cLInIcIanS, to Be SuRe,
But moSt ImPoRtantLy, PatIentS aRounD tHe
woRLD. ouR PRoDuctS connect ReSeaRcHeRS
anD DIaGnoStIcIanS to tHe SoLutIonS tHat HeLP
PeoPLe LeaD LonGeR, HeaLtHIeR LIVeS.

Better
Healthcare

cross-functional approach. this process creates
higher-quality products that better meet the
needs of customers in a shorter period of time.

the outcome of all of these innovative new
approaches to developing products is evident in
the impact that they make on real human beings,
with real health issues. using Bio-Rad products,
scientists who make advances in cancer
research increase the survival rate for patients
suffering from this complex and highly variable
disease. other researchers, who are working to
identify specific disease biomarkers improve their
methods when using Bio-Rad products.

for physicians treating patients who live every
day with diseases such as diabetes in which
they must take an active and daily role in their
own therapy, Bio-Rad offers a series of market-
leading products. In the field of diabetes
monitoring, these instruments range from
our D-10™ and VaRIant™ line of automated
hemoglobin testing systems to the small, point-
of-care in2it™ analyzer, which can deliver results
from a patient’s sample within minutes in a
physician’s office.

Similarly, through the development of the
BioPlex® 2200 system, the only random access
multiplex testing instrument of its kind, there
is new hope for the millions of women and men

worldwide who suffer from illnesses caused by
autoimmune diseases. Because these diseases
affect multiple body systems and produce highly
divergent and often misleading symptoms,
accurate diagnosis is a challenge at best.
the BioPlex® 2200 ana Screen with medical
Decision Support Software (mDSS) is the most
comprehensive autoimmune product available,
allowing clinical laboratories and doctors
to provide patients with the most relevant
information for better diagnoses of systemic
autoimmune diseases, leading to faster, more
targeted treatment solutions, enabling patients
to live longer, healthier lives.

the most important measure of all of these
systems may be the profound confidence
that our customers have in them. our highly
regarded Quality controls and informatics
solutions offer advanced error detection,
delivering dependable values and results that
labs can rely on. this ensures that the most
reliable data goes back to the physician or
healthcare provider—and, most importantly, to
the patient. to further enhance quality, we offer
powerful software to monitor performance, so
labs can feel confident that their instruments
and reagents are working properly.

Bio-Rad Laboratories Annual Report 2011

Scientific
Progress

Diagnostics
Im prove m ents

Annual Report 2011
Bio-Rad Laboratories Annual Report 2011
Annual Report 2011
Annual Report 2011
Annual Report 2011
Annual Report 2011
Bio-Rad Laboratories
Bio-Rad Laboratories
Bio-Rad Laboratories
Bio-Rad Laboratories
Bio-Rad Laboratories

H ealthcare
a dvances

Breakthroughs
G enetic

(arriving in 2012)
the future

As we come to the end
of Bio-Rad’s 2011 journey,

we reflect on the many accomplishments we have achieved

throughout the year and take pride in how they contributed to raising

the level of healthcare throughout the world—even if only in the smallest

increments, as measured by the precision of our instruments.

one of the most important lessons we’ve taken away from our experiences

is that no matter where you start from, there are always new paths to

follow, new opportunities along the way, and new discoveries to make.

as long as you keep going forward, your real goal will always be met:

the continuous improvement of people’s health.

welcome to 2012.

the Business
of Bio-Rad

BIo-RaD LaBoRatoRIeS HaS PLayeD a LeaDInG

RoLe In tHe aDVancement of ScIentIfIc

DIScoVeRy foR 60 yeaRS By PRoVIDInG a

BRoaD RanGe of InnoVatIVe tooLS anD

SeRVIceS to tHe LIfe ScIence ReSeaRcH

anD cLInIcaL DIaGnoStIcS maRKetS.

founded in 1952, Bio-Rad has a global team of more than 7,000 employees and serves
more than 100,000 research and industry customers worldwide through its global network
of operations. throughout its existence, Bio-Rad has built strong customer relationships that
advance scientific research and development efforts and support the introduction of new
technology used in the growing fields of genomics, proteomics, drug discovery, food safety,
medical diagnostics, and more.

L I F E S C I E N C E S

C L I N I C A L D I A G N O S T I C S

Bio-Rad’s Life Science Group develops, manu-
factures, and markets a wide range of laboratory
instruments, apparatus, and consumables used
for research in functional genomics, proteomics,
and food safety. the group ranks among the
top five life science companies worldwide, and
maintains a solid reputation for quality, innova-
tion, and a longstanding focus on the success
of its customers. Bio-Rad’s life science products
are based on technologies used to separate,
purify, identify, analyze, and amplify biological
materials such as proteins, nucleic acids, and
bacteria. these technologies include elec-
trophoresis, imaging, multiplex immunoassay,
chromatography, microbiology, bioinformatics,
protein function analysis, transfection, amplifica-
tion, and real-time and droplet digital PcR.
Bio-Rad products support researchers in labo-

ratories throughout the world.

the clinical Diagnostics Group develops, manu-
factures, sells, and supports a large portfolio of
products for medical screening and diagnos-
tics. Bio-Rad is a leading specialty diagnostics
company and its products are recognized as
the gold standard for diabetes monitoring and
quality control (Qc) systems. the company
is also well known for its blood virus testing
and detection, blood typing, autoimmune and
genetic disorders testing, and internet-based
software products. Bio-Rad’s clinical diag-
nostics products incorporate a broad range
of technologies used to detect, identify, and
quantify substances in bodily fluids and tissues.
the results are used as aids to support medi-
cal diagnosis, detection, evaluation, and the
monitoring and treatment of diseases and other
medical conditions.

22 Bio-Rad Laboratories Annual Report 2011

2011 financial
Highlights

F I V E- Y E A R R E C O R D

(in millionS, exCePt for return on Sa leS
anD Pe r Share Data)

2007

2 008

2 009

2 010

2011

net Sales

Gross Profit

R&D expense

$ 1,461.1

$ 1,764.4

$ 1,784.2

$ 1,927.1

$ 2,073.5

$ 791.4

$ 962.5

$ 999.8

$ 1,091.5

$ 1,177.9

$ 140.5(1)

$ 159.5

$ 163.6

$ 172.3

$ 186.4

net Income attributable to Bio-Rad

93.0

89.5

$ 144.6

$ 185.5

$ 178.2

Return on Sales

6.4%

5.1%

8.1%

9.6%

8.6%

Book Value Per Share

$ 36.12

$ 38.11

$ 45.76

$ 55.17

$ 61.87

Basic earnings Per Share

3.48

3.30

5.28

6.70

6.36

cash flow from operations

$ 191.6

$ 191.4

$ 325.1

$ 225.9

$ 259.8

(1) exCluDeS $7.7 of PurChaSeD r& D in 2007

ale

gio

44%
europe

37%
americas

19%
Pacific
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07 08 09 10 11

$2.0 billion

$1.9 billion

$1.8 billion

$1.7 billion

$1.6 billion

$1.5 billion

$1.4 billion

$1.3 billion

$1.2 billion

$1.1 billion

$1.0 billion

$900 million

$800 million

$700 million

$600 million

$500 million

$400 million

$300 million

$200 million

$100 million

Bio-Rad
Sales History

1959

1965

1970

1975

1980

1985

1990

1995

2000

2005

2011

24 Bio-Rad Laboratories Annual Report 2011

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

(Mark One)

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

For the year ended December 31, 2011
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 1-7928

BIO-RAD LABORATORIES, INC.
(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

94-1381833
(I.R.S. Employer Identification No.)

1000 Alfred Nobel Drive, Hercules, California
(Address of principal executive offices)

94547
(Zip Code)

Registrant's telephone number, including area

(510) 724-7000
Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class
Class A Common Stock Par Value $0.0001 per share
Class B Common Stock Par Value $0.0001 per share

Name of Each Exchange on Which Registered
New York Stock Exchange
New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: NONE
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

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

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

Yes

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.

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
definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer
Non-accelerated file

(Do not check if a smaller reporting company)

Accelerated filer
Smaller reporting company

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes

As of June 30, 2011, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the
Registrant's Class A Common Stock held by non-affiliates was approximately $2,733,758,179 and the aggregate market value of the registrant's
Class B Common Stock held by non-affiliates was approximately $608,003,753.

As of February 14, 2012, there were 23,043,332 shares of Class A Common Stock and 5,156,587 of Class B Common Stock outstanding.

Documents Incorporated by Reference

Document

(1)

Definitive Proxy Statement to be mailed to stockholders in connection with the
registrant's 2012 Annual Meeting of Stockholders (specified portions)

Form 10-K Parts

III

BIO-RAD LABORATORIES, INC.

FORM 10-K DECEMBER 31, 2011

TABLE OF CONTENTS

Part I.

Item 1. Business

Item 1A. Risk Factors

Item 1B. Unresolved Staff Comments

Item 2. Properties

Item 3. Legal Proceedings

Item 4. Mine Safety Disclosures

Part II.

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities

Item 6. Selected Financial Data

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Item 8. Financial Statements and Supplementary Data

Item 9. Changes and Disagreements with Accountants on Accounting and Financial Disclosure

Item 9A. Controls and Procedures

Item 9B. Other Information

Part III.

Item 10. Directors, Executive Officers and Corporate Governance

Item 11. Executive Compensation

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters

Item 13. Certain Relationships and Related Transactions, and Director Independence

Item 14. Principal Accountant Fees and Services

Part IV.

Item 15. Exhibits and Financial Statement Schedules

Signatures

PART I.

ITEM 1. BUSINESS

General

Founded in 1952 and incorporated in 1957, Bio-Rad Laboratories, Inc. (referred to in this report as “Bio-Rad,”
“we,” “us,” and “our”) was initially engaged in the development and production of specialty chemicals used in
biochemical, pharmaceutical and other life science research applications. We entered the field of clinical
diagnostics with the development of our first test kit based on separation techniques and materials developed for life
science research. Through internal research and development efforts and acquisitions we have expanded into
various markets. Today, Bio-Rad manufactures and supplies the life science research, healthcare, analytical
chemistry and other markets with a broad range of products and systems used to separate complex chemical and
biological materials and to identify, analyze and purify their components.

As we broadened our product lines, we also expanded our geographical market. We have direct distribution
channels in over 35 countries outside the United States through subsidiaries whose focus is sales, customer service
and product distribution. In some regions, sales efforts are supplemented by distributors and agents.

Description of Business

Business Segments

Today, Bio-Rad operates in two industry segments designated as Life Science and Clinical Diagnostics. Both
segments operate worldwide. Our Life Science segment and our Clinical Diagnostics segment generated 33% and
66%, respectively, of our net sales for the year ended December 31, 2011. We generated approximately 30% of our
consolidated net sales for the year ended December 31, 2011 from U.S. sales and approximately 70% from sales in
our remaining worldwide markets.

For a description of business and financial information on industry and geographic segments, see Note 13 on pages
63 through 65 of Item 8 of Part II of this report.

Life Science Segment

Our Life Science segment is at the forefront of discovery, creating advanced tools to answer complex biological
questions. We are a market leader in the life sciences market, developing, manufacturing and marketing a range of
more than 5,000 reagents, apparatus and laboratory instruments that serve a global customer base. Many of our
products are used in established research techniques, biopharmaceutical production processes and food testing
regimes. These techniques are typically used to separate, purify and identify biological materials such as proteins,
nucleic acids and bacteria within a laboratory or production setting. We focus on selected segments of the life
sciences market in proteomics (the study of proteins), genomics (the study of genes), biopharmaceutical production,
cell biology and food safety. Based on the most recent studies, we estimate that the worldwide market for products
in these selected segments was approximately $6 billion. Our principal life science customers include universities
and medical schools, industrial research organizations, government agencies, pharmaceutical manufacturers,
biotechnology researchers, food producers and food testing laboratories.

Clinical Diagnostics Segment

Our Clinical Diagnostics segment designs, manufactures, sells and supports test systems, informatics systems, test
kits and specialized quality controls that serve clinical laboratories in the global diagnostics market. Our products
currently address specific niches within the in vitro diagnostics (IVD) test market, and we focus on the higher
margin, higher growth segments of this market.

We supply more than 3,000 different products that cover more than 300 clinical diagnostic tests to the IVD test
market. Based on the most recent studies, we estimate that the worldwide sales for products in the markets we
serve were approximately $10.0 billion. IVD tests are conducted outside the human body and are used to identify
and measure substances in a patient’s tissue, blood or urine. Our products consist of reagents, instruments and
software, typically provided to our customers as an integrated package to allow them to generate reproducible test
results. Revenue in this business is highly recurring, as laboratories typically standardize test methodologies, which
are dependent on a particular supplier’s equipment, reagents and consumable products. An installed base of
diagnostic test systems creates an ongoing source of revenue through the sale of test kits for each sample analyzed
on an installed system. Our principal clinical diagnostic customers include hospital laboratories, reference
laboratories, transfusion laboratories and physician office laboratories.

Raw Materials and Components

We utilize a wide variety of chemicals, biological materials, electronic components, machined metal parts, optical
parts, minicomputers and peripheral devices. Most of these materials and components are available from numerous
sources and we have not experienced difficulty in securing adequate supplies.

Patents and Trademarks

We own numerous U.S. and international patents and patent licenses. We believe, however, that our ability to
develop and manufacture our products depends primarily on our knowledge, technology and special skills. We pay
royalties on the sales of certain products under several patent license agreements. We view these patents and
license agreements as valuable assets.

Seasonal Operations and Backlog

Our business is not inherently seasonal. However, the European custom of concentrating vacation during the
summer months usually tempers third quarter sales volume and operating income.

For the most part, we operate in markets characterized by short lead times and the absence of significant backlogs.
Management has concluded that backlog information is not material to our business as a whole.

Sales and Marketing

We conduct our worldwide operations through an extensive direct sales force and service network, employing
approximately 1,000 sales and service people around the world. Our sales force typically consists of experienced
industry practitioners with scientific training, and we maintain a separate specialist sales force for each of our
segments. Our direct sales approach contrasts with the distributor approach used by some of our competitors,
allowing us to sell a broader range of our products and have more direct contact with our customers.

Our customer base is broad and diversified. Our worldwide customer base includes (1) prominent university and
research institutions, providing us access to more than 150,000 scientists in the U.S. alone; (2) hospital, public
health and commercial laboratories; (3) other leading diagnostic manufacturers; and (4) leading companies in the
biotechnology, pharmaceutical, chemical and food industries. In 2011, no single customer accounted for more than
two percent of our total net sales. Our sales are affected by certain external factors. For example, a number of our
customers, particularly in the Life Science segment, are substantially dependent on government grants and research
contracts for their funding. A significant reduction of government funding would have a detrimental effect on the
results of this segment.

Most of our international sales are generated by our wholly-owned subsidiaries and their branch offices. Certain of
these subsidiaries also have manufacturing facilities. Bio-Rad’s international operations are subject to certain risks
common to foreign operations in general, such as changes in governmental regulations, import restrictions and
foreign exchange fluctuations. However, our international operations are principally in developed nations, which
we regard as presenting no significantly greater risks to our operations than are present in the United States.

Competition

The markets served by our product groups are highly competitive. Our competitors range in size from start-ups to
large multinational corporations with significant resources and reach. Reliable independent information on sales
and market share of products produced by our competitors is not generally available. We believe, however, based on
our own estimates, no one company is so dominant that it prevents other companies, including Bio-Rad, from
competing effectively. We compete mainly in market segments where our products and technology offer customers
specific advantages over the competition.

Because of the breadth of its product lines, the Life Science segment does not face the same competitors for all of
its products. Competitors in this market include GE Biosciences, Life Technologies, Merck Millipore and Thermo
Fisher Scientific. We compete primarily based on meeting performance specifications.

Major competitors in the Clinical Diagnostics segment include Roche, Abbott Laboratories (Diagnostic Division),
Siemens Medical Diagnostics Solutions, Danaher, Thermo Fisher, Becton Dickinson, bioMérieux, Ortho Clinical
Diagnostics, Tosoh, Immucor and DiaSorin.

Research and Development

We conduct extensive research and development activities in all areas of our business, employing approximately
850 people worldwide in these activities. Research and development have played a major role in Bio-Rad's growth
and are expected to continue to do so in the future. Our research teams are continuously developing new products
and new applications for existing products. In our development of new products and applications, we interact with
scientific and medical professionals at universities, hospitals and medical schools, and within our industry. We spent
approximately $186.4 million, $172.3 million and $163.6 million on research and development activities during the
years ended December 31, 2011, 2010 and 2009, respectively.

Regulatory Matters

The manufacturing, marketing and labeling of certain of our products (primarily diagnostic products) are subject to
regulation in the United States by the Center for Devices and Radiological Health of the United States Food and
Drug Administration (FDA) and in other jurisdictions by state and foreign government authorities. FDA regulations
require that some new products have pre-marketing approval by the FDA and require certain products to be
manufactured in accordance with “good manufacturing practices,” to be extensively tested and to be properly
labeled to disclose test results and performance claims and limitations.

As a multinational manufacturer and distributor of sophisticated instrumentation, we must meet a wide array of
electromagnetic compatibility and safety compliance requirements to satisfy regulations in the United States, the
European Community and other jurisdictions.

Our operations are subject to federal, state, local and foreign environmental laws and regulations that govern such
activities as transportation of goods, emissions to air and discharges to water, as well as handling and disposal
practices for solid, hazardous and medical wastes. In addition to environmental laws that regulate our operations,
we are also subject to environmental laws and regulations that create liabilities and clean-up responsibility for
spills, disposals or other releases of hazardous substances into the environment as a result of our operations or
otherwise impacting real property that we own or operate. The environmental laws and regulations could also
subject us to claims by third parties for damages resulting from any spills, disposals or releases resulting from our
operations or at any of our properties.

These regulatory requirements vary widely among countries.

Employees

At December 31, 2011, Bio-Rad had approximately 7,030 full-time employees. Fewer than seven percent of Bio-
Rad's approximately 2,950 U.S. employees are covered by a collective bargaining agreement which will expire on
November 7, 2012. Many of Bio-Rad's non-U.S. full-time employees, especially in France, are covered by
collective bargaining agreements. We consider our employee relations in general to be good.

Available Information

Bio-Rad files annual, quarterly, and current reports, proxy statements, and other documents with the Securities and
Exchange Commission (SEC) under the Securities Exchange Act of 1934. The public may read and copy any
materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington, DC
20549. The public may obtain information on the operation of the Public Reference Room by calling the SEC at
1-800-SEC-0330. Also, the SEC maintains an Internet website that contains reports, proxy and information
statements, and other information regarding issuers, including Bio-Rad, that file electronically with the SEC. The
public can obtain any documents that we file with the SEC at http://www.sec.gov.

Bio-Rad’s website address is www.bio-rad.com. We make available, free of charge through our website, our Form
10-Ks, 10-Qs and 8-Ks, and any amendments to these forms, as soon as reasonably practicable after filing with the
SEC.

ITEM 1A. RISK FACTORS

The following risk factors should be read carefully in connection with evaluating our business and the forward-
looking information contained in this Annual Report on Form 10-K. We believe that any of the following risks
could have a material affect on our business, operations, industry, financial position or our future financial
performance. While we believe that we have identified and discussed below the key risk factors affecting our
business, there may be additional risks and uncertainties that are not presently known or that are not currently
believed to be significant that may adversely affect our business, operations, industry, financial position and
financial performance in the future.

The ongoing investigation by our Audit Committee and by government agencies of possible violations by us of
the United States Foreign Corrupt Practices Act and similar laws could have a material adverse effect on our
business.

Based on an internal review, we have identified conduct in certain of our overseas operations that may have violated
the anti-bribery provisions of the United States Foreign Corrupt Practices Act (FCPA) and is likely to have violated
the FCPA’s books and records and internal controls provisions and our own internal policies. In May 2010, we
voluntarily disclosed these matters to the U.S. Department of Justice (DOJ) and the Securities and Exchange
Commission (SEC), each of which commenced an investigation. The Audit Committee of our Board of Directors
(Audit Committee) has assumed direct responsibility for reviewing these matters and has hired experienced
independent counsel to conduct an investigation and provide legal advice. We have provided, and intend to
continue to provide, additional information to the DOJ and the SEC as the Audit Committee’s investigation
progresses.

The Audit Committee’s investigation and the DOJ and SEC investigations are continuing and we are presently
unable to predict the duration, scope or results of the Audit Committee’s investigation, of the investigations by the
DOJ or the SEC or whether either agency will commence any legal actions. The DOJ and the SEC have a broad
range of civil and criminal sanctions under the FCPA and other laws and regulations including, but not limited to,
injunctive relief, disgorgement, fines, penalties, modifications to business practices including the termination or
modification of existing business relationships, the imposition of compliance programs and the retention of a
monitor to oversee compliance with the FCPA. We are unable to estimate the outcome of this matter. However, the
imposition of any of these sanctions or remedial measures could have a material adverse effect on our business,

including our results of operations, cash balance and credit rates. We have not to date determined whether any of the
activities in question violated the laws of the foreign jurisdictions in which they took place.

We previously identified significant deficiencies in our internal control over financial reporting that, when
considered and taken together, had constituted a material weakness in our internal control over financial
reporting. Although we have remediated those significant deficiencies to the extent that they no longer, when
considered and taken together, constitute a material weakness in internal control over financial reporting, some
remain significant deficiencies and we have identified other significant deficiencies in internal control over
financial reporting. Any failure to maintain effective internal control over financial reporting could result in
our failure to meet our reporting obligations and cause investors to lose confidence in our reported financial
information, which in turn could cause the trading price of our common stock to decline.

In connection with our Audit Committee’s investigation of our compliance with the FCPA discussed above, our
management had identified three significant deficiencies in our internal control over financial reporting that, when
considered and taken together, had constituted a material weakness in our internal control over financial reporting
as of December 31, 2010 and through the first three quarters of 2011. A significant deficiency is defined as a
deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a
material weakness, yet important enough to merit attention by those responsible for oversight of our financial
reporting. A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over
financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim
financial statements will not be prevented or detected on a timely basis.

The three significant deficiencies that we identified were the result of: (i) a number of entity-level control
deficiencies, including our lack of a comprehensive FCPA policy and training program; our lack of a formal,
effective disclosure committee to facilitate our compliance with Section 302 of the Sarbanes-Oxley Act of 2002;
inadequate policies regarding enterprise-wide risk assessment and management related to doing business in high-
risk, emerging markets; our failure to perform background checks on certain parties prior to entering into material
contracts with such parties; our lack of compliance with our existing Code of Business Ethics and Conduct in
certain countries; and ineffective disclosure of significant exceptions to compliance with company policies through
our quarterly management sub-certification process; (ii) a number of control deficiencies related to our expenditure
processes at certain of our international subsidiaries; and (iii) a number of control deficiencies related to our
revenue and accounts receivable process at certain of our international subsidiaries.

In response to, and following identification of the material weakness, management has enhanced the operation of a
number of existing controls related to Bio-Rad's internal control over financial reporting, including our previously
existing controls and processes for FCPA compliance, and implemented additional controls. We have determined
that these actions have remediated significant deficiencies that, when considered and taken together, constituted the
material weakness described above to the extent that a material weakness no longer exists. However, we continue
to have a significant deficiency related to our revenue process, and we have identified two additional significant
deficiencies with respect to (i) reagent rentals at certain of our international subsidiaries and (ii) multiple controls
for various business processes at a more limited number of minor international subsidiaries.

We cannot assure you that we will be able to remediate these significant deficiencies or that additional significant
deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the
future. Such significant deficiencies or material weaknesses could result in material misstatements in our financial
statements and cause us to fail to meet our reporting obligations, which in turn could cause the trading price of our
common stock to decline. Any such failure could also adversely affect the results of our periodic management
evaluations and annual auditor attestation reports regarding the effectiveness of our internal control over financial
reporting required by Section 404 of the Sarbanes-Oxley Act of 2002.

In the complaint, the plaintiff alleges that our directors breached their fiduciary duties by failing to ensure that we
had sufficient internal controls and systems for compliance with the FCPA. Purportedly seeking relief on our
behalf, the plaintiff seeks an award of unspecified compensatory and punitive damages, costs and expenses
(including attorneys’ fees), and a declaration that our directors have breached their fiduciary duties. We and the
individual defendants filed a demurrer requesting dismissal of the complaint in this case, as well as a motion to stay
this matter pending resolution of the above-referenced investigations by the DOJ and SEC. Following a hearing on
September 30, 2011, the court sustained our demurrer and dismissed the complaint, without prejudice, and granted
the plaintiff until February 29, 2012 to file an amended complaint. (The parties subsequently agreed to extend that
date to March 29, 2012, subject to court approval.) The court denied our motion to stay this matter because it
dismissed the complaint.

Adverse changes in general domestic and worldwide economic conditions and instability and disruption of credit
markets could adversely affect our operating results, financial condition or liquidity.

The continuing slow economic growth in developed nations may adversely affect our future results of operations.
Demand for our products and services could change more dramatically than in previous years based on activity,
funding, reimbursement constraints and support levels from government, universities, hospitals and private industry,
including diagnostic laboratories. The need for certain sovereign nations with large annual deficits to curtail
spending could lead to slower growth of, or even a decline in, our business. Although signs of limited recovery may
exist in some markets, there are continued concerns about systemic economic imbalance, the availability and cost of
credit, declining asset values and geopolitical issues that contribute to increased market volatility and uncertain
expectations for the global economy. These conditions, combined with greater volatility in business activity levels
and consumer confidence, high unemployment and volatile oil prices, contributed to unprecedented levels of
volatility in the capital markets in recent years. Continuing or recurring disruptions in the capital and credit markets
may adversely affect our business, results of operations, cash flows and financial condition.

As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely
affected by illiquid credit markets and wider credit spreads. Concern about the stability of the markets generally
and the strength of counterparties specifically has led many private sector investors to reduce and, in some cases,
cease to provide credit to governments, businesses and consumers. These factors have led to depressed spending by
some governments, businesses and consumers. Our customers and suppliers may experience cash flow concerns
and, as a result, customers may modify, delay or cancel plans to purchase our products and suppliers may increase
their prices, reduce their output or change terms of sales. Additionally, if customers’ or suppliers’ operating and
financial performance deteriorates, or if they are unable to make scheduled payments or obtain credit, customers
may not be able to pay, or may delay payment of, amounts owed to us. Sovereign nations either delaying payment
for goods and services or renegotiating their debts could impact our liquidity. The situation in these sovereign
nations is continuously developing and we have no greater knowledge of the situation other than what is being
reported in the media. As of December 31, 2011, we had accounts receivable, net of allowance for doubtful
accounts, in Spain, Italy, Greece and Portugal of $81.3 million.

Suppliers may restrict credit or impose less favorable payment terms. Any inability of current and/or potential
customers to pay us for our products or any demands by suppliers for accelerated payment terms may adversely
affect our earnings and cash flow. Additionally, strengthening of the U.S. dollar associated with the global financial
crisis may adversely affect the results of our international operations when those results are translated into U.S.
dollars.

Furthermore, the disruption in the credit markets could impede our access to capital, especially if we are unable to
maintain our current credit ratings. Should we have limited access to additional financing sources when needed, we
may decide to defer capital expenditures or seek other higher cost sources of liquidity, which may or may not be
available to us on acceptable terms. Continued turbulence in the U.S. and international markets and economies, and
prolonged declines in business and consumer spending may adversely affect our liquidity and financial condition,
and the liquidity and financial condition of our customers, including our ability to refinance maturing liabilities and
access the capital markets to meet liquidity needs.

We cannot assure you that we will be able to integrate acquired companies, products or technologies into our
company successfully, or we may not be able to realize the anticipated benefits from the acquisitions.

As part of our overall business strategy, we pursue acquisitions of and investments in complementary companies,
products and technologies. In order to be successful in these activities, we must, among other things:

assimilate the operations and personnel of acquired companies;
retain acquired business customers;

•
•
• minimize potential disruption to our ongoing business;
retain key technical and management personnel;
•
integrate acquired companies into our strategic and financial plans;
•
accurately assess the value of target companies, products and technologies;
•
comply with new regulatory requirements;
•
harmonize standards, controls, procedures and policies;
•
• minimize the impact to our relationships with our employees and customers; and
•

assess, document and remediate any deficiencies in disclosure controls and procedures and internal control
over financial reporting.

The benefits of any acquisition may prove to be less than anticipated and may not outweigh the costs reported in our
financial statements. Completing any potential future acquisition could cause significant diversion of our
management’s time and resources. If we acquire new companies, products or technologies, we may be required to
assume contingent liabilities or record impairment charges for goodwill and other intangible assets over time. We
cannot assure you that we will successfully overcome these risks or any other problems we encounter in connection
with any acquisitions, and any such acquisitions could adversely affect our business, financial position or operating
results.

The industries and market segments in which we operate are highly competitive, and we may not be able to
compete effectively with larger companies with greater financial resources than we have.

The life science and clinical diagnostics markets are each highly competitive. Some of our competitors have greater
financial resources than we do and are less leveraged than we are, making them better equipped to license
technologies and intellectual property from third parties or to fund research and development, manufacturing and
marketing efforts. Moreover, competitive and regulatory conditions in many markets in which we operate restrict
our ability to fully recover, through price increases, higher costs of acquired goods and services resulting from
inflation and other drivers of cost increases. Our competitors can be expected to continue to improve the design and
performance of their products and to introduce new products with competitive price and performance
characteristics. Maintaining these advantages will require us to continue to invest in research and development,
sales and marketing and customer service and support. We cannot assure you that we will have sufficient resources
to continue to make such investments or that we will be successful in maintaining such advantages.

We have significant international operations which subject us to various risks such as general economic and
market conditions in the countries in which we operate.

A significant portion of our sales are made outside of the United States. Our foreign subsidiaries generated 70% of
our net sales for the year ended December 31, 2011. Our international operations are subject to risks common to
foreign operations, such as general economic and market conditions in the countries in which we operate, changes
in governmental regulations, political instability, import restrictions, additional scrutiny over certain financial
instruments and currency exchange rate risks. We cannot assure you that shifts in currency exchange rates,
especially significant strengthening of the U.S. dollar compared to the Euro, will not have a material adverse effect
on our operating results and financial condition.

We are dependent on government funding and the capital spending programs of our customers, and the effect of
healthcare reform on government funding and our customers’ ability to purchase our products is uncertain.

Our customers include universities, clinical diagnostics laboratories, government agencies, hospitals and
pharmaceutical, biotechnology and chemical companies. The capital spending programs of these institutions and
companies have a significant effect on the demand for our products. Such programs are based on a wide variety of
factors, including the resources available to make such purchases, the availability of funding from grants by
governments or government agencies, the spending priorities among various types of equipment and the policies
regarding capital expenditures during industry downturns or recessionary periods. If government funding to our
customers were to decrease, or if our customers were to decrease or reallocate their budgets in a manner adverse to
us, our business, financial condition or results of operations could be materially adversely affected.

Healthcare reform and the growth of managed care organizations have been and continue to be significant factors in
the clinical diagnostics market. The trend towards managed care, together with healthcare reform of the delivery
system in the United States and efforts to reform in Europe, has resulted in increased pressure on healthcare
providers and other participants in the healthcare industry to reduce costs. Consolidation among healthcare
providers has resulted in fewer, more powerful groups, whose purchasing power gives them cost containment
leverage. These competitive forces place constraints on the levels of overall pricing, and thus could have a material
adverse effect on our profit margins for products we sell in clinical diagnostics markets. To the extent that the
healthcare industry seeks to address the need to contain costs by limiting the number of clinical tests being
performed, our results of operations could be materially and adversely affected. If these changes in the healthcare
markets in the United States and Europe continue, we could be forced to alter our approach in selling, marketing,
distributing and servicing our products.

Our failure to improve our product offerings and develop and introduce new products may negatively impact our
business.

Our future success depends on our ability to continue to improve our product offerings and develop and introduce
new product lines and extensions that integrate new technological advances. If we are unable to integrate
technological advances into our product offerings or to design, develop, manufacture and market new product lines
and extensions successfully and in a timely manner, our operating results will be adversely affected. We cannot
assure you that our product and process development efforts will be successful or that new products we introduce
will achieve market acceptance.

If we experience a disruption of our information technology systems, or if we fail to successfully implement,
manage and integrate our information technology and reporting systems, it could harm our business.

Our information technology (IT) systems are an integral part of our business, and a serious disruption of our IT
systems could have a material adverse effect on our business and results of operations. We depend on our IT
systems to process orders, manage inventory and collect accounts receivable. Our IT systems also allow us to
efficiently purchase products from our suppliers and ship products to our customers on a timely basis, maintain
cost-effective operations and provide customer service. We cannot assure you that our contingency plans will allow
us to operate at our current level of efficiency.

Our ability to implement our business plan in a rapidly evolving market requires effective planning, reporting and
analytical processes. We expect that we will need to continue to improve and further integrate our IT systems,
reporting systems and operating procedures by training and educating our employees with respect to these
improvements and integrations on an ongoing basis in order to effectively run our business. If we fail to
successfully manage and integrate our IT systems, reporting systems and operating procedures, it could adversely
affect our business or operating results.

Risks relating to intellectual property rights may negatively impact our business.

We rely on a combination of copyright, trade secret, patent and trademark laws and third-party nondisclosure
agreements to protect our intellectual property rights and products. However, we cannot assure you that our
intellectual property rights will not be challenged, invalidated, circumvented or rendered unenforceable, or that
meaningful protection or adequate remedies will be available to us. For instance, it may be possible for
unauthorized third parties to copy our intellectual property, to reverse engineer or obtain and use information that
we regard as proprietary, or to develop equivalent technologies independently. Additionally, third parties may assert
patent, copyright and other intellectual property rights to technologies that are important to us. If we are unable to
license or otherwise access protected technology used in our products, or if we lose our rights under any existing
licenses, we could be prohibited from manufacturing and marketing such products. We may find it necessary to
enforce our patents or other intellectual property rights or to defend ourselves against claimed infringement of the
rights of others through litigation, which could result in substantial costs to us and divert our resources. We also
could incur substantial costs to redesign our products, to defend any legal action taken against us or to pay damages
to an infringed party. The foregoing matters could adversely impact our business.

We are subject to substantial government regulation.

Some of our products (primarily diagnostic products), production processes and marketing are subject to federal,
state, local and foreign regulation, including the FDA and its foreign counterparts. We are also subject to
government regulation of the use and handling of a number of materials and controlled substances. Failure to
comply with present or future regulations could result in substantial liability to us, suspension or cessation of our
operations, restrictions on our ability to expand at our present locations or require us to make significant capital
expenditures or incur other significant expenses.

We are currently subject to environmental regulations and enforcement proceedings.

Our operations are subject to federal, state, local and foreign environmental laws and regulations that govern such
activities as transportation of goods, emissions to air and discharges to water, as well as handling and disposal
practices for solid, hazardous and medical wastes. In addition to environmental laws that regulate our operations,
we are also subject to environmental laws and regulations that create liability and clean-up responsibility for spills,
disposals or other releases of hazardous substances into the environment as a result of our operations or otherwise
impacting real property that we own or operate. The environmental laws and regulations also subject us to claims
by third parties for damages resulting from any spills, disposals or releases resulting from our operations or at any
of our properties.

We may in the future incur capital and operating costs to comply with currently existing laws and regulations, and
possible new statutory enactments, and these expenditures may be significant. We have incurred, and may in the
future incur, fines related to environmental matters and liability for costs or damages related to spills or other
releases of hazardous substances into the environment at sites where we have operated, or at off-site locations
where we have sent hazardous substances for disposal. We can provide no assurance, however, that such matters or
any future obligations to comply with environmental laws and regulations will not have a material impact on our
operations or financial condition.

Loss of key personnel could hurt our business.

Our products and services are highly technical in nature. In general, only highly qualified and trained scientists have
the necessary skills to develop and market our products and provide our services. In addition, some of our
manufacturing positions are highly technical. We face intense competition for these professionals from our
competitors, customers, marketing partners and other companies throughout our industry. We generally do not
enter into employment agreements requiring these employees to continue in our employment for any period of time.
Any failure on our part to hire, train and retain a sufficient number of qualified personnel could substantially
damage our business. Additionally, if we were to lose a sufficient number of our research and development

scientists and were unable to replace them or satisfy our needs for research and development through outsourcing, it
could adversely affect our business.

A significant majority of our voting stock is held by the Schwartz family, which could lead to conflicts of interest.

We have two classes of voting stock, Class A Common Stock and Class B Common Stock. With a few exceptions,
holders of Class A and Class B Common Stock vote as a single class. When voting as a single class, each share of
Class A Common Stock is entitled to one-tenth of a vote, while each share of Class B Common Stock has one vote.
In the election or removal of directors, the classes vote separately and the holders of Class A Common Stock are
entitled to elect 25% of the Board of Directors, with holders of Class B Common Stock electing the remaining
directors.

As of February 14, 2012, the Schwartz family collectively held approximately 16% of our Class A Common Stock
and 91% of our Class B Common Stock. As a result, the Schwartz family is able to elect a majority of the directors,
effect fundamental changes in our direction and control matters affecting us, including the allocation of business
opportunities that may be suitable for our company. In addition, this concentration of ownership and voting power
may have the effect of delaying or preventing a change in control of our company.

The Schwartz family may exercise its control over us according to interests that are different from other investors’
or debtors’ interests.

Natural disasters, terrorist attacks or acts of war may cause damage or disruption to us and our employees,
facilities, information systems, security systems, vendors and customers, which could significantly impact our net
sales, costs and expenses, and financial condition.

We have significant manufacturing and distribution facilities, particularly in the western United States, France and
Switzerland. In particular, the western United States has experienced a number of earthquakes, wildfires, floods,
landslides and other natural disasters in recent years. The occurrences could damage or destroy our facilities which
may result in interruptions to our business and losses that exceed our insurance coverage. Terrorist attacks, such as
those that occurred on September 11, 2001, have contributed to economic instability in the United States, and
further acts of terrorism, bioterrorism, violence or war could affect the markets in which we operate, our business
operations, our expectations and other forward-looking statements contained or incorporated in this document. Any
of these events could cause a decrease in our revenue, earnings and cash flows.

We may incur losses in future periods due to write-downs in the value of financial instruments.

We have positions in a variety of financial instruments including asset backed securities and other similar
instruments. Financial markets are quite volatile and the markets for these securities can be illiquid. The value of
these securities will continue to be impacted by external market factors including default rates, changes in the value
of the underlying property, such as residential or commercial real estate, rating agency actions, the prices at which
observable market transactions occur and the financial strength of various entities, such as financial guarantors who
provide insurance for the securities. Should we need to convert these positions to cash, we may not be able to sell
these instruments without significant losses due to current debtor financial conditions or other market
considerations.

We have substantial debt and have the ability to incur additional debt. The principal and interest payment
obligations of such debt may restrict our future operations and impair our ability to meet our obligations under
our notes.

As of December 31, 2011 we and our subsidiaries had approximately $732.5 million of outstanding indebtedness. In
addition, we are permitted to incur additional debt provided we comply with the limitation on the incurrence of
additional indebtedness and disqualified capital stock covenants contained in the indenture governing our 8.0%
Senior Subordinated Notes due 2016 (8.0% Notes).

The following chart shows certain important credit statistics.

Total debt
Bio-Rad’s stockholders’ equity
Debt to equity ratio

At December 31,
2011

(dollars in millions)
732.5
$
1,743.9
$
0.4

Our incurrence of substantial amounts of debt may have important consequences. For instance, it could:

• make it more difficult for us to satisfy our financial obligations, including those relating to our outstanding

•

•
•

notes;
require us to dedicate a substantial portion of our cash flow from operations to the payment of interest and
principal due under our debt, including our outstanding notes, which will reduce funds available for other
business purposes;
increase our vulnerability to general adverse economic and industry conditions;
limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we
operate;
place us at a competitive disadvantage compared with some of our competitors that have less debt; and
limit our ability to obtain additional financing required to fund working capital and capital expenditures and
for other general corporate purposes.

Our ability to satisfy our obligations and to reduce our total debt depends on our future operating performance and
on economic, financial, competitive and other factors, many of which are beyond our control. Our business may
not generate sufficient cash flow, and future financings may not be available to provide sufficient net proceeds, to
meet these obligations or to successfully execute our business strategy.

Our existing credit facility, the indenture governing our 8.0% Notes and the terms of our other debt instruments,
including agreements we may enter in the future, contain or will contain covenants imposing significant restrictions
on our business. These restrictions may affect our ability to operate our business and may limit our ability to take
advantage of potential business opportunities as they arise. These covenants place restrictions on our ability to,
among other things:

•
•
•
• make investments;
•
•
•
•

incur additional debt;
acquire other businesses or assets through merger or purchase;
create liens;

enter into transactions with affiliates;
sell assets;
in the case of some of our subsidiaries, guarantee debt; and
declare or pay dividends, redeem stock or make other distributions to stockholders.

Our existing credit facility also requires that we meet certain financial tests and maintain certain financial ratios,
including a maximum consolidated leverage ratio test, minimum consolidated interest coverage ratio test and a
minimum net worth test.

Our ability to comply with these covenants may be affected by events beyond our control, including prevailing
economic, financial and industry conditions. The breach of any of these restrictions could result in a default. An
event of default under our debt agreements would permit some of our lenders to declare all amounts borrowed from

them to be due and payable, together with accrued and unpaid interest. If we were unable to repay debt to our
senior secured lenders, these lenders could proceed against the collateral securing that debt. The collateral is
substantially all of our personal property assets, the assets of our domestic subsidiaries and 65% of the capital stock
of certain of our foreign subsidiaries. In addition, acceleration of our other indebtedness may cause us to be unable
to make interest payments on our outstanding notes and repay the principal amount of our outstanding notes or may
cause the future subsidiary guarantors, if any, to be unable to make payments under the guarantees.

ITEM 1B. UNRESOLVED STAFF COMMENTS
None.

ITEM 2. PROPERTIES

We own our corporate headquarters located in Hercules, California. The principal manufacturing and research
locations for each segment are as follows:

Segment

Location

Life Science

Clinical
Diagnostics

Richmond, California
Hercules, California
Pleasanton, California
Singapore
Shanghai, China

Hercules, California
Benicia, California
Irvine, California
Greater Seattle area, Washington
Plano, Texas
Lille, France
Greater Paris area, France
Nazareth-Eke, Belgium
Cressier, Switzerland
Dreieich, Germany

Owned/Leased

Owned/Leased
Owned/Leased
Leased
Leased
Leased

Owned/Leased
Leased
Leased
Leased
Leased
Owned
Leased
Leased
Owned/Leased
Owned/Leased

Most manufacturing and research facilities also house administration, sales and distribution activities. In addition,
we lease office and warehouse facilities in a variety of locations around the world. The facilities are used
principally for sales, service, distribution and administration for both segments.

ITEM 3. LEGAL PROCEEDINGS

Commission (SEC), each of which commenced an investigation. The Audit Committee of our Board of Directors
(Audit Committee) has assumed direct responsibility for reviewing these matters and has hired experienced
independent counsel to conduct an investigation and provide legal advice. We have provided, and intend to
continue to provide, additional information to the DOJ and the SEC as the Audit Committee’s investigation
progresses.

On April 13, 2011, a shareholder derivative lawsuit was filed against each of our directors in the Superior Court for
Contra Costa County, California. The case, which also names the Company as a nominal defendant, is captioned
City of Riviera Beach General Employees’ Retirement System v. David Schwartz, et al., Case No. MSC11-00854.
In the complaint, the plaintiff alleges that our directors breached their fiduciary duties by failing to ensure that we
had sufficient internal controls and systems for compliance with the FCPA. Purportedly seeking relief on our
behalf, the plaintiff seeks an award of unspecified compensatory and punitive damages, costs and expenses
(including attorneys’ fees), and a declaration that our directors have breached their fiduciary duties. We and the
individual defendants filed a demurrer requesting dismissal of the complaint in this case, as well as a motion to stay
this matter pending resolution of the above-referenced investigations by the DOJ and SEC. Following a hearing on
September 30, 2011, the court sustained our demurrer and dismissed the complaint, without prejudice, and granted
the plaintiff until February 29, 2012 to file an amended complaint. (The parties subsequently agreed to extend that
date to March 29, 2012, subject to court approval.) The court denied our motion to stay this matter because it
dismissed the complaint.

In addition, we are party to various other claims, legal actions and complaints arising in the ordinary course of
business. We do not believe, at this time, that any ultimate liability resulting from any of these other matters will
have a material adverse effect on our results of operations, financial position or liquidity. However, we cannot give
any assurance regarding the ultimate outcome of these other matters and their resolution could be material to our
operating results for any particular period, depending on the level of income for the period.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II.

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Information Concerning Common Stock

Bio-Rad’s Class A and Class B Common Stock are listed on the New York Stock Exchange with the symbols BIO
and BIO.B, respectively. The following sets forth, for the periods indicated, the high and low intraday sales prices
for our Class A and Class B Common Stock.

2011
Fourth Quarter
Third Quarter
Second Quarter
First Quarter
2010
Fourth Quarter
Third Quarter
Second Quarter
First Quarter

Class A

Class B

High

Low

High

Low

103.22
122.39
126.98
120.18

105.60
93.36
113.68
104.44

87.98
84.02
115.77
104.30

89.02
80.00
85.57
89.82

102.90
122.21
126.56
121.02

104.57
92.72
112.94
103.14

89.20
87.33
116.67
104.89

89.82
83.82
87.25
90.00

On February 14, 2012, we had 546 holders of record of Class A Common Stock and 154 holders of record of Class
B Common Stock. Bio-Rad has never paid a cash dividend and has no present plans to pay cash dividends.

See Item 12 of Part III of this report for the security ownership of certain beneficial owners and management and
for securities authorized for issuance under equity compensation plans.

Stock Performance Graph

The following graph compares the cumulative stockholder returns over the past five years for our Class A Common
Stock, the S&P 400 MidCap Index and a selected peer group, assuming $100 invested on December 31, 2006, and
reinvestment of dividends if paid:

(1) The Peer Group consists of the following public companies: Danaher, Becton Dickinson, Thermo Fisher
Scientific, Meridian Bioscience, PerkinElmer and Life Technologies. Companies in our peer group reflect our
participation in two different markets: life science research products and clinical diagnostics. No single public or
private company has a comparable mix of products which serve the same markets. In many cases, only one division
of a peer group company competes in the same market as we do. Collectively, however, our peer group reflects
products and markets similar to those of Bio-Rad.

This stock performance graph shall not be deemed incorporated by reference by any general statement
incorporating by reference into any filing under the Securities Act or the Exchange Act, and shall not otherwise be
deemed filed under these Acts.

ITEM 6. SELECTED FINANCIAL DATA

BIO-RAD LABORATORIES, INC.

Selected Financial Data
(in thousands, except per share data)

Net sales

Cost of goods sold

Gross profit

Selling, general and administrative expense

Research and development expense

Purchased in-process research and
development expense

Impairment losses on goodwill and long-lived
assets

Interest expense
Foreign exchange losses, net

Other (income) expense, net
Income before income taxes and
noncontrolling interests

Provision for income taxes
Net loss (income) attributable to
noncontrolling interests

Net income attributable to Bio-Rad

Basic earnings per share

Diluted earnings per share

Cash dividends paid per common share

Total assets

Long-term debt, net of current maturities

2011

2010

Year Ended December 31,
2009

2008

2,073,529
895,640
1,177,889
696,294

186,439

1,927,118
835,630
1,091,488
635,213

172,266

1,784,244
784,401
999,843
601,468

163,585

1,764,365
801,843
962,522
591,304

159,518

2007 (1)

1,461,052
669,690
791,362
507,978

140,535

—

7,656

—
53,135
13,842
(7,583)

—
63,717
3,884
(3,875)

3,802
47,024
5,003
(6,871)

28,757
32,113
7,634
353

235,762

220,283

185,832

142,843

—
31,606
2,576
(19,832)

120,843

(57,739)

(33,348)

(36,667)

(44,579)

(26,548)

200

178,223

6.36

6.26

—

3,096,803

731,698

(1,445)

185,490

6.70

6.59

—

3,062,764

731,100

(4,545)

144,620

5.28

5.20

—

2,535,853

737,919

(8,754)

89,510

3.30

3.24

—

2,037,264

445,979

(1,301)

92,994

3.48

3.41

—

1,971,594

441,805

(1) Included in 2007 are the fourth quarter operating results of an acquisition. See Note 2 to the consolidated financial statements.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

This discussion should be read in conjunction with the information contained in our consolidated financial
statements and the accompanying notes which are an integral part of the statements.

Other than statements of historical fact, statements made in this Annual Report include forward looking statements,
such as statements with respect to our future financial performance, operating results, plans and objectives that
involve risk and uncertainties. Forward-looking statements generally can be identified by the use of forward-
looking terminology, such as “believe,” “expect,” “may,” “will,” “intend,” “estimate,” “continue,” or similar
expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which
could cause actual results to vary materially from those expressed in or indicated by the forward-looking
statements. We have based these forward looking statements on our current expectations and projections about
future events. However, actual results may differ materially from those currently anticipated depending on a variety
of risk factors including among other things: changes in general domestic and worldwide economic conditions; our
ability to successfully develop and market new products; our reliance on and access to necessary intellectual

property; our ability to successfully integrate any acquired business; our substantial leverage and ability to service
our debt; competition in and government regulation of the industries in which we operate; and the monetary policies
of various countries. We caution you not to place undue reliance on forward-looking statements, which reflect an
analysis only and speak only as of the date hereof. We undertake no obligation to publicly update or revise any
forward looking statements, whether as a result of new information, future events, or otherwise except as required
by Federal Securities law.

Overview. We are a multinational manufacturer and worldwide distributor of our own life science research and
clinical diagnostics products. Our business is organized into two primary segments, Life Science and Clinical
Diagnostics, with the mission to provide scientists with specialized tools needed for biological research and clinical
diagnostics.

We sell more than 8,000 products and services to a diverse client base comprised of scientific research, healthcare,
education and government customers worldwide. We manufacture and supply our customers with a range of
reagents, apparatus and equipment to separate complex chemical and biological materials and to identify, analyze
and purify components. Because our customers require standardization for their experiments and test results, much
of our revenues are recurring.

We are impacted by the support of many governments for both research and healthcare. The current global
economic outlook is becoming increasingly uncertain as the need to control government social spending by many
governments limits opportunities for growth. Approximately 30% of our 2011 consolidated net sales are derived
from the United States and approximately 70% are derived from international locations. The international sales are
largely denominated in local currencies such as Euros, Swiss Franc, Japanese Yen, Singapore Dollar and British
Sterling. As a result, our consolidated net sales expressed in dollars benefit when the U.S. dollar weakens and
suffer when the dollar strengthens. When the U.S. dollar strengthens, we benefit from lower cost of sales from our
own international manufacturing sites as well as non-U.S. suppliers and from lower international operating
expenses.

In October 2011, we acquired all the issued and outstanding stock of QuantaLife, Inc. (QuantaLife). The fair value
of the consideration as of the acquisition date was $179.4 million, which comprised of $150.3 million paid in cash
at the closing date, a $5.0 million holdback of cash until the completion of certain post-closing matters, and $24.1
million in contingent consideration potentially payable to QuantaLife shareholders. The contingent consideration
could reach $48 million upon the achievement of certain sales and development milestones. The pretax loss from
operations of QuantaLife was $7.0 million for the period from acquisition (October 4, 2011) through December 31,
2011. These results of operations of QuantaLife are included in the results of operations of our Life Science
segment. This transaction was accounted for as the acquisition of a business. Integrating the acquired QuantaLife
business into Bio-Rad is expected to expand our current state-of-the-art methods of quantitative Polymerase Chain
Reaction (PCR) and we believe it will complement Bio-Rad's existing amplification business.

The determination of the fair value of net assets acquired of QuantaLife was based upon valuation information,
estimates and assumptions available at October 4, 2011. We are still finalizing our analysis of a limited number of
acquired tax attributes which could affect the fair values of certain deferred tax assets and goodwill. As a result, as
of December 31, 2011, our accounting for the acquisition was preliminary.

In January 2012, we purchased certain assets from a current raw materials supplier for approximately $15.5 million.
The asset acquisition will be included in the Clinical Diagnostics segment's results of operations from the
acquisition date and will be accounted for as a business combination. We believe this acquisition will allow us to
secure the supply of critical raw materials and lower our overall costs in the Clinical Diagnostics segment.

The following shows cost of goods sold, gross profit, expense items and net income as a percentage of net sales:

Net sales
Cost of goods sold
Gross profit
Selling, general and administrative expense
Research and development expense
Net income attributable to Bio-Rad

2011

Year Ended December 31,
2010

2009

100.0%
43.2
56.8
33.6
9.0
8.6

100.0%
43.4
56.6
33.0
8.9
9.6

100.0%
44.0
56.0
33.7
9.2
8.1

We intend that the discussions of critical accounting policies and estimates and recent accounting pronouncements
that follow will assist you in understanding how such principles, estimates and accounting pronouncements affect
our financial condition and results of operations as well as significant factors that caused changes in our financial
condition and results of operations for the years ended December 31, 2011 and 2010.

Critical Accounting Policies and Estimates

The accompanying discussion and analysis of our financial condition and results of operations are based upon our
consolidated financial statements, which have been prepared in accordance with U.S. generally accepted accounting
principles (GAAP). The preparation of financial statements in conformity with GAAP requires management to
make estimates and assumptions that affect the reported amounts of assets, liabilities and contingencies as of the
date of the financial statements and reported amounts of revenues and expenses during the reporting periods. We
evaluate our estimates on an on-going basis. We base our estimates on historical experience and on other
assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.
However, future events may cause us to change our assumptions and estimates, which may require adjustment.
Actual results could differ from these estimates. We have determined that for the periods reported in this Annual
Report on Form 10-K the following accounting policies and estimates are critical in understanding our financial
condition and results of operations.

Accounting for Income Taxes. Management is required to make estimates related to our income tax provision in
each of the jurisdictions in which we operate. This process involves estimating our current tax exposure together
with assessing temporary differences resulting from differing treatment of items for tax and accounting purposes.
These differences result in deferred tax assets and liabilities, which are included within our Consolidated Balance
Sheets. Management then assesses the likelihood that the deferred tax assets will be recovered from future taxable
income and to the extent management believes that recovery is not likely, a valuation allowance must be
established. To the extent management establishes a valuation allowance or increases this allowance in a period, an
increase to expense within the Provision for income taxes in the Consolidated Statements of Income may result.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax
benefits recognized in the financial statements on a particular tax position are measured based on the largest benefit
that has a greater than 50% likelihood of being realized upon settlement. The amount of unrecognized tax benefits
is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to existing tax
law, new regulations or interpretations by the taxing authorities, new information obtained during a tax
examination, or resolution of an examination. We recognize both accrued interest and penalties, where appropriate,
related to unrecognized tax benefits in income tax expense.

Significant management judgment is required in determining the provision for income taxes, deferred tax assets and
liabilities, and any valuation allowance recorded in connection with the deferred tax assets. We have recorded a
valuation allowance of $48.9 million and $37.0 million as of December 31, 2011 and 2010, respectively, due to

uncertainties related to our ability to utilize some of the deferred tax assets, primarily consisting of certain foreign
net operating losses carried forward. The valuation allowance is based on management’s current estimates of
taxable income for the jurisdictions in which we operate and the period over which the deferred tax assets will be
recoverable. In the event that actual results differ from these estimates, or these estimates are adjusted in future
periods, an additional valuation allowance may need to be established, which would increase the tax provision,
lowering income and impacting our financial position. Should realization of these deferred tax assets for which a
valuation allowance has been provided occur, the provision for income taxes may decrease, raising income and
positively impacting Bio-Rad’s financial position.

Valuation of Goodwill and Long-lived Assets. Goodwill represents the excess of the cost over the fair value of net
tangible and identifiable intangible assets of acquired businesses. Goodwill amounts are assigned to reporting units
at the time of acquisition and are adjusted for any subsequent significant transfers of business between reporting
units. We assess the impairment of goodwill annually in the fourth quarter or whenever events or changes in
circumstances indicate that the carrying value may not be recoverable. We perform the impairment tests of
goodwill at our reporting unit level, which is one level below our reporting segments. The goodwill impairment test
consists of a two-step process. The first step of the goodwill impairment test, used to identify potential impairment,
compares the fair value of a reporting unit to its carrying value, including goodwill. If the fair value of the
reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the second
step of the impairment test is not required. The second step, if required, compares the implied fair value of the
reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated to
all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit had
been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire the
reporting unit. If the carrying amount of the reporting unit's goodwill exceeds its implied fair value, an impairment
charge is recognized in an amount equal to that excess.

We use a projected discounted cash flow model to determine the fair value of a reporting unit. This discounted cash
value method for determining goodwill may be different from the fair value that would result from an actual
transaction between a willing buyer and a willing seller. Projections such as discounted cash flow models are
inherently uncertain and accordingly, actual future cash flows may differ materially from projected cash flows.
Management judgment is required in developing the assumptions for the discounted cash flow model. These
assumptions include revenue growth rates, profit margins, future capital expenditures, working capital needs,
expected foreign currency rates, discount rates and terminal values. We estimate future cash flows using current
and longer-term high level financial forecasts. These forecasts take into account the current economic environment.
The discount rates used are compiled using independent sources, current trends in similar businesses and other
observable market data. Changes to these rates might result in material changes in the valuation and determination
of the recoverability of goodwill. For example, an increase in the discount rate used to discount cash flows will
decrease the computed fair value. In order to evaluate the sensitivity of the fair value calculations on the goodwill
impairment test, we apply a 10% decrease to the fair value of each reporting unit.

To validate the reasonableness of the reporting unit fair values, we reconcile the aggregate fair values of the
reporting units to the enterprise market capitalization including an implied control premium. In performing the
reconciliation we may, depending on the volatility of the market value of our stock price, use either the stock price
on the valuation date or the average stock price over a range of dates around the valuation date. We compare the
implied control premium to premiums paid in observable recent transactions of comparable companies to determine
if the accumulated fair values of all the reporting units are reasonable.

For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets are grouped with
other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash
flows of other assets and liabilities. We assess the impairment of long-lived assets (including identifiable
intangibles) whenever events or changes in circumstances indicate that the carrying value may not be recoverable.
Factors that we consider important that could trigger an impairment review include:

•
•

overall business;
a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of
before the end of its previously estimated useful life; and
significant negative industry, legal, regulatory or economic trends.

•

When management determines that the carrying value of long-lived assets may not be recoverable based upon the
existence of one or more of the above indicators of impairment, we test for any impairment based on a projected
undiscounted cash flow method. Projected future operating results and cash flows of the asset or asset group are
used to establish the fair value used in evaluating the carrying value of long-lived and intangible assets. We
estimate the future cash flows of the long-lived assets using current and long-term financial forecasts. The carrying
amount of a long-lived asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to
result from the use and eventual disposition of the asset. If this is the case, an impairment loss would be
recognized. The impairment loss recognized is the amount by which the carrying amount exceeds the fair value.

In 2009, our reviews indicated an impairment charge of $3.8 million related to the developed technology intangible
assets of certain product lines that were acquired in 2006. There were no impairment losses recorded in 2011 and
2010.

Valuation of Inventories. We value inventory at the lower of the actual cost to purchase and/or manufacture the
inventory, or the current estimated net realizable value of the inventory. We review inventory quantities on hand
and reduce the cost basis of excess and obsolete inventory based primarily on an estimated forecast of product
demand, production requirements and the quality, efficacy and potency of raw materials. This review is done on a
quarterly basis or, if warranted by the circumstances, more frequently. In addition, our industry is characterized by
technological change, frequent new product development and product obsolescence that could result in an increase
in the amount of obsolete inventory quantities on hand. Our estimates of future product demand may prove to be
inaccurate, and if too high, we may have overstated the carrying value of our inventory. In the future, if inventory is
determined to be overvalued, we would be required to write down the value of inventory to market and recognize
such costs in our cost of goods sold at the time of such determination. Therefore, although we make efforts to
ensure the accuracy of our forecasts of future product demand and perform procedures to safeguard overall
inventory quality, any significant unanticipated changes in demand, technological developments, regulations,
storage conditions, or other economic or environmental factors affecting biological materials, could have a
significant impact on the value of our inventory and reported results of operations.

Valuation of Investments. We regularly review our investments for factors that may indicate that a decline in the
fair value of an investment below its carrying value is other-than-temporary. Some factors considered in evaluating
whether or not a decline in fair value is other-than-temporary include our ability and intent to retain the investment
for a period of time sufficient to allow for a recovery in value, the duration and extent to which the fair value has
been less than cost and the financial condition and prospects of the issuer. Such reviews are inherently uncertain in
that the value of the investment may not fully recover or may decline further in future periods resulting in realized
losses.

Warranty Reserves. We warrant certain equipment against defects in design, materials and workmanship,
generally for a period of one year. Upon delivery and on acceptance of that equipment, we establish, as part of cost
of goods sold, a provision for the expected costs of such warranty repairs based on historical experience, specific
warranty terms and customer feedback. A review is performed on a quarterly basis to assess the adequacy of our
warranty reserve and it is adjusted if necessary. The warranty reserve is based on actual experience and expected
future costs to be incurred. Should realized costs be higher than expected costs, cost of goods sold would be lower
in the period of estimation and higher when realized.

Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for estimated losses resulting
from the collectability of our customer accounts. The amount of the allowance is determined by analyzing known
uncollectible accounts, the age of our receivables, economic conditions in the customers’ country or industry,
historical losses and our customers’ general credit-worthiness. Amounts later determined and specifically identified
to be uncollectible are charged or written off against this allowance. Uncertainty in the current economic

environment, if prolonged, could result in greater amounts becoming uncollectible in the future. Should the
estimates of losses be higher than the actual uncollectible accounts, we would report lower profitability when the
estimates are made and higher profitability when the receivable is collected.

Litigation Accruals. We record as liabilities in our Consolidated Balance Sheets estimated amounts for claims that
are probable and can be reasonably estimated. The likelihood of a material change in these estimated reserves is
dependent on the possible outcome of settlement negotiations, regulatory or judicial review and the development of
facts and circumstances in extended litigation which could change claims or assessments when both the amount and
range of loss on some outstanding litigation is uncertain. We disclose in the footnotes of the financial statements
when we are unable to make a reasonable estimate of a material liability that could result from unfavorable
outcomes in litigation. As events occur, we will assess the potential liability related to our pending litigation and
revise our estimates. Such revisions could materially impact our results of operations.

Results of Operations -- Sales, Gross Margins and Expenses

Net sales

Net sales (sales) in 2011 increased to $2.07 billion from $1.93 billion in 2010, a sales increase of 7.6%. Excluding
the impact of foreign currency, 2011 sales increased by approximately 3.1% compared to 2010. Currency neutral
sales growth was achieved in many regions, except for Europe.

The Life Science segment sales in 2011 were $694.7 million, an increase of 7.2% compared to 2010. On a currency
neutral basis, sales increased 3.4% compared to 2010. Product groups showing growth included process
chromatography media, imaging systems, amplification and electrophoresis. Currency neutral sales growth in the
Life Science segment was primarily in the U.S., Latin America and the Pacific Rim. In many developed countries,
constraints in government budgets have limited sales growth opportunities.

The Clinical Diagnostics segment sales in 2011 were $1.36 billion, an increase of 7.8% compared to 2010. On a
currency neutral basis, sales increased 2.9% compared to 2010. Clinical Diagnostics product lines generating
growth were immunohematology, quality controls, BioPlex 2200, diabetes monitoring and clinical microbiology.
Currency neutral sales growth was primarily in the Pacific Rim, partially offset by weaker sales in Europe due to
spending constraints in several countries' national healthcare systems.

Sales in 2010 increased 8.0% to $1.93 billion from $1.78 billion in 2009, with Biotest contributing approximately
$56.1 million to the growth in sales. Foreign currency had minimal impact on total sales growth. Excluding the
additional sales from the Biotest acquisition, 2010 sales grew by 4.8% on a currency neutral basis. Currency
neutral sales growth, excluding Biotest, was achieved in all regions, but was primarily driven by growth in the
Pacific Rim, Eastern Europe and Latin America.

The Life Science segment sales in 2010 were $648.1 million, an increase of 2.6%, or 2.2% on a currency neutral
basis, compared to 2009. Sales growth was primarily attributed to real-time PCR products and a new product line
TC 10™ automated cell counter, partially offset by general market weakness, especially in Europe. Currency neutral
sales growth in the Life Science segment was primarily in the Pacific Rim, Eastern Europe, Latin America and
North America, while European sales declined.

The Clinical Diagnostics segment reported sales in 2010 of $1.27 billion, an increase of 11.0% compared to 2009,
with Biotest contributing approximately 4.9% to the sales growth. On a currency neutral basis, sales in 2010
increased 11.3% including Biotest compared to 2009. Clinical Diagnostics realized growth in its quality controls
product line and in immunohematology (before the inclusion of Biotest), diabetes and BioPlex® 2200 instruments
and reagents. Sales growth was primarily in the Pacific Rim, Eastern Europe and Latin America, and to a lesser
extent North America.

Gross margin

Consolidated gross margins were 56.8% in 2011 compared to 56.6% in 2010 and were relatively unchanged for
both the Life Science segment and the Clinical Diagnostics segment.

Consolidated gross margins were 56.6% in 2010 compared to 56.0% in 2009. Life Science segment gross margins
in 2010 improved from 2009 by approximately 2.4%. The increase was primarily due to improved manufacturing
overhead absorption, reduction in costs and a favorable product mix toward higher margin products. Clinical
Diagnostics segment gross margins in 2010 decreased by approximately 0.4% from 2009. The Biotest acquisition
had a negative impact on Clinical Diagnostics segment gross margins due to higher inventory values resulting from
purchase accounting and overall lower margins than historically achieved by the segment. Partially offsetting this
decrease in gross margins was a favorable settlement of intellectual property disputes and lower royalty expenses.

Selling, general and administrative expense

Consolidated selling, general and administrative expenses (SG&A) represented 33.6% of sales in 2011 compared to
33.0% of sales in 2010. Growth in SG&A was greater than the rate of sales growth. Increases were primarily driven
by employee-related costs, our largest cost, professional services, bad debt provisions primarily associated with
public agencies in southern Europe, facilities, travel, information technology and marketing.

Consolidated SG&A represented 33.0% of sales in 2010 compared to 33.7% of sales in 2009. The growth rate in
absolute SG&A spending was less than the rate of sales growth. Moderation in spending for employee related costs
and third party commissions lowered the rate of SG&A spending to sales. Absolute dollar increases in SG&A were
primarily in employee-related costs, travel and related costs, and professional services.

Research and development expense

Research and development expense increased to $186.4 million or 9.0% of sales in 2011 compared to $172.3
million or 8.9% of sales in 2010. Life Science segment research and development expense increased in 2011 from
2010 in part due to the acquisition of QuantaLife in October 2011. Life Science segment efforts were concentrated
on genomics, proteomics and process chromatography applications. Clinical Diagnostics segment research and
development expense increased in 2011 from 2010 with efforts concentrated on diabetes and immunohematology,
and is focused mainly on the development and cost reduction of instruments.

Research and development expense was $172.3 million in 2010, or 8.9% of sales, compared to $163.6 million or
9.2% of sales in 2009. Both the Life Science and Clinical Diagnostics segments research and development expense
increased in absolute dollars, however as a percent of sales, Clinical Diagnostics segment expense decreased from
2009. Life Science segment efforts concentrated on genomics, proteomics process chromatography and food
diagnostics applications. The majority of the Clinical Diagnostics segment increase was related to an additional
emphasis in diabetes monitoring, clinical microbiology, expanded blood virus diagnostic tests and improved
automation.

Results of Operations – Non-operating

Interest expense

Interest expense in 2011 decreased 16.6% to $53.1 million compared to 2010 primarily due to the refinancing of a
portion of our debt in December 2010 through January 2011, lowering our overall borrowing rate. The interest rates
on our current borrowings for our $300.0 million of 8.0% Senior Subordinated Notes are fixed through 2016 at
8.0% and for our $425.0 million of 4.875% Senior Notes are fixed through 2020 at 4.875%.

Interest expense in 2010 increased 35.5% to $63.7 million compared to 2009. The increase in interest expense in
2010 from 2009 was primarily due to the payment of a call premium and the expensing of unamortized debt
issuance costs for the redemption of the $200.0 million of 6.125% Senior Subordinated Notes in December 2010,
23

and the interest associated with the $300.0 million of 8.0% Senior Subordinated Notes that were issued in May
2009. Our other principal debt obligation was the $225.0 million 7.5% Senior Subordinated Notes, which were
redeemed in January 2011.

Foreign currency exchange gains and losses

Foreign currency exchange gains and losses consist of foreign currency transaction gains and losses on
intercompany net receivables and payables and the change in fair value of our forward foreign exchange contracts
used to manage our foreign currency exchange risk. Net foreign currency exchange losses for 2011, 2010 and 2009
were $13.8 million, $3.9 million and $5.0 million, respectively. The 2011, 2010 and 2009 net foreign currency
exchange losses were attributable to market volatility, increasing costs to hedge and the result of the estimating
process inherent in the timing of shipments and payments of intercompany debt. In addition, approximately $4.6
million of the 2011 loss was attributable to entering into larger forward foreign exchange contracts than required.
All years are affected by the economic hedging program we employ to hedge our intercompany receivables and
payables.

Other income and expense, net

Other income and expense, net includes investment and dividend income, generally interest income on our cash and
cash equivalents, short-term investments and long term marketable securities. Other (income) expense, net for in
2011 increased to $7.6 million income compared to $3.9 million income in 2010. The increase was primarily due to
higher investment income, which included dividend income from holdings in Sartorius AG whose dividends almost
doubled from 2010, and a settlement of a legal dispute in the third quarter of 2010, partially offset by higher other-
than-temporary impairment losses on certain investments during 2011 than in 2010.

Other income, net in 2010 was $3.9 million compared to $6.9 million in 2009. The decrease primarily resulted
from non-recurring income of $4.6 million in 2009 related to the relief of a foreign non-income based tax
obligation, partially offset by higher other-than-temporary impairment of investments in 2009 than in 2010.

Effective tax rate

Our effective tax rate was 24% and 15% in 2011 and 2010, respectively. The effective tax rates for both periods
were lower than the U.S. statutory rate due to tax benefits for nontaxable dividend income, research and
development tax credits, differences between U.S. and foreign statutory tax rates, and discrete events recorded in
the period. The lower effective tax rate in 2010 was primarily due to a benefit of approximately $22.4 million that
related to U.S. foreign tax credits associated with a $163.9 million distribution of earnings from our foreign
affiliates to the U.S.

Our effective tax rate was 15% and 20% in 2010 and 2009, respectively. The effective tax rates in 2010 and 2009
both reflected tax benefits for nontaxable dividend income, research and development tax credits, and differences
between U.S. and foreign rates. The lower effective tax rate in 2010 was primarily due to a benefit of
approximately $22.4 million that related to U.S. foreign tax credits associated with a $163.9 million distribution of
earnings from our foreign affiliates to the U.S.

Our effective tax rate may be impacted in the future, either favorably or unfavorably, by many factors including, but
not limited to, changes to statutory tax rates, changes in tax laws or regulations, tax audits and settlements, and
generation of tax credits.

Liquidity and Capital Resources

Bio-Rad operates and conducts business globally, primarily through subsidiary companies established in the
markets in which we trade. Goods are manufactured in a small number of locations, and are then shipped to local
distribution facilities around the world. Our product mix is diversified, and certain products compete largely on
product efficacy, while others compete on price. Gross margins are generally sufficient to exceed normal operating
24

costs, and funding for research and development of new products, as well as routine outflows of capital expenditure,
interest and taxes. In addition to the annual positive cash flow from operating activities, additional liquidity is
readily available via the sale of short-term investments and access to our $200.0 million Amended and Restated
Credit Agreement (Credit Agreement) that we entered into in June 2010. Borrowings under the Credit Agreement
are on a revolving basis and can be used to make acquisitions, for working capital and for other general corporate
purposes. We had no outstanding borrowings under the Credit Agreement as of December 31, 2011. The Credit
Agreement expires on June 21, 2014.

The continuing slow economic growth in developed nations may adversely affect our future results of operations.
Demand for our products and services could change more dramatically than in previous years based on activity,
funding, reimbursement constraints and support levels from government, universities, hospitals and private industry,
including diagnostic laboratories. The need for certain sovereign nations with large annual deficits to curtail
spending could lead to slower growth of, or even a decline in our business. Sovereign nations either delaying
payment for goods and services or renegotiating their debts could impact our liquidity. The situation in these
sovereign nations is continuously developing and we have no greater knowledge of the situation other than what is
being reported in the media. As of December 31, 2011, we had accounts receivable, net of allowance for doubtful
accounts, in Spain, Italy, Greece and Portugal of $81.3 million.

At December 31, 2011, we had available $813.1 million in cash, cash equivalents and short-term investments.
Under domestic and international lines of credit, we had $220.5 million available for borrowing as of December 31,
2011, of which $12.6 million is reserved for standby letters of credit issued by our banks to guarantee our
obligations, mostly to meet the deductible amount under insurance policies for our benefit. Management believes
that this availability, together with cash flow from operations, will be adequate to meet our current objectives for
operations, research and development, capital additions for manufacturing and distribution, plant and equipment,
information technology systems and an acquisition of reasonable proportion to our existing total available capital.

The instability in credit markets along with inadequate capitalization in some parts of the financial services industry
could impact both our ability and our customer’s ability to access the necessary capital for acquisition, equipment
and technology modernization, and the financing of inventory and receivables. Without this crucial intermediary
function, manufacturers and end users may have to renegotiate existing arrangements, reduce activity levels or seek
other business partners.

Cash Flows from Operations

Net cash provided by operations was $259.8 million, $225.9 million and $325.1 million in 2011, 2010, and 2009,
respectively. The net increase between 2011 and 2010 of $33.9 million primarily represented higher cash received
from customers due to higher sales, a decline in interest expense due to the refinancing of a portion of our debt in
December 2010 and January 2011, and a decline in income taxes paid that was caused by timing differences, partially
offset by an increase in the amount paid to suppliers and employees. During the second quarter of 2010, Bio-Rad
made a large payment of 22.6 million Euros to a certain licensor, covering royalties for multiple years. We continue
to focus on cash flow improvements as a global company-wide goal.

The net decrease between 2010 and 2009 of $99.2 million primarily represented an increase in cash paid to suppliers,
including royalty payments covering multiple years and payments to settle intellectual property disputes, higher
payments on income taxes, and higher interest payments primarily from the call premium and the redemption of the
$200.0 million of 6.125% Senior Subordinated Notes in December 2010, and the interest associated with the $300.0
million of 8.0% Senior Subordinated Notes that were issued in May 2009. Partially offsetting this decrease was an
increase in cash received from customers compared to 2009. However, cash received from customers was at a slower
rate than expected in 2010 due to a slowdown in cash collections, as many governments, especially in Europe,
addressed the need for deficit reductions and sovereign borrowings.

We regularly review the allowance for uncollectible receivables and believe net accounts receivable are fully
realizable. We also routinely review inventory for the impact of obsolescence and changes in market prices caused by
the introduction of new products, technologies and in government reimbursement policies. We expect the first quarter
of 2012 cash flows from operations to be lower than the fourth quarter of 2011 as Bio-Rad historically makes larger
payments for royalties, fourth quarter sales commissions to third parties and annual employee bonuses during this
period.

Cash Flows from Investing Activities

Net cash used in investing activities, including capital expenditures, was $383.4 million, $216.5 million and $176.0
million for 2011, 2010 and 2009, respectively. Capital expenditures in 2011 totaled $102.9 million, compared to
$88.5 million and $68.0 million in 2010 and 2009, respectively. Capital expenditures represent the addition and
replacement of production machinery and research equipment, ongoing manufacturing and facility additions for
expansion, regulatory and environmental, and compliance. Also included in capital expenditures are investments in
business systems and data communication upgrades and enhancements. All periods include equipment placed with
Clinical Diagnostics segment customers who then contract to purchase our reagents for use. Capital expenditures
have increased and we anticipate them to continue to increase in future periods due to the implementation of a global
single instance Enterprise Resource Planning (ERP) platform and to expand our e-commerce platform internationally.
The ERP software was purchased in December 2010. The estimated global implementation cost for the single instance
ERP platform could reach approximately $150 million and is estimated to take approximately four more years to
implement.

In October 2011, we acquired all the issued and outstanding stock of QuantaLife for a total consideration of $179.4
million that was comprised of $150.3 million in cash, a $5.0 million holdback of cash until the completion of certain
post-closing matters, and contingent consideration potentially payable to QuantaLife shareholders. The contingent
consideration was recognized at its estimated fair value of $24.1 million and could reach $48 million upon the
achievement of certain sales and development milestones. This transaction was accounted for as the acquisition of a
business and the operating results of QuantaLife are included in our Life Science segment from the acquisition date.
Integrating the acquired QuantaLife business into Bio-Rad is expected to expand our current state-of-the-art methods
of quantitative PCR and we believe it will complement Bio-Rad's existing amplification business.

In January 2012, we purchased certain assets from a current raw materials supplier for approximately $15.5 million.
The asset acquisition will be included in the Clinical Diagnostics segment's results of operations from the acquisition
date and will be accounted for as a business combination. We believe this acquisition will allow us to secure the
supply of critical raw materials and lower our overall costs in the Clinical Diagnostics segment.

In June 2011, we acquired the remaining outstanding shares of DiaMed S.E.A. Limited (DiaMed Thailand) from
multiple noncontrolling shareholders for approximately $0.2 million in cash. In February 2011, we acquired an
additional 39% of Distribuidora de Analitica para Medicina Ibérica S.A. (DiaMed Spain) from multiple
noncontrolling shareholders, increasing our ownership in DiaMed Spain to 90% for approximately 2.5 million Euros,
or approximately $3.4 million in cash. In September 2010, we acquired the remaining noncontrolling interests of
DiaMed France SA for 10.2 million Euros, or approximately $12.9 million in cash. In January 2010, we acquired
certain diagnostic businesses of Biotest AG for 45 million Euros, or approximately $64.9 million in cash. In October
2007, we began acquiring the outstanding shares of DiaMed Holding AG, with the final shares purchased in February
2010 for a total consideration over the years of $464.3 million, of which 86% of the outstanding shares payment was
in October 2007. All of these acquisitions are included in our Clinical Diagnostics segment.

In January 2010, we acquired certain diagnostic businesses of Biotest AG (Biotest) for 45 million Euros
(approximately $64.9 million) in cash. The operating results of these businesses are included in our Clinical
Diagnostics segment.

We continue to review possible acquisitions to expand both our Life Science and Clinical Diagnostics segments. We
routinely meet with the principals or brokers of the subject companies. It is not certain that any of these discussions
will advance beyond the preliminary stages to completion at this time.

Cash Flows from Financing Activities

Net cash used in financing activities was $213.6 million in 2011, and net cash provided by financing activities was
$228.7 million and $293.9 million in 2010 and 2009, respectively. Cash used in 2011 was attributable to the
redemption in January 2011 of our $225.0 million 7.5% Senior Subordinated Notes, including a call premium of $2.8
million that was recorded in Interest expense in the Consolidated Statements of Income. Cash provided in 2010 was
primarily due to issuing $425.0 million Senior Notes that were used to retire our 2014 bonds and our 2013 bonds in
December 2010 and January 2011, respectively. Net cash provided by financing activities in 2009 was primarily due
to Bio-Rad issuing $300.0 million of 8.0% Senior Subordinated Notes in May 2009, which yielded net proceeds of
$294.8 million at an effective rate of 8.3%. We have outstanding Senior Notes of $425.0 million and Senior
Subordinated Notes of $300.0 million, which are not due until 2020 and 2016, respectively.

The Credit Agreement that was entered into in June 2010 is secured by substantially all of our personal property
assets, the assets of our domestic subsidiaries and 65% of the capital stock of certain foreign subsidiaries. It is
guaranteed by all of our existing and future material domestic subsidiaries and expires in June 2014.

The Board of Directors has authorized the repurchase of up to $18 million of Bio-Rad's common stock over an
indefinite period of time of which $3.3 million has yet to be repurchased. The Credit Agreement and the indenture
governing our 8.0% Senior Subordinated Notes restrict our ability to repurchase our stock. We did not repurchase any
shares of our common stock during 2011, 2010 or 2009.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have had or are reasonably likely to have a current or future
material effect on our financial condition, results of operations or liquidity.

Contractual Obligations

The following summarizes certain of our contractual obligations as of December 31, 2011 and the effect such
obligations are expected to have on our cash flows in future periods (in millions):

Contractual Obligations
Long-term debt, including
current portion (1)
Interest payments
Operating lease obligations (2)
Purchase obligations (3)
Long-term liabilities (4)

Payments Due by Period

Less
Than
One Year

Total

1-3
Years

3-5
Years

More
than
5 Years

732.3
298.5
148.4
73.0
67.3

0.6
44.7
34.9
72.0
—

0.4
89.4
48.6
1.0
28.4

296.6
82.4
26.3
—
1.7

434.7
82.0
38.6
—
37.2

(1) These amounts represent expected cash payments, including capital lease obligations and are included in our December 31, 2011
Consolidated Balance Sheets. See Note 5 of the Consolidated Financial Statements for additional information about our debt.

(2) Operating lease obligations are described in Note 11 of the Consolidated Financial Statements.

(3) Purchase obligations include agreements to purchase goods or services that are enforceable and legally binding to Bio-Rad and that specify
all significant terms. Purchase obligations exclude agreements that are cancelable without penalty.

(4) Excluded from this table is our liability for income tax payable, including uncertain tax positions, in the amount of $8.9 million. We are
not able to reasonably estimate the timing of future cash flows of these tax liabilities, therefore, our income tax obligations are excluded from
the table above. See Note 6 of the Consolidated Financial Statements for additional information about our income taxes.

Recent Accounting Standards Updates

In May 2011, the Financial Accounting Standards Board (FASB) issued guidance in regard to fair value measurement.
The new guidance results in a consistent definition of fair value and common requirements for measurement of and
disclosure about fair value between GAAP and International Financial Reporting Standards (IFRS). This guidance is
effective for interim and annual periods beginning after December 15, 2011. We do not anticipate that the adoption of
this guidance will have a material impact on our consolidated financial statements.

In June 2011, the FASB issued guidance in regard to the presentation of comprehensive income. In the new guidance
an entity has the option to present the total of comprehensive income, the components of net income, and the
components of other comprehensive income either in a single continuous statement of comprehensive income or in
two separate but consecutive statements. In December 2011, the FASB deferred the new requirement to present
components of reclassifications of other comprehensive income on the face of the income statement. This guidance is
effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Bio-Rad is
currently evaluating the alternative presentations; however, the adoption of this guidance will not have a material
impact on our consolidated financial statements as it relates to required disclosures and presentation only.

In September 2011, the FASB issued guidance in regard to goodwill impairment. The new guidance is intended to
reduce the cost and complexity of the annual goodwill impairment test by providing entities with the option of
performing a "qualitative" assessment to determine whether further impairment testing is necessary. An entity can
choose to perform the qualitative assessment on none, some, or all of its reporting units. Moreover, an entity can
bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the
impairment test, and then perform the qualitative assessment in any subsequent period. The new guidance is effective
for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. If
adopted, we do not expect this guidance to have a material impact on our consolidated financial statements.

ITEM 7A. QUANTITIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Financial Risk Management

The main goal of Bio-Rad’s financial risk management program is to reduce the variance in expected cash flows
arising from unexpected foreign exchange rate and interest rate changes. Financial exposures are managed through
operational means and by using various financial instruments, including cash and liquid resources, borrowings, and
forward and spot foreign exchange contracts. No derivative financial instruments are entered into for the purpose of
trading or speculation. Company policy requires that all derivative positions are undertaken to manage the risks
arising from underlying business activities. These derivative transactions do not qualify for hedge accounting
treatment per general standards for derivatives and hedging. Derivative instruments used in these transactions are
valued at fair value and changes in fair value are included in reported earnings.

Foreign Exchange Risk. We operate and conduct business in many countries and are exposed to movements in
foreign currency exchange rates. We face transactional currency exposures that arise when we enter into
transactions denominated in currencies other than U.S. dollars. Additionally, our consolidated net equity is
impacted by the conversion of the net assets of our international subsidiaries for which the functional currency is
not the U.S. dollar.

Foreign currency exposures are managed on a centralized basis. This allows for the netting of natural offsets and
lowers transaction costs and net exposures. Where possible, we seek to manage our foreign exchange risk in part
through operational means, including matching same-currency revenues to same currency costs, and same-currency
assets to same-currency liabilities. Moreover, weakening in one currency can often be offset by strengthening in
another currency. Foreign exchange risk is also managed through the use of forward foreign exchange contracts.
Positions are primarily in Euro, Swiss Franc, British Sterling, Singapore Dollar and Japanese Yen. The majority of
forward contracts are for periods of 90 days or less. We record the change in value of our foreign currency
receivables and payables as a Foreign exchange (gain) loss on our Consolidated Statements of Income along with
the change in fair market value of the forward exchange contract used as an economic hedge of those assets or
liabilities.

Our forward contract holdings at year-end were analyzed to determine their sensitivity to fluctuations in foreign
currency exchange rates. All other variables were held constant. Market risk associated with derivative holdings is
the potential change in fair value of derivative positions arising from an adverse movement in foreign exchange
rates. A decline of 10% on quoted foreign exchange rates would result in an approximate net-present-value loss of
$35 million on our derivative position as of December 31, 2011. This impact of a change in exchange rates
excludes the offset derived from the change in value of the underlying assets and liabilities, which could reduce the
adverse effect significantly.

Interest Rate Risk of Debt Instruments. Bio-Rad centrally manages the short-term cash surpluses and shortfalls of
its subsidiaries. Our holdings of variable rate debt instruments at year-end were analyzed to determine their
sensitivity to movements in interest rates. Due to the relatively small amount of short-term variable rate debt we
have outstanding, there would not be a material impact to earnings or cash flows if interest rates moved adversely
by 10%. Our long-term debt consists primarily of fixed-rate instruments, and is thus insulated from interest rate
changes. As of December 31, 2011, the overall interest rate risk associated with our debt was not significant.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Index to Consolidated Financial Statements

Report of Independent Registered Public Accounting Firm
Consolidated Balance Sheets at December 31, 2011 and 2010
Consolidated Statements of Income for each of the three years in the period ended

December 31, 2011

Consolidated Statements of Cash Flows for each of the three years in the period ended

December 31, 2011

Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income

for each of the three years in the period ended December 31, 2011

Notes to Consolidated Financial Statements

Page

31
32-33

36
37-66

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of Bio-Rad Laboratories, Inc.

We have audited the accompanying consolidated balance sheets of Bio-Rad Laboratories, Inc. as of December 31,
2011 and 2010, and the related consolidated statements of income, cash flows, and changes in stockholders' equity
and comprehensive income for each of the three years in the period ended December 31, 2011. Our audits also
included the financial statement schedule listed in the Index at Item 15(a)2. These financial statements and
schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these
financial statements and schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated
financial position of Bio-Rad Laboratories, Inc. at December 31, 2011 and 2010, and the consolidated results of its
operations and its cash flows for each of the three years in the period ended December 31, 2011 in conformity with
U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when
considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the
information set forth therein.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the effectiveness of Bio-Rad Laboratories, Inc.’s internal control over financial reporting as of
December 31, 2011, based on criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 29, 2012,
expressed an unqualified opinion thereon.

/s/ Ernst & Young LLP

Redwood City, California
February 29, 2012

BIO-RAD LABORATORIES, INC.
Consolidated Balance Sheets
(In thousands)

ASSETS
Current assets:

Cash and cash equivalents
Restricted cash
Short-term investments
Accounts receivable, less allowance for doubtful accounts of $33,259 at 2011 and

$25,052 at 2010

Inventories:

Raw materials
Work in process
Finished goods

Total inventories

Deferred tax assets
Prepaid expenses, taxes and other current assets

Total current assets

Property, plant and equipment:
Land and improvements
Buildings and leasehold improvements
Equipment
Total property, plant and equipment
Less: accumulated depreciation and amortization

Property, plant and equipment, net

Goodwill, net
Purchased intangibles, net
Long-term deferred tax assets
Other assets

Total assets

December 31,

2011

2010

574,231
—
238,884

906,551
6,422
118,636

398,674

387,996

99,326
120,191
213,993
433,510

82,270
110,527
205,303
398,100

53,777
99,079
1,798,155

48,021
109,620
1,975,346

19,044
249,615
613,253
881,912
(532,411)
349,501

18,456
232,959
560,718
812,133
(478,516)
333,617

468,933
259,497
11,189
209,528
3,096,803

363,981
203,881
12,976
172,963
3,062,764

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

BIO-RAD LABORATORIES, INC.
Consolidated Balance Sheets
(continued)
(In thousands, except share data)

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable
Accrued payroll and employee benefits
Notes payable and current maturities of long-term debt
Income and other taxes payable
Accrued royalties
Deferred revenue
Other current liabilities

Total current liabilities

Long-term debt, net of current maturities
Deferred income taxes
Other long-term liabilities
Total liabilities

Commitments and contingent liabilities

Stockholders’ equity:
Bio-Rad stockholders’ equity:

Preferred stock, $0.0001 par value, 7,500,000 shares authorized; issued and

outstanding - none

Class A common stock, $0.0001 par value, 80,000,000 shares authorized; issued and

outstanding - 23,020,215 at 2011 and 22,677,300 at 2010

Class B common stock, $0.0001 par value, 20,000,000 shares authorized; issued

and outstanding - 5,164,765 at 2011 and 5,175,343 at 2010

Additional paid-in capital
Retained earnings
Accumulated other comprehensive income:

Currency translation and other

Total Bio-Rad stockholders’ equity

Noncontrolling interests

Total stockholders’ equity
Total liabilities and stockholders’ equity

December 31,

2011

2010

129,124
112,564
814
52,285
25,219
24,322
114,787
459,115

113,440
131,381
233,181
50,935
23,944
20,642
93,104
666,627

731,698
85,522
76,086
1,352,421

731,100
59,738
64,780
1,522,245

—

1
185,334
1,359,910

198,690
1,743,937
445
1,744,382
3,096,803

—

1
156,986
1,181,687

198,020
1,536,696
3,823
1,540,519
3,062,764

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

BIO-RAD LABORATORIES, INC.
Consolidated Statements of Income
(In thousands, except per share data)

Net sales

Cost of goods sold

Gross profit

Selling, general and administrative expense
Research and development expense
Impairment loss on long-lived assets

Income from operations
Interest expense
Foreign exchange losses, net
Other (income) expense, net

Income before income taxes

Provision for income taxes

Net income including noncontrolling interests

Net loss (income) attributable to noncontrolling interests

Net income attributable to Bio-Rad

Basic earnings per share:

Net income per share basic attributable to Bio-Rad
Weighted average common shares - basic

Diluted earnings per share:

Net income per share diluted attributable to Bio-Rad
Weighted average common shares - diluted

Year Ended December 31,

2011

2010

2009

2,073,529
895,640
1,177,889
696,294
186,439
—
295,156
53,135
13,842
(7,583)
235,762
(57,739)
178,023
200
178,223

6.36
28,031

6.26
28,468

1,927,118
835,630
1,091,488
635,213
172,266
—
284,009
63,717
3,884
(3,875)
220,283
(33,348)
186,935
(1,445)
185,490

6.70
27,665

6.59
28,151

1,784,244
784,401
999,843
601,468
163,585
3,802
230,988
47,024
5,003
(6,871)
185,832
(36,667)
149,165
(4,545)
144,620

5.28
27,404

5.20
27,828

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

BIO-RAD LABORATORIES, INC.
Consolidated Statements of Cash Flows
(In thousands)

Cash flows from operating activities:
Cash received from customers
Cash paid to suppliers and employees
Interest paid
Income tax payments
Investment proceeds and miscellaneous receipts, net
Excess tax benefits from share-based compensation
Net cash provided by operating activities

Cash flows from investing activities:

Year Ended December 31,
2009

2010

2011

$ 2,018,755
(1,656,467)
(56,859)
(52,131)
9,686
(3,168)
259,816

$1,877,483
(1,536,935)
(59,834)
(55,502)
3,625
(2,928)
225,909

$ 1,778,316
(1,386,382)
(38,471)
(37,749)
10,024
(664)
325,074

Capital expenditures
Proceeds from sale of property, plant and equipment
Payments for acquisitions, net of cash received, and long-term
investments
Payments on purchases of intangible assets
Purchases of marketable securities and investments
Sales of marketable securities and investments
Maturities of marketable securities and investments
Proceeds from (payments for) foreign currency economic hedges, net
Restricted cash
Net cash used in investing activities

(102,888)
234

(88,453)
1,190

(68,044)
1,249

(158,538)
(436)
(509,310)
48,825
335,781
2,919
—
(383,413)

(89,307)
(4,081)
(240,286)
4,193
203,443
3,211
(6,422)
(216,512)

(35,990)
(9,566)
(147,554)
7,746
78,727
(2,520)
—
(175,952)

Cash flows from financing activities:

Net payments on line-of-credit arrangements and notes payable
Long-term borrowings
Payments on long-term borrowings
Proceeds from issuance of common stock
Debt issuance costs on long-term borrowings
Excess tax benefits from share-based compensation
Net cash (used in) provided by financing activities

Effect of foreign exchange rate changes on cash
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year

(3,900)
—
(226,835)
14,249
(242)
3,168
(213,560)
4,837
(332,320)
906,551
$ 574,231

(830)
424,633
(206,706)
12,730
(4,010)
2,928
228,745
18,471
256,613
649,938
$ 906,551

(2,303)
294,750
(6,823)
10,286
(2,641)
664
293,933
2,359
445,414
204,524
$ 649,938

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

BIO-RAD LABORATORIES, INC.
Consolidated Statements of Changes in Stockholders’ Equity and Comprehensive Income
(in thousands)

Common
Stock

Additional Paid-
in Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Income (Loss)

Total
Bio-Rad

Non-
controlling
Interests

Total

Balance at January 1, 2009
Net income
Currency translation adjustments
Other post-employment benefits
adjustments, net of tax benefit of $432
Net unrealized holding gains,
net of tax expense of $2,768
*Reclassification adjustments for
gains included in net income,
net of tax expense of $1,279
Total comprehensive income
Issuance of common stock
Stock compensation expense
Tax benefit-exercise stock options
Purchase of additional
controlling interests
Balance at December 31, 2009
Net income
Currency translation adjustments
Other post-employment benefits
adjustments, net of tax benefit of $750
Net unrealized holding gains,
net of tax expense of $8,574
*Reclassification adjustments for
gains included in net income,
net of tax expense of $224
Total comprehensive income
Issuance of common stock
Stock compensation expense
Tax benefit-exercise stock options
Purchase of additional controlling
interests and other
Balance at December 31, 2010
Net income (loss)
Currency translation adjustments
Reclassification of realized portion of
cumulative translation adjustments
due to liquidation, net of tax of $0
Other post-employment benefits
adjustments, net of tax expense of $486
Net unrealized holding gains,
net of tax expense of $7,494
*Reclassification adjustments for
losses included in net income,
net of tax benefit of $61
Total comprehensive income (loss)
Issuance of common stock
Stock compensation expense
Tax benefit-exercise stock options
Purchase of additional controlling
interests and other
Balance at December 31, 2011

3
—
—

—

—
—
—

—
3
—
—

—

—
—
—

—
3
—
—

—

—
—
—

—
3

$ 124,401
—
—

$ 851,577
144,620
—

65,158
—
34,307

$1,041,139
144,620
34,307

29,501
4,545
(195)

$1,070,640
149,165
34,112

—

10,286
9,084
696

(14,023)
130,444
—
—

—

12,730
10,201
3,161

450
156,986
—
—

—

14,249
10,738
3,582

—

—
—
—

(1,072)

224

(848)

32,492

—

32,492

2,197

—
—
—

2,197
212,544
10,286
9,084
696

—
4,574
—
—
—

2,197
217,118
10,286
9,084
696

—
996,197
185,490
—

—
133,082
—
52,139

(14,023)
1,259,726
185,490
52,139

(14,588)
19,487
1,445
226

(28,611)
1,279,213
186,935
52,365

—

—
—
—

(2,311)

(224)

(2,535)

14,725

—

14,725

385

—
—
—

385
250,428
12,730
10,201
3,161

—
1,447
—
—
—

385
251,875
12,730
10,201
3,161

—
1,181,687
178,223
—

—
198,020
—
(12,683)

450
1,536,696
178,223
(12,683)

(17,111)
3,823
(200)
189

(16,661)
1,540,519
178,023
(12,494)

—

—
—
—

(1,055)

1,641

12,871

(104)

—
—
—

(104)
178,893
14,249
10,738
3,582

—

—
(11)
—
—
—

(1,055)

1,641

12,871

(104)
178,882
14,249
10,738
3,582

(221)
$ 185,334

—
$1,359,910

—
$ 198,690

(221)
$1,743,937

(3,367)
445

(3,588)
$1,744,382

The accompanying notes are an integral part of these consolidated financial statements. * Calculated using the specific identification method.

BIO-RAD LABORATORIES, INC.
Notes to Consolidated Financial Statements

SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The consolidated financial statements include the accounts of Bio-Rad Laboratories, Inc. and all of our wholly and
majority owned subsidiaries (referred to in this report as “Bio-Rad,” “we,” “us” and “our”) after elimination of
intercompany balances and transactions. The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that affect the amounts
reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

We evaluate subsequent events and the evidence they provide about conditions existing at the date of the balance
sheet as well as conditions that arose after the balance sheet date but through the date the financial statements are
issued. The effects of conditions that existed at the balance sheet date are recognized in the financial statements.
Events and conditions arising after the balance sheet date but before the financial statements are issued are
evaluated to determine if disclosure is required to keep the financial statements from being misleading. To the
extent such events and conditions exist, disclosures are made regarding the nature of events and the estimated
financial effects for those events and conditions.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash and highly liquid investments with original maturities of three months or
less which are readily convertible into cash. Cash equivalents are stated at cost, which approximates fair value.

Restricted Cash

Restricted cash of approximately $6.4 million at December 31, 2010 represented a deposit in an escrow account for
the final lump sum payment under a building finance lease. That amount was paid in June 2011. There was no
restricted cash balance as of December 31, 2011.

Available-for-Sale Investments

Available-for-sale investments consist of corporate obligations, municipal securities, asset backed securities, U.S.
government sponsored agencies and marketable equity securities. Management classifies investments at the time of
purchase and reevaluates such classification at each balance sheet date. Investments with maturities beyond one
year may be classified as short-term based on their liquid nature and because such marketable securities represent
the investment of cash that is available for current operations. Available-for-sale investments are reported at fair
value based on quoted market prices and other observable market data. Unrealized gains and losses are reported as
a component of other comprehensive income, net of any related tax effect. Unrealized losses are charged against
income when a decline in the fair value of an individual security is determined to be other-than-temporary. We
review our available-for-sale investments for other-than-temporary losses on a quarterly basis. Realized gains and
losses and other-than-temporary impairments on investments are included in Other (income) expense, net (see Note
9).

Concentration of Credit Risk

Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash and cash
equivalents, investments, foreign exchange contracts and trade accounts receivable. Cash and cash equivalents and
investments are placed with various highly rated major financial institutions located in different geographic regions.
Bio-Rad has not sustained significant losses from instruments held at financial institutions.

The forward contracts used in managing our foreign currency exposures have an element of risk in that the
counterparties may be unable to meet the terms of the agreements. We attempt to minimize this risk by limiting the
counterparties to a diverse group of highly-rated domestic and international financial institutions. In the event of
non-performance by these counterparties, the carrying values of our financial instruments represent the maximum
amount of loss we would have incurred as of our fiscal year-end. However, we do not expect to record any losses
as a result of counterparty default.

We perform credit evaluation procedures related to our trade receivables and with the exception of certain
developing countries, generally do not require collateral. As a result of increased risk in certain developing
countries, some Bio-Rad sales are subject to collateral letters of credit from our customers. Credit risk for trade
accounts receivable is generally limited due to the large number of customers and their dispersion across many
geographic areas. However, a significant amount of trade receivables are with national healthcare systems in
countries within the European Union.

Accounts Receivable

We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to
make required payments. The amount of the allowance is determined by analyzing known uncollectible accounts,
aged receivables, economic conditions in the customers’ country or industry, historical losses and our customers’
credit-worthiness. Amounts later determined and specifically identified to be uncollectible are charged or written
off against this reserve.

Inventory

Inventories are valued at the lower of actual cost or market (net realizable value) and include material, labor and
overhead costs. The First-in, First-out (FIFO) method is used to remove inventory.

Property, Plant and Equipment

Property, plant and equipment are carried at cost, less accumulated depreciation and amortization. Included in
property, plant and equipment are buildings and equipment acquired under capital lease arrangements, reagent
rental equipment and capitalized software, including costs for software developed or obtained for internal use.
Property, plant and equipment are assessed for impairment quarterly or whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.

Depreciation is computed on a straight-line basis over the estimated useful lives of the assets. Buildings and
leasehold improvements are amortized over 15-30 years or the term of the leases or life of the improvements,
whichever is shorter. With the exception of reagent rental equipment, which is amortized over a 1-5 year period,
equipment is depreciated over 3-12 years.

Goodwill

Goodwill represents the excess of the cost over the fair value of net tangible and identifiable intangible assets of
acquired businesses. Goodwill is assessed for impairment by applying fair value based tests annually or whenever
events or changes in circumstances indicate that the carrying amount may not be recoverable. We perform
impairment tests of goodwill at our reporting unit level, which is one level below our reporting segments. Our
reporting units are identified as components for which discrete financial information is available and is regularly
reviewed by management. Goodwill amounts are assigned to reporting units at the time of acquisition.

The goodwill impairment test consists of a two-step process. The first step of the goodwill impairment test, used to
identify potential impairment, compares the fair value of a reporting unit to its carrying value, including goodwill.
We use a projected discounted cash flow model to determine the fair value of a reporting unit. If the fair value of
the reporting unit exceeds its carrying amount, goodwill of the reporting unit is considered not impaired, and the
second step of the impairment test is not required. The second step, if required, compares the implied fair value of

the reporting unit goodwill with the carrying amount of that goodwill. The fair value of a reporting unit is allocated
to all of the assets and liabilities of that unit (including any unrecognized intangible assets) as if the reporting unit
had been acquired in a business combination and the fair value of the reporting unit was the price paid to acquire
the reporting unit. If the carrying amount of the reporting unit’s goodwill exceeds its implied fair value, an
impairment charge is recognized in an amount equal to that excess.

Long-Lived Assets

For purposes of recognition and measurement of an impairment loss, a long-lived asset or assets are grouped with
other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash
flows of other assets and liabilities. We assess the impairment of long-lived assets (including identifiable intangible
assets) quarterly or whenever events or changes in circumstances indicate that the carrying value may not be
recoverable. Factors that we consider important that could trigger an impairment review include:

•
•

•

significant under-performance relative to expected, historical or projected future operating results;
significant changes in the manner of use of the long-lived assets, intangible assets or the strategy for our
overall business;
a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of at a
loss before the end of its previously estimated useful life; and
significant negative industry, legal, regulatory or economic trends.

Income Taxes

We account for income taxes under the asset and liability method, which requires the recognition of deferred tax
assets and liabilities for the expected future tax consequences of events that have been included in the financial
statements. Under this method, deferred tax assets and liabilities are determined based on the differences between
the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which
the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is
recognized in income in the period that includes the enactment date.

We record net deferred tax assets to the extent we believe these assets will more likely than not be realized. In
making such determination, we consider all available positive and negative evidence, including scheduled reversals
of deferred tax liabilities, projected future taxable income, tax planning strategies and recent financial operations.
To the extent we determine that we are able to realize our deferred income tax assets in the future in excess of their
net recorded amount, we make an adjustment to the valuation allowance which may reduce the provision for
income taxes.

We recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position
will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax
benefits recognized in the financial statements on a particular tax position are measured based on the largest benefit
that has a greater than a 50% likelihood of being realized upon settlement. The amount of unrecognized tax
benefits is adjusted as appropriate for changes in facts and circumstances, such as significant amendments to
existing tax law, new regulations or interpretations by the taxing authorities, new information obtained during a tax
examination, or resolution of an examination. We recognize both accrued interest and penalties, where appropriate,
related to unrecognized tax benefits in income tax expense.

Revenue Recognition

Revenue is recognized when pervasive evidence of an arrangement exists, the price to the buyer is fixed or
determinable, collectability is reasonably assured and title has passed to the customer or product has been delivered
absent specific contractual specifications. Revenue associated with equipment that requires factory installation is
not recorded until installation is complete and customer acceptance, if required contractually, has occurred. At the
time the related revenue is recognized, a provision is recognized for estimated product returns. Reagent agreements
are a diagnostic industry sales method that provides use of an instrument if the customer exclusively purchases the
company’s reagents to use on that instrument. We evaluate our reagent agreements and account for these contracts
under the guidance pertaining to accounting for revenue arrangements with multiple deliverables. All revenues that
we earn under our reagent agreements are recognized pursuant to the terms of each arrangement either when the
reagent has been delivered to or used by the customer. Service revenues on extended warranty contracts are
recognized ratably over the life of the service agreement, or as services are performed if not under contract.

Shipping and Handling

We classify all freight costs billed to customers as Net sales. Related freight costs are included in Cost of goods
sold.

Warranty

We warrant certain equipment against defects in design, materials and workmanship, generally for a period of one
year. Upon delivery of that equipment, we establish, as part of Cost of goods sold, a provision for the expected
costs of such warranty based on historical experience, specific warranty terms and customer feedback. A review is
performed on a quarterly basis to assess the adequacy of our warranty accrual.

Changes in the warranty accrual, included in Other current liabilities and Other long-term liabilities, were as
follows (in millions):

January 1

Provision for warranty
Actual warranty costs

December 31

Research and Development

2011

2010

18.3
21.1
(23.0)
16.4

16.1
19.7
(17.5)
18.3

Internal research and development costs are expensed as incurred. Third-party research and development costs are
expensed when the contracted work has been performed. Purchased in-process research and development costs
before January 1, 2010 were expensed at the time of purchase. Beginning January 1, 2010 under a new accounting
standard, purchased in-process research and development costs acquired in a business combination are capitalized
as an intangible asset.

Foreign Currency

Balance sheet accounts of international subsidiaries are translated at the current exchange rates as of the end of the
accounting period. Income statement items are translated at average exchange rates for the period. The resulting
translation adjustments are recorded as a separate component of stockholders’ equity.

Foreign currency transaction gains and losses are included in Foreign exchange losses, net in the Consolidated
Statements of Income. Transaction gains and losses result primarily from fluctuations in exchange rates when
intercompany receivables and payables are denominated in currencies other than the functional currency of our
subsidiary that recorded the transaction.

Forward Foreign Exchange Contracts

As part of distributing our products, we regularly enter into intercompany transactions. We enter into forward
foreign exchange contracts to manage foreign exchange risk of future movements in exchange rates that affect
foreign currency denominated intercompany receivables and payables. We do not use derivative financial
instruments for speculative or trading purposes, nor do we seek hedge accounting treatment for any of our contracts.
As a result, these contracts, generally with maturity dates of 90 days or less and related primarily to currencies of
industrial countries, are recorded as an asset or liability measured at their fair value at each balance sheet date. The
resulting gains or losses offset exchange gains or losses, on the related receivables and payables, all of which are
recorded as Foreign exchange losses, net in the Consolidated Statements of Income. The cash flows related to these
contracts are classified as Cash flows from investing activities in the Consolidated Statements of Cash Flows.

Noncontrolling Interests

A noncontrolling interest in a subsidiary is an ownership interest in a consolidated entity that is reported as equity in
the consolidated financial statements and separate from Bio-Rad’s equity. In addition, net income (loss) attributable
to noncontrolling interests is reported separately from net income attributable to Bio-Rad in the consolidated
financial statements.

We do not own 100% of the voting stock of one of our consolidated subsidiaries. The remaining shares held by
third parties represent a noncontrolling (or minority) interest in this subsidiary. Our consolidated statements present
the full amount of assets, liabilities, income and expenses of all of our consolidated subsidiaries, with a partially
offsetting amount shown in noncontrolling interests for the portion of these assets and liabilities that are not
controlled by us.

Share-Based Compensation Plans

Stock-based compensation expense for all share-based payment awards granted is determined based on the grant-
date fair value. We recognize these compensation costs net of estimated forfeitures over the requisite service period
of the award, which is generally the vesting term of the share-based payment awards. We estimated the forfeiture
rate based on our historical experience. These plans are described more fully in Note 8.

Earnings per Share

Basic earnings per share is computed by dividing net income (loss) attributable to Bio-Rad by the weighted average
number of common shares outstanding for that period. Diluted earnings per share takes into account the effect of
dilutive instruments, such as stock options and restricted stock, and uses the average share price for the period in
determining the number of potential common shares that are to be added to the weighted average number of shares
outstanding. Potential common shares are excluded from the diluted earnings per share calculation if the effect
would be anti-dilutive.

Unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents
(whether paid or unpaid) are participating securities and are included in the computation of earnings per share
(EPS) pursuant to the two-class method. As our unvested restricted shares qualify as participating securities, we
have included these shares in the computation of EPS.

The weighted average number of common shares outstanding used to calculate basic and diluted earnings per share
and the anti-dilutive shares are as follows (in thousands):

Basic weighted average shares outstanding
Effect of potentially dilutive stock options
and restricted stock awards
Diluted weighted average common shares
Anti-dilutive shares

Fair Value of Financial Instruments

Year Ended December 31,
2010

2009

2011

28,031

27,665

27,404

437
28,468
63

486
28,151
114

424
27,828
176

For certain financial instruments, including cash and cash equivalents, short-term investments, accounts receivable,
marketable securities, notes payable, accounts payable and foreign exchange contracts, the carrying amounts
approximate fair value.

The estimated fair value of financial instruments is based on the exchange price that would be received for an asset
or paid to transfer a liability (an exit price) using available market information or other appropriate valuation
methodologies in the principal or most advantageous market for the asset or liability in an orderly transaction
between market participants. Estimates are not necessarily indicative of the amounts that could be realized in a
current market exchange as considerable judgment is required in interpreting market data used to develop estimates
of fair value. The use of different market assumptions or estimation techniques could have a material effect on the
estimated fair value (see Note 3).

Recent Accounting Standards Updates

In May 2011, the Financial Accounting Standards Board (FASB) issued guidance in regard to fair value
measurement. The new guidance results in a consistent definition of fair value and common requirements for
measurement of and disclosure about fair value between GAAP and International Financial Reporting Standards
(IFRS). This guidance is effective for interim and annual periods beginning after December 15, 2011. We do not
anticipate that the adoption of this guidance will have a material impact on our consolidated financial statements.

In June 2011, the FASB issued guidance in regard to the presentation of comprehensive income. In the new
guidance an entity has the option to present the total of comprehensive income, the components of net income, and
the components of other comprehensive income either in a single continuous statement of comprehensive income or
in two separate but consecutive statements. In December 2011, the FASB deferred the new requirement to present
components of reclassifications of other comprehensive income on the face of the income statement. This guidance
is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011. Bio-Rad is
currently evaluating the alternative presentations; however, the adoption of this guidance will not have a material
impact on our consolidated financial statements as it relates to required disclosures and presentation only.

In September 2011, the FASB issued guidance in regard to goodwill impairment. The new guidance is intended to
reduce the cost and complexity of the annual goodwill impairment test by providing entities with the option of
performing a "qualitative" assessment to determine whether further impairment testing is necessary. An entity can
choose to perform the qualitative assessment on none, some, or all of its reporting units. Moreover, an entity can
bypass the qualitative assessment for any reporting unit in any period and proceed directly to step one of the
impairment test, and then perform the qualitative assessment in any subsequent period. The new guidance is
effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15,
2011. If adopted, we do not expect this guidance to have a material impact on our consolidated financial
statements.

ACQUISITIONS

On October 4, 2011, we acquired all of the issued and outstanding stock of QuantaLife, Inc. (QuantaLife). The fair
value of the consideration as of the acquisition date was $179.4 million, which comprised of $150.3 million paid in
cash at the closing date, a $5.0 million holdback of cash until the completion of certain post-closing matters, and
$24.1 million in contingent consideration potentially payable to QuantaLife shareholders. The contingent
consideration was recognized at its estimated fair value of $24.1 million, based on a probability-weighted income
approach, and could reach $48 million upon the achievement of certain sales and development milestones. The
contingent consideration for the development milestone was valued based on assumptions regarding the probability
of achieving the milestone, with such amounts discounted to present value. The contingent consideration for the
sales milestones were valued based on a statistical significant number of simulations for each potential outcome.
The operating results of this business are included in the results of operations of our Life Science segment from the
acquisition date. The acquisition was accounted for as a business combination. We do not consider the QuantaLife
acquisition to be a material business combination and, therefore, have not disclosed the pro forma results of
operations as required for material business combinations.

The fair values of the net assets acquired as of the acquisition date were determined to be $106.1 million of
goodwill, $94.7 million of intangible assets and $21.4 million of net tangible liabilities. We do not expect the
goodwill recorded to be deductible for tax purposes. Integrating the acquired QuantaLife business into Bio-Rad is
expected to expand our current state-of-the-art methods of quantitative Polymerase Chain Reaction (PCR) and we
believe it will complement Bio-Rad's existing amplification business.

In January 2010, we acquired certain diagnostic businesses of Biotest AG (Biotest) for 45 million Euros
(approximately $64.9 million) in cash. The acquisition was accounted for as a business combination. The
operating results of these businesses are included in our Clinical Diagnostics segment. We acquired $30.9 million
of net tangible assets, $12.8 million of goodwill and $21.2 million of intangible assets. The goodwill recorded will
not be deductible for tax purposes. Integrating the acquired portion of Biotest's diagnostic businesses into our
product portfolio broadened our product offering in the area of immunohematology and provided us access to the
U.S. markets with a range of products.

In October 2007, we began acquiring the outstanding shares of DiaMed Holding AG (DiaMed). DiaMed develops,
manufactures and markets worldwide a complete line of reagents used in blood typing and screening as well as
instruments and instrument systems that use its proprietary reagents, and is included in our Clinical Diagnostics
segment. The acquisition was performed in stages, with the final shares purchased in February 2010. Through
December 2008, we acquired $38.1 million of net tangible assets, $202.0 million of goodwill and $192.8 million of
intangible assets. The final two purchases were accounted for as equity transactions, which resulted in a net
reduction of Bio-Rad’s additional paid in capital of $14.9 million. The following table summarizes the purchase
activity related to DiaMed (in millions):

October 2007
March 2008
December 2008
April 2009
February 2010

Percent Voting
Interests

86%
3%
4%
6%
1%
100%

Consideration Paid
399.3
$
14.0
19.6
30.0
1.4
464.3

In June 2011, we acquired the remaining outstanding shares of DiaMed S.E.A. Limited (DiaMed Thailand) from
multiple noncontrolling shareholders for approximately $0.2 million in cash. As this acquisition was accounted for
as an equity transaction, Bio-Rad's noncontrolling interest was reduced by $1.0 million and additional paid-in-
capital was increased by $0.8 million.

In February 2011, we acquired an additional 39% of Distribuidora de Analitica para Medicina Ibérica S.A. (DiaMed
Spain) from multiple noncontrolling shareholders, increasing our ownership in DiaMed Spain to 90%. We paid
approximately 2.5 million Euros or $3.4 million in cash. This acquisition was accounted for as an equity
transaction, which reduced Bio-Rad’s noncontrolling interests and additional paid-in capital by approximately $2.4
million and $1.0 million, respectively.

In September 2010, we acquired the remaining noncontrolling interests of DiaMed France SA. We paid 10.2
million Euros (approximately $12.9 million) in cash. Approximately 1.3 million Euros (approximately $1.7
million) was paid in July 2011 as additional contingent consideration. As this acquisition was accounted for as an
equity transaction, Bio-Rad’s additional paid-in capital was increased by $1.2 million.

3. FAIR VALUE MEASUREMENTS

We determine the fair value of an asset or liability based on the assumptions that market participants would use in
pricing the asset or liability. The identification of market participant assumptions provides a basis for determining
what inputs are to be used for pricing each asset or liability. A fair value hierarchy has been established which gives
precedence to fair value measurements calculated using observable inputs over those using unobservable inputs.
This hierarchy prioritizes the inputs into three broad levels as follows:

• Level 1: Quoted prices in active markets for identical instruments
• Level 2: Other significant observable inputs (including quoted prices in active markets for similar

instruments)

• Level 3: Significant unobservable inputs (including assumptions in determining the fair value of certain

investments)

Financial assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2011 are
classified in the hierarchy as follows (in millions):

Financial Assets Carried at Fair Value:
Cash equivalents (a):
Commercial paper
Bonds
Time deposits
Money market funds

Total cash equivalents
Available-for-sale investments (b):

Corporate debt securities
Brokered certificates of deposit
U.S. government sponsored agencies
Foreign government obligations
Municipal obligations
Marketable equity securities
Asset-backed securities

Total available-for-sale investments

Forward foreign exchange contracts (c)

Total financial assets carried at fair value

Financial Liabilities Carried at Fair Value:
Forward foreign exchange contracts (d)
Contingent consideration (e)

Total financial liabilities carried at fair value

Level 1

Level 2

Level 3

Total

—
—
21.6
58.3
79.9

—
—
—
—
—
134.8
—
134.8
—
214.7

—
—
—

106.0
8.6
—
—
114.6

170.6
1.8
36.9
5.7
5.0
—
11.2
231.2
0.8
346.6

1.2
—
1.2

—
—
—
—
—

—
—
—
—
—
—
—
—
—
—

—
24.1
24.1

106.0
8.6
21.6
58.3
194.5

170.6
1.8
36.9
5.7
5.0
134.8
11.2
366.0
0.8
561.3

1.2
24.1
25.3

In addition to the assets and liabilities measured at fair value on a recurring basis, as included in the tables above,
during the fourth quarter of 2011 we recognized a contingent consideration liability upon our acquisition of
QuantaLife in October 2011 related to potential future payments due upon the achievement of certain sales and
development milestones. The contingent consideration was determined based on a probability-weighted income
approach. There was no significant change in the valuation of this liability from the acquisition date through
December 31, 2011.

Financial assets and liabilities carried at fair value and measured on a recurring basis as of December 31, 2010 are
classified in the hierarchy as follows (in millions):

Financial Assets Carried at Fair Value:
Cash equivalents (a):
Commercial paper
Time deposits
Money market funds

Total cash equivalents
Available-for-sale investments (b):

Corporate debt securities
U.S. government sponsored agencies
Foreign government obligations
Municipal obligations
Marketable equity securities
Asset-backed securities:

Collateralized mortgage obligations
Other mortgage-backed securities

Other

Total available-for-sale investments

Forward foreign exchange contracts (c)

Total financial assets carried at fair value

Financial Liabilities Carried at Fair Value:
Forward foreign exchange contracts (d)

Level 1

Level 2

Total

—
16.7
266.3
283.0

—
—
—
—
102.2

—
—
—
102.2
—
385.2

179.6
25.0
—
204.6

39.8
54.7
4.5
7.7
—

0.1
2.5
0.3
109.6
0.5
314.7

179.6
41.7
266.3
487.6

39.8
54.7
4.5
7.7
102.2

0.1
2.5
0.3
211.8
0.5
699.9

—

3.3

(a) Cash equivalents are included in Cash and cash equivalents in the Consolidated Balance Sheets.

(b) Available-for-sale investments are included in the following accounts in the Consolidated Balance Sheets

(in millions):

Short-term investments
Other assets
Total

December 31,
2011

December 31,
2010

238.8
127.2

366.0

118.6
93.2

211.8

current assets in the Consolidated Balance Sheets.

(d) Forward foreign exchange contracts in a liability position are included in Other current liabilities in the

Consolidated Balance Sheets.

(e) Contingent consideration liability is included in the following accounts in the Consolidated Balance Sheet

(in millions):

Other current liabilities
Other long-term liabilities
Total

December 31,
2011

8.5
15.6
24.1

To estimate the fair value of Level 2 debt securities as of December 31, 2011, our primary pricing service relies on
inputs from multiple industry-recognized pricing sources to determine the price for each investment. In addition,
they performed reasonableness testing of their prices on a daily basis by comparing them to the prices reported by
our custodians as well as prior day prices. If the price difference fell outside of tolerable levels, they investigated
the cause and resolved the pricing issue. Based on a review of the results of this analysis, we utilized our primary
pricing service for all Level 2 debt securities as none of these securities tested outside of the tolerable levels.

To estimate the fair value of Level 2 debt securities as of December 31, 2010, excluding commercial paper and U.S.
Treasury bills and notes, we examined quarterly the pricing provided by two pricing services and we obtained
indicative market prices when there was insufficient correlation between the pricing services. To estimate the fair
value of Level 2 commercial paper and U.S. Treasury bills and notes we examined quarterly the pricing from our
primary pricing service to ensure consistency with other similar securities. As a result of our analysis as of
December 31, 2010, we utilized our primary pricing service for all Level 2 debt securities for consistency since the
results did not require the use of alternative pricing.

As of December 31, 2011, our primary pricing service inputs for Level 2 cash equivalents (bonds), U.S. government
sponsored agencies, municipal obligations, corporate debt securities (bonds) and asset-backed securities consisted
of market prices from a variety of industry standard data providers, security master files from large financial
institutions and other third-party sources. These multiple market prices were used by our primary pricing service as
inputs into a distribution–curve based algorithm to determine the daily market value.

As of December 31, 2011, our primary pricing service inputs for Level 2 cash equivalents (commercial paper),
corporate debt securities (commercial paper), foreign government obligations (commercial paper) and time deposits
consisted of dynamic and static security characteristics information obtained from several independent security
characteristic sources. The dynamic inputs such as credit rating, factor and variable-rate, were updated daily. The
static characteristics included inputs such as day count and first coupon upon initial security creation. These
securities were typically priced via mathematical calculations reliant on these observable inputs. Other available-
for-sale foreign government obligations were based on indicative bids from market participants.

As of December 31, 2010, the inputs used by our primary pricing service for Level 2 cash equivalents, corporate
debt securities, foreign government obligations, U.S. government sponsored agencies and municipal obligations,
varied depending on the type of security being valued, but generally included benchmark yields, reported trades,
broker/dealer quotes, issuer spreads, two-sided markets, benchmark securities, bids, offers, reference data, corporate
actions or Nationally Recognized Municipal Securities Information Repository (NRMSIR) material event notices,
plus new issue money market rates.

As of December 31, 2010, the inputs used by our primary pricing service in estimating the fair value of Level 2
collateralized mortgage obligations and other mortgage-backed securities included many of the inputs mentioned
above in addition to monthly payment information. These issues were priced by our primary pricing service against
issues with similar vintage and credit quality with adjustments for tranche, average life and extension risk.

Forward foreign exchange contracts: As part of distributing our products, we regularly enter into intercompany
transactions. We enter into forward foreign currency exchange contracts to manage foreign exchange risk of future
movements in foreign exchange rates that affect foreign currency denominated intercompany receivables and
payables. We do not use derivative financial instruments for speculative or trading purposes. We do not seek hedge
accounting treatment for these contracts. As a result, these contracts, generally with maturity dates of 90 days or
less and related primarily to currencies of industrial countries, are recorded at their fair value at each balance sheet
date. The fair value of these contracts was derived using the spot rates published in the Wall Street Journal on the
last business day of the quarter and the points provided by counterparties. The resulting gains or losses offset
exchange gains or losses on the related receivables and payables, both of which are recorded as Foreign exchange
losses (gains), net in the Consolidated Statements of Income. The cash flows related to these contracts are classified
as Cash flows from investing activities in the Consolidated Statements of Cash Flows.

The following is a summary of our forward foreign currency exchange contracts (in millions):

Contracts maturing in January through March 2012 to sell foreign currency:

Notional value
Unrealized loss

Contracts maturing in January through March 2012 to purchase foreign currency:

Notional value
Unrealized loss

Available-for-sale investments consist of the following (in millions):

Short-term investments:

Corporate debt securities
Brokered certificates of deposit
Municipal obligations
Asset-backed securities
U.S. government sponsored agencies
Foreign government obligations
Marketable equity securities

Long-term investments:

Marketable equity securities
Asset-backed securities
Foreign government obligations

Total

December 31, 2011

Amortized
Cost

Unrealized
Gains

Unrealized
Losses

0.1
—
—
—
0.1
—
0.6
0.8

70.0
—
—
70.0
70.8

(0.4)
—
—
—
—
—
—
(0.4)

(0.7)
(0.1)
—
(0.8)
(1.2)

170.9
1.8
5.0
10.8
36.8
5.4
7.7
238.4

57.2
0.5
0.3
58.0
296.4

December 31,
2011

$
$

41.0
0.2

323.0
0.3

Estimated
Fair
Value

170.6
1.8
5.0
10.8
36.9
5.4
8.3
238.8

126.5
0.4
0.3
127.2
366.0

December 31, 2010

Amortized
Cost

Unrealized
Gains

Unrealized
Losses

Estimated
Fair
Value

Short-term investments:

Corporate debt securities
Municipal obligations
Asset-backed securities
U.S. government sponsored agencies
Foreign government obligations
Marketable equity securities

Long-term investments:

Marketable equity securities
Asset-backed securities

39.8
7.7
1.9
54.7
4.5
8.8
117.4

45.5
0.7
46.2

Total

163.6

—
—
—
—
—
1.3
1.3

47.9
0.1
48.0

49.3

—
—
—
—
—
(0.1)
(0.1)

(0.9)
(0.1)
(1.0)

39.8
7.7
1.9
54.7
4.5
10.0
118.6

92.5
0.7
93.2

(1.1)

211.8

The following is a summary of investments with gross unrealized losses and the associated fair value (in millions):

December 31,
2011

December 31,
2010

Fair value
Gross unrealized losses for investments in a loss position 12 months or more
Gross unrealized losses for investments in a loss position less than 12 months

$
$
$

77.8
0.3
0.8

$
$
$

51.1
0.6
0.5

The unrealized losses on these securities are due to a number of factors, including changes in interest rates, changes
in economic conditions and changes in market outlook for various industries, among others. Because Bio-Rad has
the ability and intent to hold these investments with unrealized losses until a recovery of fair value, or for a
reasonable period of time sufficient for a forecasted recovery of fair value, which may be maturity, we do not
consider these investments to be other-than-temporarily impaired at December 31, 2011.

The following is a summary of the amortized cost and estimated fair value of our debt securities at December 31,
2011 by contractual maturity date (in millions):

Mature in less than one year
Mature in one to five years
Mature in more than five years

Total

Amortized
Cost

Estimated Fair
Value

152.1
57.8
21.6

231.5

152.1
57.6
21.5

231.2

The estimated fair value of financial instruments in the table below has been determined using available market
information or other appropriate valuation methodologies. Estimates are not necessarily indicative of the amounts
that could be realized in a current market exchange as considerable judgment is required in interpreting market data

used to develop estimates of fair value. The use of different market assumptions or estimation techniques could
have a material effect on the estimated fair value. Other assets include some financial instruments that have fair
values based on market quotations. Long-term debt has an estimated fair value based on quoted market prices for
the same or similar issues.

The estimated fair value of our financial instruments is as follows (in millions):

December 31, 2011

December 31, 2010

Carrying
Amount

Estimated
Fair
Value

Carrying
Amount

Estimated
Fair
Value

Other assets
Current maturities of long-term debt,

excluding leases

Total long-term debt, excluding leases

and current maturities

186.6

—

719.1

252.4

—

759.1

145.6

225.0

718.2

205.6

228.1

734.8

We own shares of ordinary voting stock of Sartorius AG (Sartorius), of Goettingen, Germany, a process technology
supplier to the biotechnology, pharmaceutical, chemical and food and beverage industries. We own over 30% of the
outstanding voting shares (excluding treasury shares) of Sartorius as of December 31, 2011. The Sartorius family
trust and Sartorius family members hold a controlling interest of the outstanding voting shares. We do not have any
representative or designee on Sartorius’ board of directors, nor do we have the ability to exercise significant
influence over the operating and financial policies of Sartorius. In addition, the ordinary voting stock of Sartorius
is thinly traded. Therefore, we account for this investment using the cost method. The carrying value of this
investment is included in Other assets in our Consolidated Balance Sheets.

GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS

Changes to goodwill by segment were as follows (in millions):

Balances as of January 1:
Goodwill
Accumulated impairment losses
Goodwill, net
Acquisitions
Currency fluctuations
Balances as of December 31:
Goodwill
Accumulated impairment losses
Goodwill, net

Life
Science

2011
Clinical
Diagnostics

Total

Life
Science

2010
Clinical
Diagnostics

Total

70.7
(27.2)
43.5
106.1
—

176.8
(27.2)
149.6

320.5
—
320.5
—
(1.2)

319.3
—
319.3

391.2
(27.2)
364.0
106.1
(1.2)

496.1
(27.2)
468.9

70.7
(27.2)
43.5
—
—

70.7
(27.2)
43.5

284.1
—
284.1
12.8
23.6

320.5
—
320.5

354.8
(27.2)
327.6
12.8
23.6

391.2
(27.2)
364.0

As part of the acquisition of QuantaLife in October 2011 (see Note 2), we recorded $106.1 million of goodwill and
$94.7 million of definite-lived intangible assets considered know how. The determination of the fair value of net
assets acquired of QuantaLife (see Note 2) was based upon valuation information, estimates and assumptions
available at October 4, 2011. We are still finalizing our analysis of a limited number of acquired tax attributes
which could affect the fair values of certain deferred tax assets and goodwill. As a result, as of December 31, 2011,
our accounting for the acquisition was preliminary.

In conjunction with the acquisition of certain businesses of Biotest in January 2010 (see Note 2), we recorded $12.8
million of goodwill and $21.2 million of intangible assets: $7.5 million of customer relationships, $9.5 million of
developed product technology and $4.2 million of tradenames.

Other than goodwill, we have no significant intangible assets with indefinite lives. Information regarding our
identifiable purchased intangible assets with definite lives is as follows (in millions):

December 31, 2011

Customer relationships/lists
Know how
Developed product technology
Licenses
Tradenames
Covenants not to compete
Patents
Other

Average
Remaining
Life (years)
1-12
1-14
1-11
1-9
1-10
1-7
—
—

Average
Remaining
Life (years)
1-13
1-6
1-11
1-10
2-12
1-8
—
1

Purchase
Price

98.7
187.0
47.6
35.6
29.5
5.8
1.0
0.1
405.3

Purchase
Price

102.3
92.6
47.9
35.4
29.5
5.9
1.0
0.1
314.7

Accumulated
Amortization
$

Net
Carrying
Amount

67.8
141.3
23.0
19.9
7.4
0.1
—
—
259.5

Net
Carrying
Amount

77.5
59.6
28.7
23.2
13.6
1.3
—
—
203.9

(30.9)
(45.7)
(24.6)
(15.7)
(22.1)
(5.7)
(1.0)
(0.1)
(145.8)

(24.8)
(33.0)
(19.2)
(12.2)
(15.9)
(4.6)
(1.0)
(0.1)
(110.8)

December 31, 2010

Accumulated
Amortization
$

In 2009, a $3.8 million impairment loss related to intangible assets was recorded in the Life Science segment. The
intangible asset impairment related to the developed technology intangible assets of certain product lines that were
acquired in 2006. No material impairment losses related to intangible assets were recorded in 2011 or 2010.

Amortization expense related to purchased intangible assets for the years ended December 31, 2011, 2010 and 2009
was $39.1 million, $33.7 million and $31.7 million, respectively. Estimated future amortization expense (based on
existing intangible assets) for the years ending December 31, 2012, 2013, 2014, 2015 and 2016 is $43.9 million,
$39.2 million, $36.0 million, $33.0 million and $29.5 million, respectively.

NOTES PAYABLE AND LONG-TERM DEBT

Notes payable includes amounts borrowed against credit lines maintained locally by our international subsidiaries,
in which the borrowing capacity was approximately $21.9 million and $17.5 million was unused at December 31,
2011. At December 31, 2010, these lines aggregated approximately $51.2 million, of which $48.0 million was
unused. The weighted average interest rate on these lines was 2.7% and 1.4% at December 31, 2011 and 2010,
respectively. Bio-Rad guaranteed most of these credit lines.

The principal components of long-term debt are as follows (in millions):

7.5% Senior Subordinated Notes due 2013
8.0% Senior Subordinated Notes due 2016
4.875% Senior Notes due 2020
Capital leases and other debt

Less current maturities
Long-term debt

Senior Subordinated Notes due 2013

December 31,
2011

December 31,
2010

—
296.3
422.8
13.2
732.3
(0.6)

731.7

225.0
295.6
422.6
21.0
964.2
(233.1)

731.1

In August 2003, Bio-Rad sold $225.0 million principal amount of Senior Subordinated Notes due 2013 (7.5%.
Notes). In January 2011, we redeemed all of the 7.5% Senior Subordinated Notes due 2013 for $234.6 million,
including a call premium, which is included in Interest expense in our Consolidated Statements of Income.

Senior Subordinated Notes due 2016

In May 2009, Bio-Rad sold $300.0 million principal amount of Senior Subordinated Notes due 2016 (8.0% Notes).
The sale yielded net cash proceeds of $294.8 million at an effective interest rate of 8.3%. The 8.0% Notes pay a
fixed rate of interest of 8.0% per year. We have the option to redeem any or all of the 8.0% Notes at any time prior
to September 15, 2013 at a redemption price of 100% of the principal amount thereof plus a specified make-whole
premium (as defined in the indenture) governing the 8.0% Notes and accrued and unpaid interest thereon to the
redemption date. We also have the option to redeem any or all of the 8.0% Notes at any time on or after September
15, 2013 at various declining redemption prices plus accrued and unpaid interest thereon to the redemption date.
Our obligations under the 8.0% Notes are not secured, rank equal in right of payment with all of our existing and
future senior subordinated indebtedness and rank junior in right of payment to all of our existing and future
unsubordinated indebtedness, including any borrowings under the Credit Agreement and the 4.875% Notes.

Senior Notes due 2020

In December 2010, Bio-Rad sold $425.0 million principal amount of Senior Notes due 2020 (4.875% Notes). The
sale yielded net cash proceeds of $422.6 million at an effective rate of 4.946%. The 4.875% Notes pay a fixed rate
of interest of 4.875% per year. We have the option to redeem any or all of the 4.875% Notes at any time at a
redemption price of 100% of the principal amount (plus a specified make-whole premium as defined in the
indenture governing the 4.875% Notes) and accrued and unpaid interest thereon to the redemption date. Our
obligations under the 4.875% Notes are not secured and rank equal in right of payment with all of our existing and
future unsubordinated indebtedness. The net proceeds from the issuance of the 4.875% Notes were used, together
with cash on hand, to redeem all $200.0 million of our 6.125% Notes (as defined below) in December 2010 and all
$225.0 million of our 7.5% Notes (as defined above) in January 2011.

Senior Subordinated Notes due 2014

In December 2004, Bio-Rad sold $200.0 million principal amount of Senior Subordinated Notes due 2014 (6.125%
Notes). In December 2010, we redeemed all of the 6.125% Notes for $204.3 million, including a call premium,
which is included in Interest expense in our Consolidated Statements of Income.

Amended and Restated Credit Agreement (Credit Agreement)

In June 2010, Bio-Rad entered into a $200.0 million Credit Agreement. Borrowings under the Credit Agreement are
on a revolving basis and can be used for acquisitions, for working capital and for other general corporate purposes.
We had no outstanding borrowings under the Credit Agreement as of December 31, 2011. The Credit Agreement
expires on June 21, 2014.

The Credit Agreement is secured by substantially all of our personal property assets, the assets of our domestic
subsidiaries and 65% of the capital stock of certain of our foreign subsidiaries. It is guaranteed by all of our
existing and future material domestic subsidiaries. The Credit Agreement and the 8.0% Notes require Bio-Rad to
comply with certain financial ratios and covenants, among other things. These ratios and covenants include a
leverage ratio test and an interest coverage test, as well as restrictions on our ability to declare or pay dividends,
incur debt, guarantee debt, enter into transactions with affiliates, merge or consolidate, sell assets, make
investments, create liens and prepay subordinated debt. We were in compliance with all of these ratios and
covenants as of December 31, 2011.

Maturities of long-term debt at December 31, 2011 are as follows: 2012 - $0.6 million; 2013 - $0.2 million; 2014 -
$0.2 million; 2015 - $0.2 million; 2016 - $296.5 million; thereafter - $434.7 million.

6. INCOME TAXES

The U.S. and international components of income before taxes are as follows (in millions):

U.S.
International
Income before taxes

Year Ended December 31,
2010

2009

2011

110.6
125.2
235.8

79.5
140.8
220.3

87.2
98.6
185.8

The provision for income taxes consists of the following (in millions):

Current tax expense (benefit):

U.S. Federal
State
International

Current tax expense

Deferred tax expense (benefit):

U.S. Federal
State
International

Deferred tax benefit

Non-current tax (benefit) expense
Provision for income taxes

Year Ended December 31,
2010

2009

2011

28.6
3.4
35.8
67.8

6.7
0.4
(9.1)
(2.0)
(8.1)
57.7

(5.1)
3.9
35.2
34.0

5.9
0.2
(10.2)
(4.1)
3.4
33.3

24.9
4.4
17.3
46.6

(2.5)
(0.3)
(8.9)
(11.7)
1.8
36.7

The reconciliation between our effective tax rate on income before taxes and the statutory tax rate is as follows:

U. S. statutory tax rate
Impact of foreign operations
Research tax credits
Tax settlements and adjustments to unrecognized tax benefits
Repatriation of foreign earnings
Other
Provision for income taxes

Year Ended December 31,
2010

2009

2011

35%
(4)
(4)
(3)
—
—
24%

35%
(6)
(4)
2
(10)
(2)
15%

35%
(7)
(7)
1
—
(2)
20%

Deferred tax assets and liabilities reflect the tax effects of losses, credits, and temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax
purposes. Significant components of deferred tax assets and liabilities are as follows (in millions):

Deferred tax assets:

Bad debt, inventory and warranty accruals
Other reserves
Tax credit and net operating loss carryforwards
Other
Valuation allowance

Deferred tax liabilities:

Depreciation
Basis of capital assets and investments

Net deferred taxes

December 31,

2011

2010

24.7
16.6
64.2
17.2
(48.9)
73.8

13.5
86.3
99.8
(26.0)

25.5
16.7
35.7
13.3
(37.0)
54.2

11.4
46.5
57.9
(3.7)

At December 31, 2011, Bio-Rad’s international subsidiaries had combined net operating loss carryforwards of $81.4
million. Of these loss carryforwards, $80.6 million have no expiration date. We believe that it is more likely than
not that the benefit from these net operating loss carryforwards will not be realized. We have provided a valuation
allowance of $24.8 million relating to these net operating loss carryforwards.

At December 31, 2011, Bio-Rad had U.S. Federal net operating loss carryforwards of approximately $56 million as
a result of acquisitions. These carryforwards are subject to limitation on their utilization and will expire between
2018 and 2032. At December 31, 2011, Bio-Rad had U.S. Federal research tax credit carryforwards of $1.1 million,
which are subject to limitations on their utilization.

At December 31, 2011, Bio-Rad had approximately $55 million of California net operating loss carryforwards
related to the acquisition of QuantaLife. We believe that it is more likely than not that the benefit from these net
operating loss carryforwards will not be realized and have recorded a full valuation allowance against these losses.
At December 31, 2011, Bio-Rad had a deferred tax asset of $13.7 million relating to California research tax credit
carryforwards, including $1.1 million from the acquisition of QuantaLife, which may be carried forward
indefinitely. Based on our judgment and consistent with prior years, we have recorded a full valuation allowance
against the deferred tax asset.

We believe that it is more likely than not that certain of these deferred tax assets described above will not be
realized in the foreseeable future. If or when recognized, the tax benefits relating to any reversal of the valuation
allowance on deferred tax assets at December 31, 2011, other than those related to QuantaLife within the
measurement period, will be recognized as a reduction of income tax expense.

The following table summarizes at December 31, 2011 the tax years that are either currently under audit or remain
open and subject to examination by tax authorities in the major jurisdictions that Bio-Rad operates:

U.S.
Canada
France
Germany
Italy
Japan
Switzerland

2008-2011
2006-2011
2009-2011
2008-2011
2007-2011
2009-2011
2010-2011

The following is a tabular reconciliation of the total amounts of unrecognized tax benefits for the year (in millions):

Unrecognized tax benefits – January 1

Additions to tax positions related to prior years
Reductions to tax positions related to prior years
Additions to tax positions related to the current year
Settlements
Lapse of statute of limitations
Currency translation
Unrecognized tax benefits – December 31

2011

2010

2009

20.6
1.2
(0.4)
2.1
(5.2)
(5.1)
(0.3)

17.5
4.1
(0.1)
3.3
(0.1)
(4.1)
—

18.1
2.1
(4.3)
3.3
—
(1.9)
0.2

17.5

12.9

20.6

Substantially all our unrecognized tax benefits at December 31, 2011, 2010 and 2009 would affect the effective tax
rate if recognized.

Bio-Rad recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense.
Related to the unrecognized tax benefits noted above, Bio-Rad has accrued interest of $2.1 million and $2.8 million
as of December 31, 2011 and 2010, respectively.

At December 31, 2011, we believe that it is reasonably possible that $2.8 million of our unrecognized tax benefits
may be recognized by the end of 2012 as a result of statute lapses. These benefits are related to uncertainty
regarding sustainability of certain deductions and credits for tax years that remain subject to examination by the
relevant tax authorities.

In general, it is our practice and intention to reinvest the earnings of our non-U.S. subsidiaries in their operations.
As of December 31, 2011, Bio-Rad had not made a provision for U.S. or additional foreign withholding taxes on
approximately $433 million of the excess of the amount for financial reporting over the tax basis of investments in
foreign subsidiaries that are essentially permanent in duration. Generally, such amounts become subject to U.S.
taxation upon remittance of dividends and under certain other circumstances. If these earnings were repatriated to
the U.S., the deferred tax liability associated with these temporary differences would be approximately $93 million.

STOCKHOLDERS' EQUITY

Bio-Rad’s issued and outstanding stock consists of Class A Common Stock (Class A) and Class B Common Stock
(Class B). Each share of Class A and Class B participates equally in the earnings of Bio-Rad, and is identical in
most respects except that Class A has limited voting rights. Each share of Class A is entitled to one tenth of a vote
on most matters, and each share of Class B is entitled to one vote. Additionally, Class A stockholders are entitled to
elect 25% of the Board of Directors and Class B stockholders are entitled to elect 75% of the directors. Cash
dividends may be paid on Class A shares without paying a cash dividend on Class B shares but no cash dividend
may be paid on Class B shares unless at least an equal cash dividend is paid on Class A shares. Class B shares are
convertible at any time into Class A shares on a one-for-one basis at the option of the stockholder. The Schwartz
family collectively holds a majority of Bio-Rad’s voting stock. As a result, the Schwartz family is able to exercise
significant influence over Bio-Rad.

8. SHARE-BASED COMPENSATION/STOCK OPTION AND PURCHASE PLANS

Description of Share-Based Compensation Plans

Stock Option and Award Plans
We have three stock option plans for officers and certain other employees: the 1994 Stock Option Plan (1994 Plan);
the 2003 Stock Option Plan (2003 Plan); and the 2007 Incentive Award Plan (2007 Plan). The 1994 Plan and 2003
Plan authorized the grant of incentive stock options and non-qualified stock options to employees. The 2007 Plan
authorizes the grant of stock options, restricted stock awards, stock appreciation rights and other types of equity
awards to employees. We no longer grant stock option grants under the 1994 Plan or 2003 Plan. A total of
1,650,360 shares have been reserved for issuance of equity awards under the 2007 Plan and may be of either Class
A or Class B common stock. At December 31, 2011, there were 816,322 shares available to be granted in the
future.

Under these plans, Class A and Class B options are granted at prices not less than fair market value of the
underlying common stock on the date of grant. Generally, options granted have a term of 10 years and vest in
increments of 20% per year over a five-year period on the yearly anniversary date of the grant. Stock awards issued
under the 2007 Plan generally vest in increments of 20% per year over a five-year period on the yearly anniversary
date of the grant.

Employee Stock Purchase Plans
Our Amended and Restated 1988 Employee Stock Purchase Plan (1988 ESPP) provides that eligible employees
may contribute up to 10% of their compensation up to $25,000 annually toward the quarterly purchase of our Class

A common stock. The employees’ purchase price is 85% of the lesser of the fair market value of the stock on the
first business day or the last business day of each calendar quarter. We have authorized the sale of 2,390,000 shares
of common stock under the 1988 ESPP. After December 31, 2011, we do not intend to issue shares from this plan.

In April 2011, our shareholders approved the 2011 Employee Stock Purchase Plan (2011 ESPP) and has the same
terms as the 1988 ESPP in regard to employee contributions and purchase price. The 2011 ESPP provides eligible
employees the opportunity to purchase shares of Company Class A common stock. The 2011 ESPP includes two
components: a Code Section 423 Component that we intend to qualify as an “employee stock purchase plan” under
Section 423 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) and a Non-423 Component,
which authorizes the grant of purchase rights that does not qualify as an “employee stock purchase plan” under
Section 423 of the Code. Under the 2011 ESPP, 600,000 shares of Class A common stock are authorized for sale.

Share-Based Compensation Expense

Included in our share-based compensation expense is the cost related to stock option grants, ESPP stock purchases,
restricted stock and restricted stock unit awards. Share-based compensation expense is allocated to Cost of goods
sold, Research and development expense, and Selling, general and administrative expense in the Consolidated
Statements of Income.

For 2011, 2010 and 2009, we recognized pre-tax share-based compensation expense of $10.7 million, $10.2 million
and $9.1 million, respectively. We did not capitalize any share-based compensation expense.

For options and awards, we amortize the fair value on a straight-line basis. All stock compensation awards are
amortized over the requisite service periods of the awards, which are generally the vesting periods.

Stock Options
The following table summarizes stock option activity.

Outstanding, January 1, 2009

Granted
Exercised
Forfeited/expired

Outstanding, December 31, 2009

Granted
Exercised
Forfeited/expired

Outstanding, December 31, 2010

Granted
Exercised
Forfeited/expired

Outstanding, December 31, 2011
Vested and expected to vest,

December 31, 2011

Exercisable, December 31, 2011

Weighted-
Average
Remaining
Contractual
Term (in
years)

Aggregate
Intrinsic
Value
(in millions)

4.35

4.27
3.38

$
$

29.1

29.0
27.4

Weighted-
Average
Exercise Price
48.84
75.07
38.20
59.15
50.78
84.57
26.81
61.08
57.12
99.49
42.44
62.98
63.50

$
$
$
$
$
$
$
$
$
$
$
$
$

Shares
1,254,127
58,500
(90,542)
(15,711)
1,206,374
58,500
(200,125)
(6,930)
1,057,819
58,500
(220,372)
(7,197)
888,750

872,130
712,950

$
$

62.99
57.58

The following summarizes information about stock options outstanding at December 31, 2011:

Range of
Exercise Prices
$ 28.61 - $ 53.75
$ 56.05 - $ 62.47
$ 63.00 - $ 84.57
$ 88.00 - $100.06
Totals

Number
Outstanding

260,373
254,351
257,726
116,300
888,750

Options Outstanding
Weighted-Average
Remaining
Contractual Term
(in years)

Weighted -
Average
Exercise
Price

Options Exercisable

Number
Exercisable

Weighted -
Average
Exercise Price

1.57
3.53
6.26
8.15

$
$
$
$

44.67
58.98
73.24
93.96

260,373
254,351
164,026
34,200
712,950

$
$
$
$

44.67
58.98
69.48
88.36

Intrinsic value for stock options is defined as the difference between the current market value and the grant price.
The total intrinsic value on the date of exercise of stock options exercised during 2011, 2010 and 2009 was
approximately $14 million, $13 million and $4 million, respectively.

Cash received from stock options exercised during 2011, 2010 and 2009 was $9.4 million, $5.4 million and $3.5
million, respectively. The actual tax benefit realized for the tax deductions from stock options exercised totaled
$6.0 million, $5.0 million and $2.0 million in 2011, 2010 and 2009, respectively.

As of December 31, 2011, there was $5.6 million of total unrecognized compensation cost from stock options. The
cost is expected to be recognized in the future over a weighted-average period of approximately 3 years.

The weighted-average fair value of stock options granted was estimated using a Black-Scholes option-pricing
model with the following weighted-average assumptions:

Expected volatility
Risk-free interest rate
Expected life (in years)
Expected dividend
Weighted-average fair value of options granted

Year Ended December 31,
2010

2009

2011

32%
1.71%
8.6
—
40.81

35%
2.40%
8.7
—
38.19

34%
3.69%
8.4
—
35.56

Volatility is based on the historical volatilities of our common stock for a period equal to the stock option’s
expected life. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of the grant.
The expected life represents the number of years that we estimate, based primarily on historical experience, that the
options will be outstanding prior to exercise. We do not anticipate paying any cash dividends in the future and
therefore use an expected dividend yield of zero.

Restricted Stock
Under the 2007 Plan, restricted stock was last granted in 2008 and there will be no further grants. The fair value of
each share of restricted stock is the market value as determined by the closing price of the stock on the day of grant.

The following table summarizes restricted stock activity:

2011

Year Ended December 31,
2010

2009

Restricted
Stock
Shares

Weighted-
Average
Grant-Date
Fair Value

Restricted
Stock
Shares

Weighted-
Average
Grant-Date
Fair Value

Restricted
Stock
Shares

Weighted-
Average
Grant-Date
Fair Value

68,893
—
(26,179)
(3,085)

39,629

$
$

83.21
—
81.98
82.63

101,247
—
(28,518)
(3,836)

84.07

68,893

$
$

82.86
—
81.94
83.47

135,914
—
(29,572)
(5,095)

83.21

101,247

$
$

82.64
—
81.94
82.45

82.86

Nonvested shares, at
beginning of year

Granted
Vested
Cancelled/forfeited
Nonvested shares, at

end of year

As of December 31, 2011, there was approximately $2 million of total unrecognized compensation cost related to
restricted stock granted under the 2007 Plan. The cost is expected to be recognized over a remaining weighted-
average period of approximately 1 year.

Restricted Stock Units
Restricted stock units, which are rights to receive shares of company stock, were granted from 2007 through 2011
under the 2007 Plan. The fair value of each restricted stock unit is the market value as determined by the closing
price of the stock on the day of grant.

The following table summarizes restricted stock unit activity:

Restricted
Stock
Units

Weighted-
Average
Grant-Date
Fair Value

Weighted-Average
Remaining
Contractual Term
(in years)

Aggregate
Intrinsic Value
as of
December 31,
2011
(in millions)

Outstanding, January 1, 2009

Granted
Vested
Forfeited

Outstanding, December 31, 2009

Granted
Vested
Forfeited

Outstanding, December 31, 2010

Granted
Vested
Forfeited

Outstanding, December 31, 2011

60,649
120,685
(11,885)
(6,251)
163,198
126,330
(33,825)
(13,481)
242,222
127,920
(54,350)
(16,430)
299,362

$
$
$
$
$
$
$
$
$
$
$
$
$

83.08
74.40
79.77
80.20
77.01
84.57
78.41
79.71
80.61
98.25
79.67
80.70
88.31

2.24

28.8

As of December 31, 2011, there was approximately $20.5 million of total unrecognized compensation cost related
to restricted stock units granted under the 2007 Plan. The cost is expected to be recognized over a remaining
weighted-average period of approximately 4 years.

Employee Stock Purchase Plans
The fair value of the employees’ purchase rights under the 1988 ESPP was estimated using a Black-Scholes model
with the following weighted-average assumptions:

Expected volatility
Risk-free interest rate
Expected life (in years)
Expected dividend
Weighted-average fair value

of purchase rights

Year Ended December 31,
2010

2009

2011

20%
0.06%
.25
—

23%
0.15%
.25
—

35%
0.14%
.25
—

$20.35

$18.27

$16.71

The major assumptions are primarily based on historical data. Volatility is based on the historical volatilities of our
common stock for a period equal to the expected life of the purchase rights. The risk-free interest rate is based on
the U.S. Treasury yield curve in effect at the time of the grant. We do not anticipate paying any cash dividends in
the future and therefore use an expected dividend yield of zero.

We sold 96,362 shares for $8.1 million, 96,586 shares for $7.4 million and 109,025 shares for $6.8 million under
the 1988 ESPP to employees in 2011, 2010 and 2009, respectively. At December 31, 2011, 35,656 shares remain
authorized under the 1988 ESPP; however, we do not intend to issue shares from this plan after December 31, 2011.
At December 31, 2011, 600,000 shares remain authorized under the 2011 ESPP.

We currently issue new shares to satisfy stock option exercises, restricted stock issuances and ESPP stock
purchases.

9. OTHER INCOME AND EXPENSE, NET

Other (income) expense, net includes the following components (in millions):

Interest and investment income
Net realized gains on investments
Other-than-temporary impairment losses on investments
Foreign non-income tax relief
Miscellaneous other items

Other (income) expense, net

Year Ended December 31,
2010

2011

2009

(8.2)
(0.7)
2.1
—
(0.8)

(5.2)
(0.6)
0.2
—
1.7

(7.6)

(3.9)

(5.7)
—
3.5
(4.6)
(0.1)

(6.9)

Other-than-temporary impairment losses on investments were recorded in 2011, 2010 and 2009 on certain of our
available-for-sale investments in light of the continuing declines in their market prices at that time. We did not
believe these particular investments would recover their carrying value.

10. SUPPLEMENTAL CASH FLOW INFORMATION

The reconciliation of net income including noncontrolling interests to net cash provided by operating activities is as
follows (in millions):

Net income including noncontrolling interests
Adjustments to reconcile net income including

noncontrolling interests to net cash provided by
operating activities (net of effects of acquisitions):

Depreciation and amortization
Share-based compensation
Foreign currency economic hedges, net
Losses (gains) on dispositions of securities
Excess tax benefits from share-based compensation
(Increase) decrease in accounts receivable, net
(Increase) decrease in inventories, net
Decrease (increase) in other current assets
(Decrease) increase in accounts payable

and other current liabilities

Increase (decrease) in income taxes payable
Decrease in deferred income taxes
Purchased intangible asset impairment
Other

Net cash provided by operating activities

Non-cash investing activities:
Purchased marketable securities and investments

Year Ended December 31,
2010

2009

2011

178.0

186.9

149.2

121.0
10.7
(2.9)
1.5
(3.2)
(20.1)
(44.0)
0.8

(6.6)
15.3
(1.6)
—
10.9

108.9
10.2
(3.2)
(0.5)
(2.9)
(37.0)
(15.9)
(9.3)

9.1
(19.3)
(6.5)
—
5.4

101.7
9.1
2.5
3.5
(0.7)
4.3
35.8
11.8

6.1
8.7
(11.6)
3.8
0.9

259.8

225.9

325.1

11.6

—

11. COMMITMENTS AND CONTINGENT LIABILITIES

Rents and Leases

Net rental expense under operating leases was $42.4 million, $38.3 million and $37.0 million in 2011, 2010 and
2009, respectively. Leases are principally for facilities and automobiles.

Annual future minimum lease payments at December 31, 2011 under operating leases are as follows: 2012 - $34.9
million; 2013 - $27.2 million; 2014 - $21.4 million; 2015 - $14.5 million; and 2016 and beyond - $50.3 million.

Deferred Profit Sharing Retirement Plan

We have a profit sharing plan covering substantially all U.S. employees. Contributions are made at the discretion of
the Board of Directors. Bio-Rad has no liability other than for the current year’s contribution. Contribution
expense was $12.1 million, $12.2 million and $11.5 million in 2011, 2010 and 2009, respectively.