10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
FORM 10-K
X	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
	SECURITIES EXCHANGE ACT OF 1934

For the year ended December 31, 2005
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							94-1381833
(State or other jurisdiction of incorporation or organization)							(I.R.S. Employer Identification No.)
1000 Alfred Nobel Drive, Hercules, California							94547
(Address of principal executive offices)							(Zip Code)
Registrant's telephone number, including area code				(510)724-7000
Securities registered pursuant to Section 12 (b) of the Act:
Title of Each Class		Name of Each Exchange on Which Registered			Shares Outstanding February 15, 2006					Market  Value on  February 15, 2006 of Stocks Held by Non-Affiliates
Class A Common Stock Par Value $0.0001 per share		American Stock Exchange			21,375,972					$ 1,161,463,132
Class B Common Stock Par Value $0.0001 per share		American Stock Exchange			4,909,908					$ 33,364,188
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.
									[ X ]    Yes		[    ]    No
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the Act.
									[    ]     Yes		[ X ]    No
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.									[ X ]    Yes		[    ]    No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference
In Part III of the Form 10-K or any amendment to this Form 10-K.  [ X ]
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.  See
definitions of “accelerated filer and large accelerated filer” in Rule 12b-2 or the Exchange Act. (Check one):
Large accelerated filer    [  X  ]			Accelerated filer   [    ]					Non-accelerated filer    [    ]
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
									[    ]     Yes		[ X ]    No

Documents Incorporated by Reference

	Document	Form 10-K Parts
(1)	Annual Report to Stockholders for the fiscal year
	ended December 31, 2005 (specified portions)	I, II, IV
(2)	Definitive Proxy Statement to be mailed to stockholders
	in connection with the registrant's 2006 Annual Meeting
	of Stockholders (specified portions)	III

P A R T  I

ITEM 1. BUSINESS

General

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.  In 1967, Bio-Rad entered the field of clinical diagnostics with the develop­ment of its first test kit based on separation techniques and materials developed for life science research.  Recognizing that the fields of clinical diagnostics and life science research were evolving toward more automated techniques, Bio-Rad expanded into the field of analytical and measuring instrument systems through internal research and development efforts and acquisitions in the late 1970's and 1980's.

As Bio-Rad broadened its product lines, it also expanded its geographical market. Bio-Rad has distribution chan­nels in over thirty countries outside the United States through subsidiaries whose primary focus is customer service and product distribution.

On October 1, 1999 Bio-Rad acquired the stock of Pasteur Sanofi Diagnostics (PSD) and the rights to certain ancillary assets for $210 million.  PSD was founded by the Institut Pasteur to commercialize its diagnostic research, and held certain exclusive licenses from the Institut Pasteur in the HIV and infectious disease diagnostic product market.  PSD also expanded the geographic reach and market penetration for our products particularly in Latin America, Africa and France.

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.

Description of Business

Business Segments

Bio-Rad operates in two industry segments designated as Life Science and Clinical Diagnostics.  Each operates in both the United States and international markets.  For a description of business and financial information on industry and geographic segments, see Note 15 on pages 30 through 33 of Exhibit 13.1, which is incorporated herein by reference.

Life Science Segment.

Life science is the study of the characteristics, behavior, and structure of living organisms and their component systems.  Life science researchers use a variety of products and systems-- including reagents, instruments, software and apparatus-- to advance the study of life processes, drug discovery, biotechnology and food pathogen testing, primarily within a laboratory setting.

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We focus on selected segments of the life science market all dealing with functional genomics and proteomics and which we estimate 2005 worldwide sales totaled approximately $4 billion.  The primary technological applications that we supply to these segments consist of electrophoresis, image analysis, molecular detection, chromatography, gene transfer, sample preparation and amplification. The primary end-users in our sectors of the market are universities and medical schools, industrial research organizations, government agencies, pharmaceutical manufacturers, biotechnology researchers and food testing laboratories.

Clinical Diagnostics Segment.

The clinical diagnostics industry encompasses a broad array of technologies incorporated into a variety of tests used to detect, identify and quantify substances in blood or other bodily fluids and tissues.  The test results are used as aids for medical diagnosis, detection, evaluation, monitoring and treatment of diseases and other medical conditions.  The bulk of tests are performed in vitro (outside the body), while the remainder consist of in vivo ("in the body") tests.  The most common type of in vitro tests are routine chemistry tests that measure important health parameters, such as glucose, cholesterol or sodium, as part of routine blood checks.  Other diagnostic tests are more specialized and require more sophisticated equipment and materials than do routine tests.  These specialized tests are typically lower-volume and higher-priced than routine tests.  We estimate that in 2005 the global clinical diagnostics market to taled approximately $28.0 billion.

The primary end-users in the areas of the clinical diagnostics industry we target are hospital laboratories, reference laboratories, physician office laboratories, government agencies and other diagnostics manufacturers.

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.

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Sales and Marketing

Each of Bio-Rad's segments maintains a sales force to sell its products on a direct basis.  Each sales force is technically trained in the disciplines associated with its products.  Sales are also generated through direct mail advertising, exhibits at trade shows and technical meetings, telemarketing, e-commerce and by extensive advertising in technical and trade publications.  Sales and marketing efforts are augmented by technical service departments that assist customers in effective product utilization and in new product applications.  Bio-Rad also produces and distributes technical literature and holds seminars for customers on the use of its products.

Our customer base is broad and diversified.  In 2005, no single customer accounted for more than 2% 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.

Bio-Rad is the leading provider of BSE (Bovine Spongiform Encephalopathy or mad cow) tests throughout the world.  Revenues from the sales of BSE testing products within our Life Science segment was less than 10% of consolidated net revenue in 2005.  In 2004, the BSE revenue was approximately 11% of consolidated net revenue.  A large portion of the revenue for this product is driven by government agencies currently mandating the use of the test.  Competition, pricing, changes in test standards, technology or a decrease in testing demand could negatively impact our future revenue from this product.

Most of our international sales are generated by wholly-owned subsidiaries and their branch offices.  Certain of these subsidiaries also have manufacturing facilities.  While 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, our international operations are principally in developed nations, which we regard as presenting no significantly greater risks to its operations than are present in the United States.

Competition

Most markets served by our product groups are competitive.  Our competitors range in size from start-ups to large multinational corporations. 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 marketing information, that while some competitors are dominant with respect to certain individual products, no one company, including us, is dominant with respect to a material portion of any segment of our business.

Because of the breadth of its product lines, Life Science does not face the same competitor for all of its products.  Competitors in this market include GE Biosciences, Invitrogen, Qiagen, and Applied BioSystems (Applera).  We compete primarily based on meeting performance specifications.

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Competitors in the Clinical Diagnostics segment range in size from small private companies to large multinational corporations. We compete mainly in specific market niches and do not attempt to pursue the most competitive general diagnostics markets.  We compete based on our technological ability to provide customers with very specific tests and believe we are usually a significant competitor within our market niche.  Competitors include Abbott Laboratories, bioMerieux, Inc., Roche Diagnostics, Tosoh, Inova, diaSorin and Fisher-MAS.

Product Research and Development

We conduct extensive product research and development activities in all areas of our business, employing approximately 700 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 and testing of new products and applications, we consult with scientific and medical professionals at universities, hospitals and medical schools, and in industry.  Excluding in-process research and development, we spent approximately $115.1 million, $108.3 million and $91.3 million on research and development activities during the years ended December 31, 2005, 2004 and 2003 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 equipment, 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.  These requirements relating to testing and trials, product licensing, pricing and reimbursement vary widely among countries.

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 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.

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Employees

At  January 31, 2006, Bio-Rad had approximately 5,200 full-time employees.  Fewer than 9% of Bio-Rad's approximately 2,600 U. S. employees are covered by a collective bargaining agreement which will expire on November 7, 2006.  Many of Bio-Rad's non-U.S. full-time employees, especially in France, are covered by collective bargaining agreements.  Bio-Rad considers its 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 450 Fifth Street, NW, 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 Internet website, our Form 10-K's, 10-Q's and 8-K's, and any amendments to these forms, as soon as reasonably practicable after filing with the SEC.

ITEM 1A. RISK FACTORS

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.  Although we believe that we have certain technological and other advantages over our competitors, 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 foreign risks such as general economic and market conditions in the countries in which we operate.

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A significant portion of our sales are made outside of the United States.  Our foreign subsidiaries generated 64% of our net sales in the year ended December 31, 2005.  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 and currency exchange rate risks.  Although we enter into forward foreign exchange contracts to hedge against future movements in foreign exchange rates that affect our intercompany receivables and payables denominated in foreign currencies, 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 policies of our customers, and the effect of potential 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 policies of these institutions and companies have a significant effect on the demand for our products.  Such policies 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 capital spending 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 efforts to reform the healthcare delivery system in the U.S.  and 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 United States and European healthcare markets continue, we could be forced to alter our approach in selling, marketing, distributing and servicing our products.

We derive a portion of our profits from our tests for “mad cow” disease.

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A portion of our revenues and profits derive from the sale of our tests for Bovine Spongiform Encephalopathy (“BSE” or “mad cow” disease).  We believe that there are multiple other competitors that offer BSE tests approved by regulatory authorities in Europe and Japan.  However, our BSE tests have limited patent protection.  Further, government subsidies have supported purchases by our customers of BSE tests.  If governments in our key markets cease or substantially reduce the subsidies provided, we may have to lower prices for, or reduce sales of, our BSE tests.  Finally, if the threat to the world food supply from BSE was materially reduced, either through eradication of BSE or otherwise, sales of BSE tests would materially decline.  If any of these events were to occur, it could have a material negative impact on our financial condition or results of operations.

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.  While we expect to continue to invest in research and development for all of our market segments, 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 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.  While we have contingency plans in place in case of an emergency, we cannot assure you that the 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 an effective planning, reporting and management process.  We expect that we will need to continue to improve and further integrate our IT systems, reporting systems and procedures and train and educate 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 and reporting systems, it could adversely affect our business or operating results.

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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 exclusive 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 manuf acturing 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 our marketing are subject to federal, state, local and foreign regulation, including the U.S. Food and Drug Administration (“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.

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We will 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.  In that regard, we currently are investigating soil and groundwater contamination at one of our properties under the oversight of a state agency.  Based on the currently available information, we believe that the costs to clean up this contamination will not have a material adverse effect on the future results of our operations or our financial condition.  We can provide no assurance, however, that such matters or any future obligations to com ply with environmental laws and regulations will not have a material impact on our operations or financial condition.

We cannot assure you that we will be able to integrate acquired companies, products or technologies into our company successfully.

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:

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assimilate the operations and personnel of acquired companies;

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minimize potential disruption to our ongoing business;

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retain key technical and management personnel;

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integrate acquired companies into our strategic and financial plans;

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accurately assess the value of target companies, products and technologies;

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harmonize standards, controls, procedures and policies; and

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minimize the impact to our relationships with our employees and customers.

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 and 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.

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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 seriously 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 15, 2006 the Schwartz family collectively held approximately 17% of our Class A Common Stock and 89% 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.

Our business could be adversely impacted if we have deficiencies in our disclosure controls and procedures or internal control over financial reporting.

The design and effectiveness of our disclosure controls and procedures and internal control over financial reporting may not prevent all errors, misstatements or misrepresentations.  While management continues to review the effectiveness of our disclosure controls and procedures and internal control over financial reporting, we can not assure you that our disclosure controls and procedures over internal control of financial reporting will be effective in accomplishing all control objectives all of the time.  Deficiencies, particularly a material weakness in internal control over financial reporting, which may occur in the future could result in misstatements of our results of operations, restatements of our financial statements, a decline in our stock price, or otherwise materially adversely affect our business, reputation, results of operation, financial condition or liquidity.

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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.

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.

The threat of terrorist attacks in the United States since September 11, 2001 continues to create many economic and political uncertainties.  The potential for future terrorist attacks, the United States and international responses to terrorist attacks, and other acts of war or hostility, including the war in Iraq, may cause greater uncertainty and cause our business to suffer in ways that we cannot currently predict.  Events such as those referred to above could cause or contribute to a general decline in investment valuations, which in turn could reduce the market value of your investment.  In addition, terrorist attacks, particularly acts of bioterrorism that directly impact our physical facilities or those of our suppliers or customers could have an impact on our sales, supply chain, production capability and costs and our ability to deliver our products to our customers.

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 the notes.

As of December 31, 2005 we and our subsidiaries have approximately $426.1 million of outstanding indebtedness.  In addition, the indenture governing the notes permits us to incur additional debt provided we comply with the limitation on the incurrence of additional indebtedness and disqualified capital stock covenant contained in the indenture.

The following chart shows certain important credit statistics and is presented as of December 31, 2005.

	At December 31, 2005
	(in millions)
Total debt	$426.1
Stockholders’ equity	$658.0
Debt to equity ratio	0.7

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

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make it more difficult for us to satisfy our financial obligations, including those relating to the notes;

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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 the notes, which will reduce funds available for other business purposes;

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increase our vulnerability to general adverse economic and industry conditions;

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limit our flexibility in planning for, or reacting to, changes in our business and the industries in which we operate;

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place us at a competitive disadvantage compared with some of our competitors that have less debt; and

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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.

The agreements governing our debt impose restrictions on our business.

The indenture governing our notes and the terms of other debt instruments, including without limitation our credit facilities and other 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:

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incur additional debt;

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create liens;

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make investments;

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enter into transactions with affiliates;

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sell assets;

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in the case of some of our subsidiaries, guarantee debt;

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declare or pay dividends, redeem stock or make other distributions to shareholders; and

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consolidate or merge.

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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.  In addition, acceleration of our other indebtedness may cause us to be unable to make interest payments on our notes and repay the principal amount of the notes or may cause the future subsidiary guarantors, if any, to be unable to make payments under the guarantees.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

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	Owned/Leased
Life Science	Richmond, California	Owned/Leased
	Hercules, California	Owned/Leased
	Waltham, Massachusetts	Leased
	Milan, Italy	Leased
	Riom, France	Owned/Leased
Clinical
Diagnostics	Hercules, California	Owned/Leased
	Irvine, California	Leased
	Greater Seattle, Washington	Owned/Leased
	Plano, Texas	Leased
	Lille, France	Owned
	Paris, France	Leased
	Munich, Germany	Leased
	Nazareth-Eke, Belgium	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.

14

We have several facilities near Paris.  The Marnes la Coquette facility serves as a significant manufacturing, administrative and research facility.  The lease formally expired at December 31, 2005.  We believe we will successfully conclude negotiations to extend the lease for several years.  In 2006 we will also occupy a new facility which will become our logistics center for distributing Bio-Rad products throughout Europe.

ITEM 3. LEGAL PROCEEDINGS

Note 14, "Legal Proceedings," appearing on page 27 of the Exhibit 13.1 is incorporated herein by reference.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of Bio-Rad's security holders during the fourth quarter of the fiscal year covered by this report.

P A R T  II

ITEM 5.	MARKET FOR REGISTRANT’S COMMON STOCK AND 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 American Stock Exchange with the symbols BIO and BIO.B, respectively.  The following sets forth, for the periods indicated, the high and low prices for our Class A and Class B Common Stock.

	Class A		Class B
	High	Low	High	Low
2005
Fourth Quarter	66.90	53.60	65.00	53.25
Third Quarter	62.52	51.02	61.75	52.00
Second Quarter	59.60	47.20	59.10	48.00
First Quarter	58.88	47.06	58.15	47.00
2004
Fourth Quarter	59.50	50.06	58.25	50.90
Third Quarter	58.50	50.01	57.25	50.25
Second Quarter	61.90	55.15	61.00	55.50
First Quarter	58.79	51.81	59.00	52.00

15

On February 15, 2006 we had 412 holders of record of Class A Common Stock and 191 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 for the security ownership of certain beneficial owners and management.

ITEM 6. SELECTED FINANCIAL DATA

The table headed "Summary of Operations and Selected Financial Data" appearing on page 1 of Exhibit 13.1 is incorporated herein by reference.

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

The section headed "Management's Discussion and Analysis of Results of Operations and Financial Condition" appearing on pages 35 through 47 of Exhibit 13.1 is incorporated herein by reference.

ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES
	ABOUT MARKET RISK

The section headed "Financial Risk Management" appearing on pages 46 and 47 of Exhibit 13.1 is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and Notes thereto and the Report of Independent Registered Public Accounting Firm appearing on pages 2 through 34 of Exhibit 13.1 are incorporated herein by reference.

ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
	ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, Bio-Rad carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.  Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective to provide reasonable assurance that material information relating to Bio-Rad is made known to management, including the Chief Executive Officer and Chief Financial Officer.

16

Changes in Internal Control Over Financial Reporting

There has been no change in our internal controls over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

Management’s Report on Internal Control Over Financial Reporting

The management of Bio-Rad Laboratories is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Securities and Exchange Act of 1934, as amended (the "Exchange Act").  Our internal control system is designed to provide reasonable assurance regarding the preparation and fair presentation of our financial statements presented in accordance with generally accepted accounting principles.

An internal control system over financial reporting has inherent limitations and may not prevent or detect misstatements.  Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management has used the framework set forth in the report entitled "Internal Control – Integrated Framework" published by the Committee of Sponsoring Organizations (COSO) of the Treadway Commission to evaluate the effectiveness of Bio-Rad’s internal control over financial reporting as of December 31, 2005.  Management has concluded our internal control over financial reporting was effective as of December 31, 2005.  Bio-Rad’s independent auditor, Deloitte & Touche LLP, has issued an attestation report on management’s assessment of Bio-Rad’s internal control over financial reporting.

17

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

Board of Directors and Stockholders

Bio-Rad Laboratories, Inc.
Hercules, California

We have audited management's assessment, included in the accompanying Management’s Report on Internal Control Over Financial Reporting, that Bio-Rad Laboratories, Inc. and subsidiaries (the “Company”), maintained effective internal control over financial reporting as of December 31, 2005, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting   Our responsibility is to express an opinion on management's assessment and an opinion on the effectiveness of the Company's internal control over financial reporting based on our audit.

We conducted our audit 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 effective internal control over financial reporting was maintained in all material respects.  Our audit included obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we considered necessary in the circumstances.  We believe that our audit provides a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.  A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

18

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis.  Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, management's assessment that the Company maintained effective internal control over financial reporting as of December 31, 2005, is fairly stated, in all material respects, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2005 of the Company and our report dated March 2, 2006 expressed an unqualified opinion on those financial statements and financial statement schedule.

/s/ Deloitte & Touche LLP

San Francisco, California

March 2, 2006

19

ITEM 9B. OTHER INFORMATION

None.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The sections labeled "Election of Directors" and "Section 16(a) Beneficial Ownership Reporting Compliance" of the definitive Proxy Statement mailed to stockholders in connection with the 2006 Annual Meeting of Stockholders (the "2006 Proxy Statement") are incorporated herein by reference.

Bio-Rad’s Board of Directors has determined that Philip L. Padou is an "audit committee financial expert," as defined in Item 401(h) of Regulation S-K.  Mr. Padou is also an "independent" director, as determined in accordance with the independence standards set forth in Rule 10A-3 under the Securities Exchange Act of 1934, as amended, and Section 121A of the American Stock Exchange Company Guide.

We have adopted a code of business ethics and conduct that applies to our principal executive officer, principal financial officer, principal accounting officer or controller and all other employees.  We will provide a copy of the code of ethics to any person, without charge, upon request, by writing to us at "Bio-Rad Laboratories, Inc., Investor Relations, 1000 Alfred Nobel Drive, Hercules, CA  94547."

ITEM 11. EXECUTIVE COMPENSATION

The sections labeled “Executive Compensation and Other Information,” “Compensation of Directors,” “Compensation Committee Interlocks and Insider Participation," "Report of the Compensation Committee of the Board of Directors" and "Stock Performance Graph" of the 2006 Proxy Statement are incorporated herein by reference.

20

ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
	AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The section labeled "Principal and Management Stockholders" of the 2006 Proxy Statement is incorporated herein by reference.

Plan category	(a) Number of securities  to be issued upon exercise of outstanding options,  warrants and rights	(b) Weighted-average exercise price of outstanding options, warrants  and rights	(c) Number of securities remaining available for future issuance  under equity compensation plans (excluding securities reflected in column (a))
Equity compensation plans approved by security holders (1)	1,537,253	$34.55	1,688,233	(2)
Equity compensation  plans not approved by stockholders	--	--	--
Total	1,537,253	$34.55	1,688,233

(1) Consists of the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan, the 2003 Stock Option Plan and the Bio-Rad Laboratories, Inc. Amended and Restated 1988 Employee Stock Purchase Plan.

(2) Consists of 1,100,468 shares available under the 2003 Stock Option Plan and 587,765 shares available for issuance under the Bio-Rad Laboratories, Inc. Amended and Restated 1988 Employee Stock Purchase Plan.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The sections labeled "Certain Relationships and Related Party Transactions" and "Compensation of Directors" of the 2006 Proxy Statement are incorporated herein by reference.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

The information required by this Item is incorporated by reference to the section entitled "Report of the Audit Committee of the Board of Directors" of the 2006 Proxy Statement.

21

P A R T  IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
(a) 1.	Index to Financial Statements
	The following Consolidated Financial Statements are included in Exhibit 13.1 and
	are incorporated herein by reference pursuant to Item 8:
		Page in
		Exhibit 13.1
	Consolidated Balance Sheets at December 31, 2005 and 2004	2-3
	Consolidated Statements of Income for each of the three years
	in the period ended December 31, 2005	4
	Consolidated Statements of Cash Flows for each of the
	three years in the period ended December 31, 2005	5
	Consolidated Statements of Changes in Stockholders' Equity
	for each of the three years in the period ended December 31, 2005	6
	Notes to Consolidated Financial Statements	7-33
	Report of Independent Registered Public Accounting Firm	34
2.	Index to Financial Statement Schedule
		Page in
		Form 10-K
	Schedule II Valuation and Qualifying Accounts	23
	Report of Independent Registered Public Accounting Firm	24
All other financial statement schedules are omitted because they are not required or because
the required information is included in the Consolidated Financial Statements or the Notes thereto.
3.	Index to Exhibits
The exhibits listed in the accompanying Index to Exhibits on pages 27  through 30 of this report
are filed or incorporated by reference as part of this report.

22

BIO-RAD LABORATORIES, INC.

SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS

Years Ended December 31, 2005, 2004 and 2003

(In thousands)

Reserve for doubtful accounts receivable

	Balance at Beginning of Year	Additions Charged to Costs and Expenses	Deductions	Other (A)	Balance at End of Year
2005	$ 13,406	$ 1,669	$ (1,774)	--	$ 13,301
2004	$ 12,978	$ 2,029	$    (621)	$   (980)	$ 13,406
2003	$ 12,122	$ 4,687	$ (3,831)	--	$ 12,978

(A)  Due to the sale of our confocal microscopy product line.

Valuation allowance for current and long-term deferred tax assets

	Balance at Beginning of Year	Additions	Deductions Charged to Costs and Expenses	Other	Balance at End of Year
2005	$ 18,023	$ 4,590	$ (4,876)	--	$ 17,737
2004	$ 21,446	$ 1,058	$ (4,481)	--	$ 18,023
2003	$ 17,215	$ 4,240	$        (9)	--	$ 21,446

23

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Bio-Rad Laboratories, Inc.
Hercules, California

We have audited the consolidated financial statements of Bio-Rad Laboratories, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005, management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2005, and the effectiveness of the Company's internal control over financial reporting as of December 31, 2005, and have issued our reports thereon dated March 2, 2006; such consolidated financial statements and reports are included in your 2005 Annual Report to Stockholders and are incorporated herein by reference.  Our audits also included the consolidated financial statement schedule of the Company listed in Item 15(a) 2.  This consolidated financial statement schedule is the responsibility of the Company's management.  Our responsibility is to express an opinion based on our audits.  In our opini on, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

/s/ Deloitte &Touche LLP

San Francisco, California

March 2, 2006

24

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BIO-RAD LABORATORIES, INC.
By:	/s/ Sanford S. Wadler
	Sanford S. Wadler
	Secretary
Date:	March 2, 2006

25

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Principal Executive Officer:
/s/ Norman Schwartz	President and Director	March 2, 2006
(Norman Schwartz)
Principal Financial Officer
/s/ Christine A. Tsingos___	Vice President,
(Christine A. Tsingos)	Chief Financial Officer	March 2, 2006
Principal Accounting Officer
/s/ James R. Stark________	Corporate Controller	March 2, 2006
(James R. Stark)
Other Directors:
/s/ James J. Bennett______	Director	March 2, 2006
(James J. Bennett)
/s/ Albert J. Hillman______	Director	March 2, 2006
(Albert J. Hillman)
/s/ Ruediger Naumann-Etienne	Director	March 2, 2006
(Ruediger Naumann-Etienne)
/s/ Philip L. Padou________	Director	March 2, 2006
(Philip L. Padou)
/s/ Alice N. Schwartz______	Director	March 2, 2006
(Alice N. Schwartz)
/s/ David Schwartz________	Director	March 2, 2006
(David Schwartz)

26

	BIO-RAD LABORATORIES, INC. INDEX TO EXHIBITS ITEM 14(a)3
Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be "filed under the Securities Exchange Act of 1934. "
Exhibit No.
3.1	Restated Certificate of Incorporation, as of February 8, 2002. (1)
3.1.1	Certificate of Amendment to Restated Certificate of Incorporation of
	Bio-Rad Laboratories, Inc., as of May 6, 2004. (2)
3.2	Bylaws of the Registrant, as amended February 19,1980. (3)
4.1	Credit Agreement dated as of September 9, 2003 among Bio-Rad
	Laboratories, Inc., the lenders, Bank One, N.A., as Administrative Agent,
	Wells Fargo Bank, N.A. and Union Bank of California, N.A., as
	Syndication Agents and ABN AMRO Bank N.V. and BNP Paribas, as
	Documentation Agents. (4)
4.1.1	Amendment No. 1 to Credit Agreement dated as of December 8, 2004
	among Bio-Rad Laboratories, Inc., the lenders referred to herein,
	JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA
	(Illinois)), as lender and Administrative Agent, Wells Fargo Bank, N.A. and
	Union Bank of California, N.A., as Syndication Agents and ABN AMRO
	Bank N.V. and BNP Paribas, as Documentation agents. (5)
4.2	Pledge Amendment dated as of September 9, 2003 among Bio-Rad
	Laboratories, Inc., and Bank One, N.A., as contractual representative. (4)
4.3	Security Agreement dated as of September 9, 2003 among Bio-Rad
	Laboratories, Inc., as Grantor and Bank One N.A., as Administrative
	Agent. (4)
4.4	Indenture dated as of August 11, 2003 for 7.50% Senior Subordinated
	Notes due 2013 among Bio-Rad Laboratories, Inc., as Issuer, and
	Wells Fargo Bank, N.A., as Trustee. (4)
4.5	The Exchange and Registration Rights Agreement dated as of August 11, 2003
	for 7.50% Senior Subordinated Notes due 2013. (4)
4.6	Indenture dated as of December 21, 2004, between Bio-Rad Laboratories, Inc.
	and Wells Fargo National Bank, as trustee. (6)

27

10.1	Amended and Restated Credit Agreement, dated as of June 21, 2005, by and
	among Bio-Rad Laboratories, Inc., the lenders referred to therein,
	JPMorgan Chase Bank, N.A. (successor by merger to Bank One, NA
	(Main Office Chicago)), as a lender and administrative agent, Wells Fargo
	Bank, N.A. and Union Bank of California N.A., as syndication agents and
	ABN AMRO Bank N.V. and BNP Paribas, as documentation agents. (7)
10.1.1	Amendment No. 1 to Amended and Restated Credit Agreement. (8)
10.2	Amended and Restated Security Agreement, dated as of June 21, 2005,
	between Bio-Rad Laboratories, Inc. and JPMorgan Chase Bank, N.A.
	(successor by merger to Bank One, NA (Main Office Chicago)), as
	administrative agent. (7)
10.3	Amended and Restated Pledge Agreement, dated as of June 21, 2005,
	between Bio-Rad Laboratories, Inc. and JPMorgan Chase Bank, N.A.
	(successor by merger to Bank One, NA (Main Office Chicago)), as
	administrative agent. (7)
10.4	1994 Stock Option Plan. (9)
10.4.1	Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan
	dated April 28, 1998. (10)
10.4.2	Second Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan
	dated December 6, 1999. (10)
10.4.3	Third Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan
	dated September 19, 2000. (10)
10.4.4	Fourth Amendment to the Bio-Rad Laboratories, Inc. 1994 Stock Option Plan
	dated April 25, 2001. (11)
10.5	Amended and Restated 1988 Employee Stock Purchase Plan. (12)
10.5.1	Amendment to the Amended 1988 Employee Stock Purchase Plan. (11)
10.6	Employees' Deferred Profit Sharing Retirement Plan (Amended and Restated
	effective January 1, 1997). (13)
10.7	2003 Stock Option Plan. (14)
10.10	Non-competition and employment continuation agreement with
	James J Bennett. (15)
10.13	Stock Purchase Agreement dated as of August 16, 2004 by and between
	Bio-Rad, MJ GeneWorks, Incorporated, Michael J. Finney and John D.
	Finney, excluding exhibits and schedules.  Pursuant to Regulation S-K
	Item 601(b)(2), the exhibits and schedules to this agreement have not
	been filed.  We agree to furnish supplementally a copy of any omitted
	exhibits or schedules to the SEC upon request.  We have requested
	confidential treatment of certain portions of this agreement. (16)
13.1	Excerpt from Annual Report to Stockholders' for the fiscal year ended
	December 31, 2005 (to be deemed filed only to the extent required by the
	instructions to exhibits for reports on Form 10-K).
21.1	Listing of Subsidiaries.
23.1	Consent of Independent Registered Public Accounting Firm.
31.1	Certification of Chief Executive Officer Required by Rule 13a-14(a)
	(17CFR 240.13a-14(a)).
31.2	Certification of Chief Financial Officer Required by Rule 13a-14(a)
	(17CFR 240.13a-14(a)).
32.1	Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section
	1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
	2002.
32.2	Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section
	1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
	2002.
(1)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 10-K filing for
	the fiscal year ended December 31, 2001, dated March 28, 2002.
(2)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 10-K filing
	for the fiscal year ended December 31, 2004, dated March 3, 2005.
(3)	Incorporated by reference from the Exhibits to Bio-Rad’s Registration
	Statement on Form S-7 Registration No. 2-66797, which became
	effective April 22, 1980.
(4)	Incorporated by reference from the Exhibits to Bio-Rad’s Form S-4 dated
	September 19, 2003.
(5)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 8-K filing dated
	December 14, 2004.

28

(6)	Incorporated by reference from the Exhibits to Bio-Rad’s Form S-8 filing, dated
	December 22, 2004.
(7)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 8-K filing, dated
	June 24, 2005.
(8)	Incorporated by reference from the Exhibits to Bio-Rad’s September 30, 2005
	10-Q filing, dated November 8, 2005
(9)	Incorporated by reference from the Exhibits to Bio-Rad’s Form S-8 filing, dated
	April 29, 1994.
(10)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 10-K filing for
	the fiscal year ended December 31, 2000, dated March 28, 2001.
(11)	Incorporated by reference from the Exhibits to Bio-Rad’s Form 10-K filing for
	the fiscal year ended December 31, 2003, dated March 15, 2004.
(12)	Incorporated by reference from the Exhibits to Bio-Rad’s September 30, 1998,
	Form 10-Q filing, dated November 12, 1998.
(13)	Incorporated by reference from the Exhibits to Bio-Rad’s September 30, 1997,
	Form 10-Q filing, dated November 13, 1997.
(14)	Incorporated by reference from the Exhibits to Bio-Rad’s March 31, 2003,
	Form 10-Q filing, dated May 13, 2003.
(15)	Incorporated by reference from the Exhibits to Bio-Rad’s June 30, 1997
	Form 10-Q filing, dated March 27, 1997.
(16)	Incorporated by reference from the Exhibits to Bio-Rad’s September 30, 2004
	Form 10-Q filing, dated November 9, 2004.

29

EX-13

			Exhibit 13.1
Bio-Rad Laboratories, Inc.
Summary of Operations and Selected Financial Data (in thousands, except per share data)
	2005	2004		2003	2002	2001
Net sales	$ 1,180,985	$  1,090,012		$   979,631	$   865,006	$   789,639
Cost of goods sold	534,499	479,939		423,401	365,451	345,964
Gross profit	646,486	610,073		556,230	499,555	443,675
Selling, general and administrative expense	416,084	378,264		317,524	281,579	257,684
Product research and development expense	115,104	108,344		91,273	79,788	73,922
Purchased in-process research and development expense	--	14,620		--	--	--
Impairment losses on long-lived assets	19,770	--		--	--	--
Goodwill amortization	--	--		--	--	7,746
Loss on divestitures	--	--		--	--	5,150
Interest expense	32,643	20,219		31,006	28,207	24,088
Foreign exchange (gains) losses	(1,528)	2,394		4,080	5,441	2,097
Other (income) expense, net (1)	(28,958)	(11,095)		(3,012)	(678)	10,031
Income from continuing operations before taxes	93,371	97,327		115,359	105,218	62,957
Provision for income taxes	(15,792)	(31,035)		(38,055)	(36,692)	(20,132)
Income from continuing operations	77,579	66,292		77,304	68,526	42,825
Discontinued operations
Gain (loss) from discontinued operations (net of tax)	--	(1,487)		(1,133)	(663)	1,354
Gain on divestiture (net of tax)	3,974	3,437		--	--	--
Total income (loss) from discontinued operations	3,974	1,950		(1,133)	(663)	1,354
Net income	$       81,553	$       68,242		$    76,171	$    67,863	$    44,179
Basic earnings per share:
Continuing operations	$           2.98	$           2.58		$         3.04	$         2.73	$         1.74
Discontinued operations	0.15	0.07		(0.04)	(0.03)	0.05
Basic earnings per share	$           3.13	$           2.65		$         3.00	$         2.70	$         1.79
Diluted earnings per share:
Continuing operations	$           2.91	$           2.51		$         2.94	$         2.63	$         1.68
Discontinued operations	0.15	0.07		(0.04)	(0.02)	0.06
Diluted earnings per share	$           3.06	$           2.58		$         2.90	$         2.61	$         1.74
Cash dividends paid per common share	--	--		--	--	--
Total assets	$  1,426,582	$  1,371,618		$   992,596	$   720,703	$   684,028
Long-term debt, net of current maturities	$     425,687	$     425,979		$   225,835	$   105,768	$   188,423

(1) See Note 11 to the consolidated financial statements for components of Other (income) expense, net.  Included in 2001 is a $9.4 million write-down of an investment.  Included in 2004 is interest and investment income of $6.6 million, income from equity investee of $3.1 million and a litigation settlement of $1.9 million offset by a $2.4 million write-down of an investment.  Included in 2005 is interest and investment income of $16.7 million, gains on sales of investments of $11.2 million, and litigation expense of $1.2 million.

1

Bio-Rad Laboratories, Inc.

Consolidated Balance Sheets
(in thousands)
	December 31,
		2005	2004
ASSETS
Current assets:
Cash and cash equivalents		$      296,716	$      195,734
Restricted cash		36,138	--
Short-term investments		116,343	165,899
Accounts receivable less allowance of
$13,301 in 2005 and $13,406 in 2004		247,192	261,243
Inventories, net:
Raw materials		48,271	44,950
Work in process		51,601	48,206
Finished goods		112,470	112,356
Total inventories		212,342	205,512
Deferred tax assets		30,984	25,727
Prepaid expenses and other current assets		68,496	54,345
Total current assets		1,008,211	908,460
Property, plant and equipment:
Land and improvements		9,837	9,959
Buildings and leasehold improvements		120,015	119,433
Equipment		322,354	321,215
Total property, plant and equipment		452,206	450,607
Accumulated depreciation		(271,948)	(248,283)
Property, plant and equipment, net		180,258	202,324
Goodwill		113,276	113,276
Purchased intangibles, net		28,449	58,638
Long-term deferred tax assets		14,003	6,160
Other assets		82,385	82,760
TOTAL ASSETS		$   1,426,582	$   1,371,618

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

2

Bio-Rad Laboratories, Inc.

Consolidated Balance Sheets
(in thousands, except share data)
	December 31,
	2005	2004
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$          72,950	$          71,194
Accrued payroll and employee benefits	81,076	79,061
Notes payable	2,950	9,055
Current maturities of long-term debt	391	402
Sales, income and other taxes payable	15,841	15,835
Litigation accrual	55,701	50,000
Accrued royalties	34,386	39,317
Other current liabilities	55,948	50,511
Total current liabilities	319,243	315,375
Long-term debt, net of current maturities	425,687	425,979
Deferred tax liabilities	2,281	4,388
Other long-term liabilities	21,397	28,988
Total liabilities	768,608	774,730
Commitments and contingent liabilities	--	--
Stockholders’ equity:
Preferred stock, $0.0001 par value, 7,500,000
shares authorized; none outstanding	--	--
Class A common stock, $0.0001 par value, 80,000,000 shares
authorized; outstanding - 21,316,556 at 2005; 50,000,000 shares
authorized; outstanding - 20,997,568 at 2004	2	2
Class B common stock, $0.0001 par value,
20,000,000 shares authorized; outstanding
2005 - 4,909,908; 2004 - 4,836,540	1	1
Additional paid-in capital	60,112	49,628
Retained earnings	570,807	489,254
Accumulated other comprehensive income:
Currency translation and other	27,052	58,003
Total stockholders’ equity	657,974	596,888
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$     1,426,582	$     1,371,618

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

3

Bio-Rad Laboratories, Inc. Consolidated Statements of Income (in thousands, except per share data)
	Year Ended December 31,
		2005	2004	2003
Net sales		$    1,180,985	$  1,090,012	$    979,631
Cost of good sold		534,499	479,939	423,401
Gross profit		646,486	610,073	556,230
Selling, general and administrative expense		416,084	378,264	317,524
Product research and development expense		115,104	108,344	91,273
Purchased in-process research and development expense		--	14,620	--
Impairment losses on long-lived assets		19,770	--	--
Interest expense		32,643	20,219	31,006
Foreign exchange losses		(1,528)	2,394	4,080
Other income, net		(28,958)	(11,095)	(3,012)
Income from continuing operations before taxes		93,371	97,327	115,359
Provision for income taxes		(15,792)	(31,035)	(38,055)
Income from continuing operations		77,579	66,292	77,304
Discontinued operations
Loss from discontinued operations net of tax benefits
of $532 in 2004 and $538 in 2003		--	(1,487)	(1,133)
Gain on divestiture net of tax expense of $0 in 2005
and $2,295 in 2004		3,974	3,437	--
Total income (loss) from discontinued operations		3,974	1,950	(1,133)
Net income		$        81,553	$       68,242	$     76,171
Basic earnings per share:
Continuing operations		$            2.98	$           2.58	$         3.04
Discontinued operations		0.15	0.07	(0.04)
Net income		$            3.13	$           2.65	$         3.00
Weighted average common shares		26,063	25,724	25,416
Diluted earnings per share:
Continuing operations		$            2.91	$           2.51	$         2.94
Discontinued operations		0.15	0.07	(0.04)
Net income		$            3.06	$           2.58	$         2.90
Weighted average common shares		26,662	26,489	26,310
The accompanying notes are an integral part of these consolidated financial statements.

4

Bio-Rad Laboratories, Inc.

Consolidated Statements of Cash Flows

(in thousands)
	Year Ended December 31,
		2005	2004	2003
Cash flows from operating activities:
Cash received from customers		$   1,166,711	$  1,087,946	$ 1,020,135
Cash paid to suppliers and employees		(1,003,264)	(920,606)	(826,055)
Interest paid		(31,334)	(19,543)	(17,088)
Income tax payments		(39,597)	(33,637)	(51,280)
Miscellaneous receipts		15,768	8,933	1,928
Net cash provided by operating activities		108,284	123,093	127,640
Cash flows from investing activities:
Capital expenditures, net		(36,055)	(60,493)	(69,003)
Payments for acquisitions and investments		(4,344)	(58,983)	(16,375)
Proceeds from divestiture		--	19,775	--
Payments for purchase of intangible assets		(5,000)	(10,000)	--
Purchases of marketable securities and investments		(873,822)	(2,257,694)	(600,000)
Sales of marketable securities and investments		942,790	2,174,538	510,135
Foreign currency economic hedges, net		6,397	6,539	(14,998)
Restricted cash		(36,138)	--	--
Net cash used in investing activities		(6,172)	(186,318)	(190,241)
Cash flows from financing activities:
Net borrowings (payments) on notes payable		(6,847)	(9,580)	435
Long-term borrowings		--	200,000	249,335
Payments on long-term debt		(447)	(1,781)	(132,012)
Debt retirement costs on 11-5/8% bonds		--	--	(9,467)
Debt issuance costs on 7.5% bonds		--	--	(5,431)
Debt issuance costs on 6.125% bonds		(331)	(2,876)	--
Proceeds from issuance of common stock		8,915	7,464	5,309
Net cash provided by financing activities		1,290	193,227	108,169
Effect of exchange rate changes on cash		(2,420)	337	(7,906)
Net increase in cash and cash equivalents		100,982	130,339	37,662
Cash and cash equivalents at beginning of year		195,734	65,395	27,733
Cash and cash equivalents at end of year		$      296,716	$    195,734	$      65,395

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

5

Bio-Rad Laboratories, Inc

Consolidated Statements of Changes in Stockholders’ Equity

(in thousands)

	2005	2004	2003
Common Stock, $0.0001 par value:
Balance at beginning of year	$              3	$            3	$              3
Issuance of common stock	--	--	--
Balance at end of year	3	3	3
Additional Paid-In Capital:
Balance at beginning of year	49,628	42,164	36,141
Issuance of common stock	8,916	6,250	5,309
Tax benefit from exercise of stock options	1,568	1,214	714
Balance at end of year	60,112	49,628	42,164
Retained Earnings:
Balance at beginning of year	489,254	421,012	344,841
Net income	81,553	68,242	76,171
Balance at end of year	570,807	489,254	421,012
Accumulated Other Comprehensive Income (Loss):
Balance at beginning of year	58,003	32,628	2,102
Other comprehensive income (loss)	(30,951)	25,375	30,526
Balance at end of year	27,052	58,003	32,628
Total Stockholders’ Equity	$   657,974	$ 596,888	$   495,807
Comprehensive Income, net of tax:
Net income	$     81,553	$   68,242	$     76,171
Currency translation adjustments	(30,535)	18,573	28,620
Net unrealized holding gains net of tax of $999
in 2005, $3,870 in 2004 and $1,053 in 2003	41	8,096	2,137
Reclassification adjustments for gains included in net income
net of tax of $271 in 2005, $623 in 2004 and $108 in 2003	(457)	(1,294)	(231)
Total Comprehensive Income	$     50,602	$   93,617	$   106,697

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

6

Bio-Rad Laboratories, Inc.

Notes to Consolidated Financial Statements

________________________________________________________________

1. SIGNIFICANT ACCOUNTING POLICIES

BASIS OF PRESENTATION

The consolidated financial statements include the accounts of Bio-Rad Laboratories, Inc. and all 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 accounting principles generally accepted in the United States of America 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.

RECLASSIFICATIONS

Certain amounts included in the balance sheet as of December 31, 2004, as well as in the Statement of Cash Flows for the years ended December 31, 2004 and 2003, have been reclassified to conform to the current year presentation.  Amounts related to deferred taxes are discussed in Note 8.

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 market value.

RESTRICTED CASH

Restricted cash of $36.1 million represents deposits in a money market account that have been used as collateral to protect the surety company in connection with its execution of a surety bond in the amount of $37.2 million to stay the enforcement of the judgment in the legal matter described in Note 14.

SHORT-TERM INVESTMENTS

Short-term investments consist of corporate, state and municipal securities with readily determinable fair market values and original maturities in excess of three months. Investments with maturities beyond one year may be classified as short-term based on their highly liquid nature and because such marketable securities represent the investment of cash that is available for current operations. Our investments are classified as “Available-for-sale” and accordingly are reported at fair value, with unrealized gains and losses, if material, reported as a component of stockholder’s equity, net of any related tax effect. Unrealized losses are charged against income when a decline in the fair market value of an individual security is determined to be other than temporary. Realized gains and losses on investments are included in interest income.

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CONCENTRATION OF CREDIT RISK

Financial instruments that potentially subject us to concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and trade accounts receivable.  Cash and cash equivalents and short-term investments are placed with highly rated major financial institutions.  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 these developing countries, some Bio-Rad sales are subject to collateral letters of credit.  Credit risk is limited generally 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 Economic Community.  We do not currently anticipate a credit risk associated wi th these receiv­ables.

ALLOWANCE FOR DOUBTFUL ACCOUNTS

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. This valuation allowance is reviewed quarterly to determine whether a change is warranted.

INVENTORY VALUATION

Inventories are valued at the lower of actual cost or market and include material, labor and overhead costs.  Management reviews the need for an inventory obsolescence reserve on a quarterly basis or, if warranted by circumstances, more frequently.  In evaluating this reserve, technology changes, competition, customer demand and manufacturing quality are considered.

PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are carried at historical cost. Included in property, plant and equipment is reagent rental equipment.  We provide these instruments to our customers for use with our reagents.  Property, plant and equipment are assessed for impairment annually 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 lives of the leases or improvements, whichever is shorter.  With the exception of reagent rental equipment, which is amortized over a 1-3 year period, equipment is depreciated over 3-12 years.

Net capital expenditures include proceeds from the sale of property, plant and equipment of $3.2 million, $0.8 million and $1.1 million for the years ended December 31, 2005, 2004, and 2003, respectively.

8

GOODWILL

Goodwill, representing the excess of the cost over the net tangible and identifiable intangible assets of acquired businesses, is stated at cost.  Goodwill is assessed for impairment by applying a fair-value based test annually or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable (see Note 6).

INCOME TAXES

We account for income taxes under the asset and liability method which recognizes deferred tax assets and liabilities for the expected future tax consequences of temporary differences between carrying amounts and tax basis of assets and liabilities (see Note 8).

REVENUE RECOGNITION

Revenue is recognized when pervasive evidence of an arrangement exists, the price to the buyer is fixed and determinable, collectibility is reasonably assured and title has passed to the customer or product has been delivered absent specific contractual specifications.  Equipment that requires factory installation is not recorded until installation is complete and customer acceptance, if required contractually, has occurred.  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 have evaluated the reagent agreements and account for the contracts under the terms of the guidance set forth in EITF 00-21, Accounting for Revenue Arrangements with Multiple Deliverables.  All revenues that we earn under our reagent agreements are recognized when the reagent has been delivered to th e 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 billed to customers as net sales.  Related freight costs are included in cost of goods sold.

SALES RETURNS AND WARRANTY

At the time the related revenue is recognized, a provision is recognized for estimated product returns.

We warrant certain equipment against defects in design, materials and workmanship, generally for a period of one year.  Upon shipment 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 reserve.

9

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

			2005	2004
	January 1		$          10.1	$           9.1
	Provision for warranty		13.3	10.4
	Actual warranty costs		(11.4)	(9.4)
December 31		$          12.0		$         10.1

RESEARCH AND DEVELOPMENT

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 are expensed at the time of purchase.

FOREIGN CURRENCY

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

Foreign currency transaction gains and losses are included in foreign exchange (gains) losses in the consolidated statement 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 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.  In accordance with Statement of Financial Accounting Standards (SFAS) 133, Accounting for Derivative Instruments and Hedging Activities, 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 resulting gains or losses offset exchange gains or losses on the related receivables and payables, both of which are recorded as foreign exchange (gains) losses in the consolidated statement of income.  The cash flows related to these contracts are classified as cash flows from investing activities in the Statement of Cash Flows.

10

EMPLOYEE STOCK COMPENSATION PLANS

We maintain incentive and non-qualified stock option plans for officers and certain other key employees.  We also have an employee stock purchase plan that provides that eligible employees may contribute toward the purchase of our Class A common stock. These plans are described more fully in Note 10.

Had compensation cost for our stock option and stock purchase plans been accounted for under SFAS 123, Accounting for Stock-Based Compensation, based on the assumptions and methods outlined in Note 10, our proforma net income and earnings per share would have been as follows (in millions, except per share data):

	Year Ended December 31,
		2005	2004	2003
Net income, as reported		$     81.6	$    68.2	$    76.2
Deduct: Total stock-based employee compensation
expense determined under fair value methods
for all awards, net of related tax effects		(3.4)	(3.0)	(2.1)
Pro forma net income		$     78.2	$    65.2	$    74.1
Earnings per share:
Basic-as reported		$     3.13	$    2.65	$    3.00
Basic-pro forma		$     3.00	$    2.54	$    2.91
Diluted-as reported		$     3.06	$    2.58	$    2.90
Diluted-pro forma		$     2.93	$    2.47	$    2.82

EARNINGS PER SHARE

Basic earnings per share is computed by dividing net income (loss) 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 uses the average share price for the period in determining the number of common stock equivalents that are to be added to the weighted average number of shares outstanding.  Common stock equivalents are excluded from the diluted earnings per share calculation if the effect would be anti-dilutive.

11

Weighted average shares used for diluted earnings per share include the dilutive effect of outstanding stock options to purchase 599,000, 765,000 and 894,000 shares for the years ended December 31, 2005, 2004 and 2003, respectively.  Options to purchase 281,000 and 10,000 shares of common stock were outstanding for the years ended December 31, 2005 and 2004, respectively, but were excluded from the computation of diluted earnings per share because the price of the options was greater than the average market price of the common shares.  There were no anti-dilutive options for the year ended December 31, 2003.

FAIR VALUE OF FINANCIAL INSTRUMENTS

The estimated fair value of financial instruments 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.

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

	Year Ended December 31,
	2005			2004
		Carrying	Fair		Carrying	Fair
		Amount	Value		Amount	Value
Notes receivable and other		$   82.4	$  113.4		$   80.0	$  104.2
Total long-term debt		$ 426.1	$  430.6		$ 426.4	$  450.5

Financial instruments (e.g., notes receivable) that have fair values based on discounted cash flows, market quotations, and other appropriate valuation techniques are included in Other assets.  Long-term debt has an estimated fair value based on quoted market prices for the same or similar issues.

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

NEW FINANCIAL ACCOUNTING STANDARDS

In June 2005, the Financial Accounting Standards Board (FASB) issued Staff Position (“FSP”) No. 143-1, “Accounting for Electronic Equipment Waste Obligations,” which provides guidance on accrual accounting for historical waste obligations associated with the European Union Waste, Electrical and Electronic Equipment Directive (“WEEE Directive”).  FSP No. 143-1 is effective for the first reporting period ending after June 8, 2005 or the date of the adoption of the WEEE Directive into law by the applicable European Union member country.  Because European Union member countries have not yet, among other steps, (i) fully enacted their national laws relating to WEEE, (ii) completed implementation of their administrative measures and programs, (iii) clarified the scope of products considered WEEE, and/or (iv) established pricing for recycling of WEEE, we cannot at this time reasonably estimate t he effect of applying this guidance in future periods.  However, we continue to monitor WEEE developments in the respective EU countries in an effort to determine the financial statement impact, if any, of this directive.

12

In May 2005, the FASB issued SFAS 154, Accounting Changes and Error Corrections — A Replacement of APB Opinion No. 20 and FASB Statement No. 3. SFAS 154 replaces APB Opinion No. 20, Accounting Changes and FASB Statement No. 3, Reporting Accounting Changes in Interim Financial Statements, and changes the requirement for the accounting for and reporting of a change in accounting principle.  APB No. 20 previously required that most voluntary changes in accounting principle be recognized by including in net income of the period of the change the cumulative effect of changing to the new accounting principle.  SFAS 154 requires retrospective application to prior periods’ financial statements for voluntary changes in accounting principle.  SFAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December&n bsp;15, 2005.

In December 2004, the FASB issued SFAS 123(R), Share-Based Payment, which is a revision of SFAS 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees. SFAS 123(R) requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards in their financial statements. Pro forma disclosure is no longer an alternative under the new standard. SFAS 123(R) will also require the benefits associated with tax deductions in excess of recognized compensation cost to be reported as a financing cash flow rather than as an operating cash flow as currently required.

Bio-Rad has adopted the provisions of SFAS 123(R) beginning January 1, 2006 and will continue to evaluate the impact of SFAS 123(R) on the consolidated financial statements as it begins recognizing compensation expense for the unvested portion of awards granted prior to adoption and for new awards granted subsequent to adoption. Bio-Rad has elected to use the “modified prospective” transition method under SFAS 123(R) in the first quarter of 2006. Under the “modified prospective” method, compensation cost for the unvested portion of previously granted awards and all new awards will be recognized on or after the date of adoption. The compensation cost related to unvested awards at the date of adoption is based on the grant-date fair value of those awards as calculated for pro forma disclosures under the original SFAS 123 as adjusted for the effect of estimated forfeiture rates. We will recognize compensation cost for stock-based awards issued after December 31, 2005 on a straight-line basis over the requisite service period for the entire award. The new standard will result in increased compensation expense.

2. ACQUISITIONS

In August 2004, we acquired the outstanding shares of MJ GeneWorks, Inc. and its subsidiaries, a life science company specializing in instruments and consumables used in modern biological research.  The total purchase price of $90.0 million included $7.0 million of net tangible assets, $40.5 million of goodwill and $42.5 million of intangible assets.  We paid $31.0 million in cash and assumed liabilities including $9.0 million in notes payable and capital leases and a $50.0 million litigation accrual (see Note 14).  Acquired in-process research and development of $13.7 million was charged to expense in the third quarter of 2004.  The allocation of the total purchase price to net tangible assets, goodwill and other intangible assets has been recorded at their fair market value based upon management estimates and third-party valuations.  We included these operations in our Life Science segment.

13

In March 2004, we purchased for cash the controls business of Hematronix, Inc. of Plano, Texas.  Bio-Rad acquired tangible and intangible assets and assumed certain liabilities for approximately $17 million.  Acquired in-process research and development of $0.9 million was charged to expense in the first quarter of 2004.  We included these operations in our Clinical Diagnostics segment.

3. SHORT-TERM INVESTMENTS

Short-term investments consist of the following (in millions):

	December 31,
		2005	2004
Available-for-sale securities:
Auction rate securities		$       3.9	$     146.5
Certificate of deposit		--	4.0
Variable rate notes		8.7	8.4
U.S Agencies		25.5	7.0
Asset backed securities		36.6	--
Corporate obligations		31.4	--
Other		10.2	--
Total short-term investments		$    116.3	$     165.9

Management classifies investments in marketable securities at the time of purchase and reevaluates such classification at each balance sheet date. Securities classified as Available-for-sale are stated at fair value which approximates cost.  As of December 31, 2005, the short-term investments will mature within one year.

4. INVESTMENTS

We own shares of ordinary voting stock of Sartorius AG, of Goettingen, Germany, a process technology supplier to the biotechnology, pharmaceutical, chemical and food and beverage industries.  We purchased shares in 2005 and 2004 for approximately $4 and $11 million, respectively, bringing our total investment to approximately 26% of the outstanding voting shares of Sartorius at December 31, 2005.  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 any other influence over the operating and financial policies of Sartorius.  Therefore, we account for this investment using the cost method.

14

In December 1997, we began investing in Instrumentation Laboratory, S.p.A. (IL), an Italian based clinical diagnostics company.  A privately held company based in Spain controls the majority of the outstanding stock of IL.  As of December 31, 2004, we valued our investment in IL at $4.0 million which reflects a $2.4 million write-down recorded in Other income, net.  In October 2005, Bio-Rad entered into an agreement to sell all its shares back to IL.  We received cash of $12.0 million and recorded in Other income, net, a pre-tax gain of $7.9 million (see Note 11).

On July 26, 2005, BioSource International, Inc. (BioSource) announced in a press release that it had entered into a definitive merger agreement under which Invitrogen Corporation will acquire BioSource for $12.50 per share in cash.  In October 2005, we tendered our shares of BioSource to Invitrogen Corporation for $12.50 per share in cash and received cash of $8.3 million.  We recorded in Other income, net, a pre-tax gain of $3.3 million (see Note 11).

5. DISCONTINUED OPERATIONS

On May 31, 2004, we sold a group of assets and transferred certain liabilities that comprise a substantial portion of our confocal microscopy product line to Carl Zeiss Jena GmbH. Proceeds of $19.8 million were offset by net assets of $5.7 million, lease settlements of $6.7 million and severance, legal and other costs of $1.7 million resulting in a pre-tax gain of $5.7 million.  As required by SFAS 144, Accounting for the Impairment or Disposal of Long-Lived Assets, with the disposition of this asset group, the sales and expenses related to this product line for current and prior periods have been reclassified as a separate line on the income statement titled “Discontinued Operations.”

During 2005, Bio-Rad reached an agreement to settle the $6.7 million lease commitment and revised our lease settlement estimate to $2.7 million to exit the facility in 2005.  Consequently, we recognized a $4.0 million gain on the revised disposition.

There were no sales or pre-tax operating losses attributable to the discontinued operations for the year ended December 31, 2005.  The discontinued operations generated net sales of $6.3 million and $23.8 million for the years ended December 31, 2004 and 2003, respectively.  The pre-tax operating losses attributable to the discontinued operations for the years ended December 31, 2004 and 2003 were $2.0 million, and $1.7 million, respectively.

15

6. GOODWILL AND OTHER PURCHASED INTANGIBLE ASSETS

In March 2005, we purchased the rights to certain patents for $1.0 million.  In June 2004, we purchased $14.0 million of intangible assets related to licensing agreements.  We paid $6.0 million upon acquisition and $4.0 million in the third quarter of 2004.  The remaining $4.0 million was paid in 2005.  These intangibles are part of our Clinical Diagnostics segment.

As part of the acquisition of MJ GeneWorks, Inc. and its subsidiaries in August 2004 (see Note 2), we added $40.5 million of goodwill and $42.5 million of intangible assets including $13.7 million of in-process research and development and $22.5 million of developed technology.  During the fourth quarter of 2005, $19.8 million of impairment losses related to intangible and long-lived assets were recorded in the Life Science segment.  Of these losses, $15.8 million related to intangible and tangible assets acquired from MJ Geneworks (MJ).  The circumstance leading to the impairment was the November 10, 2005 recommended ruling of the Connecticut Federal District Court that it would not enforce the August 30, 2005 settlement between Bio-Rad, Applera and Roche (see Note 14).  As a result of this decision Bio-Rad continued to be barred from selling, servicing or marketing MJ thermal cyclers and real time polymerase chai n reaction (PCR) equipment in the United States.  The asset group impaired included fixed assets at the Massachusetts manufacturing location making the MJ cyclers along with intangible assets related to developed technology, U.S. customer mailing lists, trade names and non-compete agreements.  The determination of fair value was calculated converting estimated future cash flows to their present value, using the rate of return expected by an investor for an investment with similar perceived risk.

Additionally, $4.0 million of intangible and tangible assets related to our microarray product line manufactured in Waterloo, Canada were impaired.  In the fourth quarter, we decided to close the plant and no longer manufacture the products that related to the specific patents purchased from Virtek in 2002.  Bio-Rad has developed new microarray products that do not use the technology covered in the patents.  The discontinued products covered by the patents will have negligible sales and cash flow in 2006 and beyond.

As part of the acquisition of the controls business of Hematronix, Inc. in March 2004 (see Note 2) we added $3.2 million of goodwill and $9.3 million of intangible assets including in-process research and development.

Goodwill balances have been included in corporate for segment reporting purposes in Note 15.

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

	December 31, 2005
	Average	Carrying	Accumulated
	Useful Life	Amount	Amortization	Net
Developed Product Technology	2	$        9.2	$       1.4	$      7.8
Licenses	8	14.0	1.3	12.7
Know How	6	8.7	3.7	5.0
Covenants Not to Compete	2	2.0	0.7	1.3
Patents	4	1.0	--	1.0
Customer Lists	1	0.6	0.2	0.4
Other	3	2.2	2.0	0.2
		$      37.7	$      9.3	$    28.4

	December 31, 2004
	Average	Carrying	Accumulated
	Useful Life	Amount	Amortization	Net
Developed Product Technology	11	$        28.3	$      2.5	$   25.8
Licenses	16	14.1	0.4	13.7
Know How	8	9.9	2.8	7.1
Covenants Not to Compete	10	6.1	0.6	5.5
Patents	16	4.6	0.7	3.9
Customer Lists	6	1.7	0.3	1.4
Other	2	2.9	1.7	1.2
		$        67.6	$      9.0	$    58.6

Recorded purchased intangible asset amortization expense for the years ended December 31, 2005, 2004 and 2003 was $11.0 million, $6.9 million and $1.3 million, respectively.  Estimated purchased intangible asset amortization expense (based on existing intangible assets) for the years ended December 31, 2006, 2007, 2008, 2009, and 2010 is $5.3 million, $5.2 million, $4.4 million, $3.2 million and $1.9 million, respectively.

7. NOTES PAYABLE AND LONG-TERM DEBT

Notes payable include local credit lines maintained by our subsidiaries aggregating approximately $34.1 million, of which $30.8 million was unused at December 31, 2005.  At December 31, 2004 these lines aggregated approximately $62.3 million, of which $53.1 million was unused.  The weighted average interest rate on these lines was 8.3% and 6.8% at December 31, 2005 and 2004, respectively.  Bio-Rad Laboratories, Inc. guarantees most of these credit lines.

In June 2005, Bio-Rad entered into a new Credit Agreement, which amends and restates the Credit Agreement dated September 9, 2003, as amended December 8, 2004.  Borrowings are permitted up to a maximum of $150.0 million on a revolving basis and can be used to make acquisitions, for working capital and other general corporate purposes.  Borrowings under this line of credit carry a floating rate of interest based on a reference rate dictated by the type of borrowing plus the applicable margin.  Under certain conditions, the Credit Agreement may be increased up to an additional $50 million and will mature on June 21, 2010.

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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 foreign subsidiaries.  It is guaranteed by all of our existing and future domestic subsidiaries (other than immaterial domestic subsidiaries as defined for purposes of the Credit Agreement).

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

	December 31,
		2005	2004
7.5% Senior Subordinated Notes		$   225.0	$   225.0
6.125% Senior Subordinated Notes		200.0	200.0
Capitalized leases		1.1	1.4
		426.1	426.4
Less current maturities		(0.4)	(0.4)
Long-term debt		$   425.7	$   426.0

In December 2004, Bio-Rad sold $200.0 million principal amount of Senior Subordinated Notes due 2014 (6.125% Notes).  The notes pay a fixed rate of interest of 6.125% per year.  Upon any sale of our common stock, we have the right to repurchase up to 35% of the 6.125% Notes any time prior to December 15, 2007 at a specified redemption price plus accrued and unpaid interest and certain other charges.  Furthermore, we have the option to redeem any or all of the 6.125% Notes at various declining redemption prices or at 100% of the principal amount plus the “applicable premium” (as defined by the indenture) along with accrued and unpaid interest and certain other charges depending on the date redeemed.  Bio-Rad’s obligations under the 6.125% Notes are not secured, rank equal to other senior subordinated notes and rank junior to all Bio-Rad’s existing and future senior debt.

In August 2003, Bio-Rad sold $225.0 million principal amount of Senior Subordinated Notes due 2013 (7.5% Notes).  The notes pay a fixed rate of interest of 7.5% per year.  Upon any sale of our common stock, we have the right to repurchase up to 35% of the 7.5% Notes any time prior to August 15, 2006 at a specified redemption price plus accrued and unpaid interest and certain other charges.  Furthermore, we have the option to redeem any or all of the 7.5% Notes at various declining redemption prices or at 100% of the principal amount plus the “applicable premium” (as defined by the indenture) along with accrued and unpaid interest and certain other charges depending on the date redeemed.  Bio-Rad’s obligations under the 7.5% Notes are not secured, rank equal to other senior subordinated notes and rank junior to all Bio-Rad’s existing and future senior debt.

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In 2002 and through July of 2003, Bio-Rad repurchased in the open market $17.3 million (par value) of its Senior Subordinated Notes due in 2007 (11.675% Notes) at an expense, including interest, unamortized issue costs and unamortized original issue discount of $2.5 million.  The remaining $88.7 million (par value) of 11.675% Notes were tendered and repurchased with a portion of the proceeds from the sale of the 7.5% Notes at an expense, including interest, unamortized issue costs and unamortized original discount, of $11.6 million. This expense was included in interest expense.

The Credit Agreement, the 6.125% Notes, and the 7.5% Notes require Bio-Rad to comply with certain financial ratios and covenants, among other things.  The covenants include a leverage ratio test, an interest coverage test and a consolidated net worth test.  There are also 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 financial ratios as of December 31, 2005 and 2004.

Maturities of long-term debt at December 31, 2005 are as follows: 2006 - $0.4 million; 2007 - $0.4 million; 2008 - $0.2 million; 2009 - $0.1 million; 2010 - $0.0 million; thereafter - $425.0 million.

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8. INCOME TAXES

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

	Year Ended December 31,
	2005	2004	2003
U.S.	$    35.0	$      3.5	$    43.6
International	58.4	93.8	71.8
Income from continuing operations before taxes	$    93.4	$    97.3	$ 115 .4

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

	Year Ended December 31,
	2005	2004	2003
Current:
U.S. Federal	$     10.8	$     (3.8)	$      8.6
U.S. State	0.8	1.4	1.1
International	22.6	36.4	33.8
	34.2	34.0	43.5
Deferred:
U.S. Federal	$    (12.4)	$     (6.2)	$     (3.0)
U.S. State	(1.2)	1.1	(0.6)
International	(4.8)	2.1	(1.8)
	(18.4)	(3.0)	(5.4)
Provision for income taxes	$     15.8	$    31.0	$    38.1

Bio-Rad’s income tax provision differs from the amount computed by applying the U.S. federal statutory rate to income before taxes as follows:

	Year Ended December 31,
	2005		2004		2003
U. S. statutory tax rate	35	%	35	%	35	%
Export sales benefit	(3)		(2)		(2)
Reduction in state tax benefits	--		2		--
Difference between U.S. and foreign tax rates
(net of foreign tax credits)	(8)		(2)		(1)
Loss carryforwards utilized	--		(1)		--
Foreign losses not benefited	3		3		1
Capital losses not benefited/(benefited)	(5)		1		--
Nontaxable dividend income	(6)		(2)		--
Increase(decrease) in tax reserves	3		(1)		(1)
Other	(2)		(1)		1
Provision for income taxes	17	%	32	%	33	%

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Deferred income taxes reflect the net tax effect of 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):

	Year Ended December 31,
	2005	2004
Deferred tax assets
Bad debt reserve	$    3.2	$     1.0
Inventory reserve	12.2	9.8
Warranty reserve	5.5	3.9
Vacation pay reserve	6.0	5.4
Net operating loss	10.1	8.4
Royalty reserve	4.4	2.9
Retirement reserve	3.6	4.2
Depreciation/Amortization	6.4	6.0
Amortization of intangibles	8.3	6.4
Impairment of assets	6.1	--
Write-off of investment in subs	2.4	6.4
State tax credit carryforward	6.4	5.9
Miscellaneous – other items	9.6	9.9
Valuation allowance	(17.7)	(18.0)
	66.5	52.2
Deferred tax liabilities
Deferred gain	5.2	5.7
Development cost of Hercules facility	1.2	1.2
Foreign exchange gain/loss	2.3	3.3
Depreciation/Amortization	7.6	7.1
Miscellaneous – other items	7.6	7.5
	$   23.9	$   24.8

The balance sheet as of December 31, 2004 reflects the reclassification of $8.8 million in deferred taxes related to income taxes paid on intercompany profits, resulting in a decrease of $8.8 million in current deferred taxes and an increase of the same amount in prepaid expenses and other current assets.  We have also reclassified $20.4 million to net within a particular tax jurisdiction (a) all current deferred tax liabilities and assets and (b) all non-current deferred tax liabilities and assets, resulting in a decrease in both long-term deferred tax assets and long-term deferred tax liabilities of $20.4 million.

At December 31, 2005, Bio-Rad's international subsidiaries had combined net operating loss carryforwards of $21.6 million.  These loss carryforwards have no expiration date.  The utilization of these carryforwards is limited to the separate taxable income of each individual subsidiary.

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At December 31, 2005, Bio-Rad had an unutilized domestic net operating loss carryforward of $12.3 million.  The loss carryforward will expire in the year 2018.  The utilization of the loss carryforward is limited to Bio-Rad's domestic taxable income.  At December 31, 2005, Bio-Rad had a California tax credit carryforward of $6.4 million.  The credit carryforward has no expiration date.  The utilization of the tax credit carryforward is limited to the extent Bio-Rad has California taxable income.

A valuation allowance is needed to reduce the deferred tax assets to an amount that is more likely than not to be realized. The net change in the valuation allowance in 2005 was a decrease of $0.3 million, primarily resulting from an increase in expected future earnings.

Bio-Rad does not provide for taxes which would be payable if the cumulative undistributed earnings of its international sub­sidiar­ies, approximately $373 million at December 31, 2005, were remit­ted to the U.S. parent company.  Unless it becomes advantageous for tax or foreign exchange reasons to remit a subsidiary's earnings, such earnings are indefinitely reinvested in subsidiary operations.  The withholding tax and U.S. federal income taxes on these earnings, if remitted, would in large part be offset by tax credits.

9. STOCKHOLDERS' EQUITY

Bio-Rad's 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 the balance 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.

10. STOCK OPTION AND PURCHASE PLANS

STOCK OPTION PLANS

Bio-Rad maintains stockholder approved incentive and non-qualified stock option plans for officers and certain other key employees.  No options have been issued to non-employees.

The 2003 Stock Option Plan of Bio-Rad Laboratories, Inc. (the Plan) authorizes the grant to employees of incentive stock options and non-qualified stock options.  A total of 1,675,000 shares have been reserved for issuance and may be of either Class A or Class B Common Stock.  At December 31, 2005, 1,092,798 shares remain available to be granted.

Under the Amended 1994 Stock Option Plan, Bio-Rad may grant options to its employees for up to 3,550,000 shares of common stock provided that no option shall be granted after March 1, 2004.

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Under the plans, Class A and Class B options are granted at prices not less than fair market value 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.  For options granted before January 1, 2001, options vest in increments of 25% over a four-year period on the yearly anniversary date of the grant.

Pro forma compensation costs are calculated for the fair value of the employees' purchase rights, which was estimated using the Black-Scholes model.  For purposes of the pro forma disclosures, the estimated fair value of the options granted is amortized to expense over the options' vesting period.

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

	Year Ended December 31,
	2005	2004	2003
Expected volatility	37%	39%	37%
Risk-free interest rate	3.45%	2.73%	2.65%
Expected life (in years)	4.7	4.3	4.2
Expected dividend	--	--	--

See Note 1 for a description of the effect of the pro forma compensation expense derived using the fair value method on our results.

Activity under the 1994 and 2003 Plan’s are summarized below (amounts reported in the Price columns represent the weighted average exercise price):

	Year Ended December 31,
	2005		2004		2003
	Shares	Price	Shares	Price	Shares	Price
Outstanding at beginning of year	1,630,717	$27.14	1,582,915	$20.04	1,591,832	$ 15.84
Granted	307,822	57.25	306,990	53.82	302,993	35.71
Exercised	(299,485)	16.26	(221,759)	14.02	(222,699)	12.58
Forfeited	(49,848)	46.05	(33,629)	25.13	(89,211)	16.57
Expired	--	--	(3,800)	9.85	--	--
Outstanding at end of year	1,589,206	$34.43	1,630,717	$27.14	1,582,915	$ 20.04
Options exercisable at year-end	746,765	$20.50	849,633	$15.22	780,415	$ 13.22
Weighted average fair value of
options granted during the year		$20.76		$18.74		$11.85

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The following summarizes information about stock options outstanding at December 31, 2005:

	Options Outstanding			Options Exercisable
Range of Exercise Prices	Number Outstanding at 12/31/05	Weighted Average Remaining Contractual Life (in years)	Weighted Average Exercise Price	Number Exercisable at 12/31/05	Weighted Average Exercise Price
$10.75-$11.97	421,947	4.02	$11.41	409,307	$11.42
$13.34-$35.50	505,048	5.48	$29.07	253,842	$26.35
$36.00-$56.40	443,577	8.03	$50.99	83,616	$47.15
$57.49-$62.04	218,634	8.88	$57.60	--	--

EMPLOYEE STOCK PURCHASE PLAN

Bio-Rad has an employee stock purchase plan that 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.  No compensation expense is recorded in connection with the Plan.  Bio-Rad has authorized the sale of 2,390,000 shares of common stock under the Plan.

We sold 92,869 shares for $4.0 million, 68,932 shares for $3.1 million and 71,314 shares for $2.4 million under the Plan to employees in 2005, 2004 and 2003, respectively.  The weighted average fair value of purchase rights granted in 2005, 2004 and 2003 was $11.38, $10.81 and $9.76, respectively.  At December 31, 2005, 607,438 shares remain authorized under the Plan.

The fair value of the employees' purchase rights was estimated using the Black-Scholes model with the follow­ing assumptions:

	Year Ended December 31,
	2005	2004	2003
Expected volatility	28.53%	20.91%	41.86%
Risk-free interest rate	2.95%	1.22%	0.93%
Expected life (in years)	0.25	0.25	0.25
Expected dividend	--	--	--

See Note 1 for a description of the effect of the pro forma compensation expense derived using the

fair value method on our results.

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11. OTHER INCOME AND EXPENSE

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

	Year Ended December 31,
		2005	2004	2003
Interest and investment income		$   16.7	$    6.6	$     3.2
Income from equity investee (Note 17)		0.1	3.1	--
Write-down of investments (Note 4)		--	(2.4)	--
Litigation settlement (Note 14)		(1.2)	1.9	--
Gains on sales of investments (Note 4)		11.2	--	--
Miscellaneous other items		2.2	1.9	(0.2)
Other income, net		$   29.0	$  11.1	$     3.0

12. SUPPLEMENTAL CASH FLOW INFORMATION

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

	Year Ended December 31,
	2005	2004	2003
Net Income	$       81.6	$      68.2	$      76.2
Adjustments to reconcile income to
net cash provided by operating activities
(net of effects of acquisitions):
Depreciation	49.1	46.2	40.0
Amortization	11.9	9.3	2.0
Foreign currency economic hedge
transactions, net	(6.4)	(6.5)	15.0
Gains on dispositions of securities	(13.3)	(1.9)	(0.3)
(Increase) decrease  in accounts receivable, net	(7.7)	(4.4)	10.0
Increase in inventories, net	(18.7)	(5.5)	(8.2)
Decrease (increase) in other current assets	(12.1)	3.5	(14.2)
Increase (decrease) in accounts payable
and other current liabilities	20.5	1.1	(1.6)
Increase (decrease) in income taxes payable	1.6	(2.8)	(5.6)
Increase (decrease) in deferred taxes	(15.0)	2.5	(8.0)
Write-down of investments	--	2.4	--
Debt retirement costs on 11-5/8% bonds	--	--	9.5
Impairment losses on long-lived assets	19.8	--	--
Other	(2.9)	11.0	12.8
Net cash provided by operating activities	$     108.3	$    123.1	$     127.6

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13. COMMITMENTS AND CONTINGENT LIABILITIES

RENTS AND LEASES

Net rental expense under operating leases was $23.7 million in 2005, $23.0 million in 2004 and $23.0 million in 2003.  Leases are princi­pally for facilities and automobiles.

Annual future minimum lease payments at December 31, 2005 under operating leases are as follows: 2006 - $20.9 million; 2007 - $13.9 million; 2008 - $8.4 million; 2009 - $5.3 million; 2010 - $3.6 million; subsequent to 2010 - $8.0 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.  Contributions charged to income were $7.5 million, $7.0 million and $6.5 million in 2005, 2004 and 2003, respectively.

OTHER POST-EMPLOYMENT BENEFITS

In several foreign locations we are statutorily required to provide a lump sum severance or termination indemnity to our employees.  Under these plans, the vested benefit obligation at December 31, 2005 and 2004 was $15.4 million and $17.3 million, respectively and has been included in Other long-term liabilities in the consolidated balance sheets.  These plans are not required to be funded, and as such, there is no trust or other device used to accumulate assets to settle these obligations.

FOREIGN EXCHANGE CONTRACTS

We enter into forward foreign exchange con­tracts as an economic hedge against foreign currency denominated intercom­pany receiv­ables and payables.  At December 31, 2005, we had contracts maturing in January through March 2005 to sell foreign currency with a nominal value of $61.1 million and an unrealized loss of $0.2 million.  Contracts to purchase foreign currency had a nominal value of $15.5 million with an unrealized gain of $0.1 million.

INSURANCE

We carry a deductible for workers' compensation and a portion of our group health insurance cost.  Accruals for losses are based on our claims experience and actuarial assumptions followed in the insurance industry.  Should a greater amount of claims occur compared to our estimates or cost of medical care increase beyond what has been anticipated, reserves recorded may not be sufficient and additional charges to income may be required.

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LETTERS OF CREDIT

In the ordinary course of business, we are at times required to post letters of credit.  The letters of credit are issued by our banks to guarantee our obligations to insurance companies. We were contingently liable for $4.8 million of standby letters of credit with banks as of December 31, 2005.

TAXES

Settlement of open tax years, as well as tax issues in other countries where we conduct our business, are not expected to have a material effect on the consolidated financial position or liquidity of Bio-Rad and, in the opinion of management, adequate provision has been made for income and franchise taxes for all years under examination or subject to future examination.

14. LEGAL PROCEEDINGS

Applera Corporation (Applera) and Roche Molecular Systems (Roche) filed a patent infringement case against MJ Research, Inc. and John and Michael Finney in the U.S. District Court for the District of Connecticut in June 1998.  On August 18, 2004, Bio-Rad acquired MJ Research through the acquisition of 100% of the stock of its parent company, MJ GeneWorks, Incorporated, from John and Michael Finney.  The complaint alleged that MJ Research infringed certain patents relating to PCR and instruments for performing PCR.  In response to their claims, MJ Research filed counterclaims including, among others, allegations that Applera had licensed and enforced these patents through anticompetitive conduct in violation of federal and state antitrust laws.  A trial on these matters commenced in March 2004.  The Court elected to hold the trial in two phases: a patent phase and an antitrust phase.

In the patent phase, which has concluded, the jury found that MJ Research infringed three U.S. patents related to PCR process technology and three U.S. patents related to thermal cycler instrument technology.  The jury found the infringement of four of the six patents to be willful.  MJ Research filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the District of Nevada on March 29, 2004, and later, the Bankruptcy Court granted MJ Research’s motion to dismiss the bankruptcy case, which became final in September 2004.

In April 2004, the jury awarded damages to Applera and Roche in the amount of $19.8 million. Applera and Roche sought an enhancement of damages, including legal fees, since several infringements were found to be willful.  On March 30, 2005, the Court granted Applera’s and Roche’s motion for enhancement of damages and increased the damages awarded to $35.4 million in addition to awarding reasonable attorneys’ fees and costs in an amount yet to be determined by the Court.  On March 31, 2005 the Court entered judgment in favor of Applera and Roche in that amount, subject to later amendment after it awards attorneys’ fees and costs.  In connection with this ruling, in April we posted a surety bond in the amount of $37.2 million collateralized by the restricted cash of $36.1 million to stay the enforcement of the judgment pending appeal.

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Regarding the antitrust phase of the trial, the Court ruled against MJ Research on all of its patent misuse defenses and federal antitrust counterclaims and dismissed all of its counterclaims, including the state antitrust and unfair competition claims, based on those rulings.  The Court denied MJ Research’s motion for reconsideration of the Court’s ruling on patent misuse.  On April 1, 2005, Applera moved the Court for entry of a permanent injunction on the asserted claims of the three U.S. patents related to thermal cycler instrument technology.  On April 14, 2005, MJ Research and John and Michael Finney filed a notice of appeal to the United States Court of Appeals for the Federal Circuit. In addition, they filed several post-judgment motions, including a motion for a new trial and a motion for judgment as a matter of law.  Applera filed a motion to amend the judgment to in clude prejudgment interest in the amount of approximately $1.0 million.  On May 13, 2005, Applera also moved the Court for joinder of Bio-Rad as an additional defendant in the case.  We opposed the motion for joinder and the motion for entry of a permanent injunction.  In connection with these matters, Bio-Rad established a $50.0 million litigation accrual as part of the purchase accounting of the acquisition of MJ Geneworks.

On August 25, 2005, the Court denied MJ Research’s and Michael and John Finney’s motion for a new trial and their motion for judgment as a matter of law.  On August 29, 2005, the Court granted Applera’s motion to amend the judgment to include prejudgment interest in the amount of approximately $0.9 million.  On August 30, 2005, the Court granted Applera’s motion for entry of a permanent injunction but denied Applera’s motion for joinder of Bio-Rad as an additional defendant in the case.  The injunction ruling, among other things, enjoined MJ Research, Michael and John Finney and, among others, MJ Research’s successors (which includes Bio-Rad) from making, using, offering to sell, or selling in the U.S. any products that were found at trial to directly infringe certain claims of two of the three U.S. patents held by Applera relating to thermal cycler instrument technology.  The injuncti on further enjoined them from contributing to the infringement of these claims by selling, offering to sell, or importing into the U.S. any products found at trial to infringe and from inducing others to infringe certain claims of all three of the U.S. patents relating to thermal cycler instrument technology.

On August 30, 2005, Bio-Rad entered into what it believed was an enforceable settlement agreement with Applera and Roche to settle this and all other pending litigation among the parties.  On Friday, September 2, 2005, Bio-Rad issued a press release in response to Applera’s September 1, 2005 press release regarding the injunction, in which Bio-Rad stated its belief that the parties had reached a settlement.

On September 8, 2005, Bio-Rad filed a motion with the Court to enforce the settlement agreement and for an award of attorneys’ fees and costs.  In addition, on September 30, 2005, Bio-Rad filed a motion to stay the injunction pending a favorable ruling on its motion to enforce the settlement agreement or, if that motion was not granted, a decision by the Court of Appeals for the Federal Circuit on the appeal of the judgment.  Applera and Roche opposed these motions.  On September 12, 2005, Applera filed motion to hold MJ Research and Bio-Rad in contempt for allegedly violating the injunction.  MJ Research and Bio-Rad opposed this motion.  On November 10, 2005, the Court issued a recommended ruling to deny the motion to enforce the settlement agreement and for an award of attorney’s fees and costs.

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On February 9, 2006, Bio-Rad entered into a settlement agreement with Applera and Roche, which resolves the above described patent infringement lawsuit pending in the U.S. District Court of Connecticut.  In connection with the settlement of this lawsuit, Bio-Rad’s 1998 thermal cycler supplier license relating to Applera’s core thermal cycler patents and Roche’s PCR patents has been amended to include the MJ Research thermal cyclers that were subject to this litigation.

Bio-Rad and MJ Research were also defendants in another action in the U.S. District Court for the District of Connecticut.  Applera commenced the action against us on November 9, 2004.  The complaint alleged that Bio-Rad was infringing a U.S. patent which is a counterpart to the revoked European real-time PCR patent described below.  The complaint sought damages and injunctive relief.  On February 9, 2006, Bio-Rad entered into a settlement agreement (with an effective date of April 1, 2005) with Applera, which resolves this lawsuit as well as any issues surrounding back royalties.

The total net settlement amount with respect to all of the above referenced settlement agreements, including amounts related to previously accrued back royalties, was approximately $62 million.  Bio-Rad recognized $1.2 million of additional expense in the fourth quarter of 2005 to adjust its estimated liability as a result of the settlements (see Note 16).  In connection with the settlements, Bio-Rad entered into a royalty-bearing license agreement with Applera relating to Bio-Rad’s real-time instrument business in the United States and a term limited license in the rest of the world.

Applera also filed four actions in the Regional Court of Düsseldorf, Germany during the period from August 2002 through September 2003 against MJ Research and others alleging infringement of four European patents relating to thermal cyclers.  Bio-Rad is also a defendant in one of the actions.  The suit seeks actual damages, costs and expenses and injunctive relief.  Three of the actions had a trial before the Düsseldorf court in April 2004.  One of these actions has since been dismissed, and two of these actions have been resolved in the settlement with Applera described above.  In May 2004, the Düsseldorf court issued an adverse ruling against MJ Research and us, which included an injunction against us and MJ Research from selling any real-time PCR instruments and reagents in Germany. In December 2004, the European Patent Office revoked the patent and the injunctions against MJ Research and Bio - -Rad were lifted, allowing MJ Research and us to resume sales of real-time PCR thermal cyclers and reagents.  Applera appealed revocation of the patent, and the appeal hearing will be held in July 2006.

Bio-Rad is also a defendant in an action in Japan which is similar to the action concerning the revoked European patent relating to real-time PCR.  Applera commenced this action against us on May 7, 2002.  The complaint alleges that Bio-Rad is infringing a Japanese patent which is a counterpart to the revoked European patent and seeks injunctive relief but not damages.  In November 2003, the Japanese court issued an adverse ruling against us which enjoined us from selling real-time PCR instruments and reagents in Japan.  Bio-Rad appealed the decision and also filed a separate action in the Japanese Patent Office seeking revocation of the Japanese patent.  In March 2005, the Japanese Patent Office revoked the Japanese patent.  Applera’s appeal was denied by the Japanese Intellectual Property High Court in January 2006, which Applera may appeal to the Japanese Supreme Court.

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Bio-Rad is also party to various claims, legal actions and complaints arising in the ordinary course of business.  We do not believe that any ultimate liability resulting from any of these lawsuits will have a material adverse effect on our results of operations, financial position or liquidity.  However, Bio-Rad cannot give any assurance regarding the ultimate outcome of these lawsuits and their resolution could be material to our operating results for any particular period, depending upon the level of income for the period.

15. SEGMENT INFORMATION

Bio-Rad is a multinational manufacturer and worldwide distributor of its own life science research products and clinical diagnostics products.  We have two reportable segments:  Life Science and Clinical Diagnostics.  These reportable segments are strategic business lines that offer different products and services and require different marketing strategies.

The Life Science segment develops, manufactures, sells and services reagents, apparatus and instruments used for biological research.  These products are sold to university and medical school laboratories, pharmaceutical and biotechnology companies, food testing laboratories and government and industrial research facilities.

The Clinical Diagnostics segment develops, manufactures, sells and services automated test systems, informatics systems, test kits and specialized quality controls for the healthcare market.  These products are sold to reference laboratories, hospital laboratories, state newborn screening facilities, physicians’ office laboratories, transfusion laboratories, and insurance and forensic testing laboratories.

The remainder of our former Analytical Instruments segment is included in Other Operations.  The material product lines of this segment were sold in 2001 and 2000.

The accounting policies of the segments are the same as those described in Significant Accounting Policies (see Note 1).  Segment profit or loss used for corporate management purposes includes an allocation of corporate expense based upon sales and an allocation of interest expense based upon accounts receivable and inventories.  Segments are expected to manage only assets completely under their control.  Accordingly, segment assets include primarily accounts receivable, inventories and gross machinery and equipment.  Goodwill balances have been included in corporate for segment reporting purposes.

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Information regarding industry segments at December 31, 2005, 2004 and 2003 and for the years then ended is as follows (in millions):

		Life		Clinical		Other
		Science		Diagnostics		Operations
Segment net sales	2005		$  549.9		$  618.4	$  12.6
	2004		504.7		576.4	8.9
	2003		456.2		514.8	8.6
Allocated interest expense	2005		$    13.8		$   18.7	$   0.1
	2004		8.0		12.1	0.1
	2003		6.7		9.6	0.1
Depreciation and amortization	2005		$    24.6		$   33.0	$   0.1
	2004		18.8		32.6	0.2
	2003		10.3		29.2	0.3
Segment profit (loss)	2005		$    (0.5)		$   64.4	$  (0.6)
	2004		31.4		60.1	(0.1)
	2003		73.2		59.8	(0.2)
Segment assets	2005		$  276.3		$  392.9	$   5.4
	2004		277.5		401.2	6.0
	2003		252.7		379.5	5.0
Capital expenditures	2005		$    11.9		$    25.1	$   0.1
	2004		24.1		34.6	0.1
	2003		36.2		30.7	0.1

The Life Science segment profit (loss) for 2005 includes $19.8 million of impairment losses on long-lived assets (see Note 6).  The Life Science segment profit (loss) for 2004 includes $13.7 million of in-process research and development expense purchased as part of the MJ GeneWorks, Inc. acquisition.

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The difference between total segment allocated interest expense, depreciation and amortization, and capital expenditures and the corresponding consolidated amounts is attributable to our corporate headquarters.  The following reconciles total segment profit to consolidated income before taxes (in millions):

	Year Ended December 31,
	2005	2004	2003
Total segment profit	$         63.3	$         91.4	$        132.8
Other income, net	29.0	11.1	3.0
Foreign exchange gains (losses)	1.5	(2.4)	(4.1)
Costs related to bond redemption	--	--	(14.1)
Net corporate operating, interest and other
income and expense not allocated to segments	(0.4)	(2.8)	(2.2)
Consolidated income before taxes
from continuing operations	$         93.4	$         97.3	$        115.4

The following reconciles total segment assets to consolidated total assets (in millions):

	December 31,
	2005	2004
Total segment assets	$        674.6	$        684.7
Cash and other current assets	563.1	469.0
Net property, plant and equipment excluding
segment specific gross machinery and equipment	(35.3)	(16.4)
Goodwill	113.3	113.3
Other long-term assets	110.9	121.0
Total assets	$     1,426.6	$     1,371.6

The following presents sales to external customers by geographic area based primarily on the location of the use of the product or service (in millions):

	Year Ended December 31,
	2005	2004	2003
Europe	$      508.3	$       502.2	$         434.5
Pacific Rim	193.6	168.2	159.8
United States	421.3	370.2	335.2
Other (primarily Canada and Latin America)	57.8	49.4	50.1
Total sales	$   1,181.0	$    1,090.0	$         979.6

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The following presents long-lived assets by geographic area based upon the location of the asset (in millions):

	Year Ended December 31,
	2005	2004	2003
Europe	$      75.0	$      57.7	$       48.4
Pacific Rim	8.5	8.0	7.5
United States	332.1	394.4	254.4
Other (primarily Canada and Latin America)	2.8	3.1	5.7
Total long-lived assets	$    418.4	$    463.2	$     316.0

16. SUBSEQUENT EVENTS

On February 9, 2006, Bio-Rad completed negotiations with Applera Corporation and Roche Molecular Systems, Inc. to settle the patent infringement litigation against MJ Research, a wholly owned subsidiary of Bio-Rad.  The December 31, 2005 financial statements reflect the impact of this settlement (see Note 14).  

17. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for 2005 and 2004 are as follows (in millions, except per share data):

	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
2005
Net sales	$      299.2	$      291.3	$      283.2	$      307.3
Gross profit	166.4	160.6	156.8	162.7
Net income	33.5	18.4	16.2	13.5
Basic earnings per share	$        1.29	$        0.71	$        0.62	$        0.51
Diluted earnings per share	$        1.26	$        0.69	$        0.61	$        0.50
2004
Net sales	$      262.7	$      260.5	$      258.9	$      307.9
Gross profit	149.3	149.7	142.8	168.3
Net income	22.0	22.9	6.3	17.0
Basic earnings per share	$        0.86	$        0.89	$        0.24	$        0.66
Diluted earnings per share	$        0.83	$        0.86	$        0.24	$        0.65

In the fourth quarter of 2005, Bio-Rad recorded $19.8 million of impairment losses related to intangible and long-lived assets (see Note 6).

In the fourth quarter of 2004, Bio-Rad refined its procedures to more accurately reflect the application of its revenue recognition policy, resulting in a decrease in net sales and net income of approximately $5.0 million and $1.7 million, respectively.  Also, in the fourth quarter of 2004, we adopted the equity method of accounting for one of our investments previously accounted for on the cost method.  The result was an increase in net income of $2.1 million.  None of these items had a significant effect on any prior quarter or fiscal year.

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders

Bio-Rad Laboratories, Inc.
Hercules, California

We have audited the accompanying consolidated balance sheets of Bio-Rad Laboratories, Inc. and subsidiaries (the “Company”) as of December 31, 2005 and 2004, and the related consolidated statements of income, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2005.  These financial statements are the responsibility of the Company's management.  Our responsibility is to express an opinion on these financial statements 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, such consolidated financial statements present fairly, in all material respects, the financial position of Bio-Rad Laboratories, Inc. and subsidiaries as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2005, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the effectiveness of the Company's internal control over financial reporting as of December 31, 2005, based on the criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 2, 2006 expressed an unqualified opinion on management's assessment of the effectiveness of the Company's internal control over financial reporting and an unqualified opinion on the effectiveness of the Company's internal control over financial reporting.

/s/ Deloitte & Touche LLP

San Francisco, California

March 2, 2006

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS

OF OPERATIONS AND FINANCIAL CONDITION

This discussion should be read in conjunction with the information contained in Bio-Rad's Consolidated Financial Statements and the accompanying notes which are an integral part of the statements.  References are to the Notes to Consolidated Financial 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.  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: our ability to successfully develop and market new products; our reliance on and access to necessary intellectual property; 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 undertake no obligation to publicly update or revise any forward looking statements, whe ther as a result of new information, future events, or otherwise.

Overview.  Bio-Rad is 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, industry, 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 replication of results in manufacturing processes and their experiments and tests, we estimate that approximately 70% of our revenues are recurring.  Approximately 36% of our 2005 consolidated net sales are from the United States, and approximately 64% are international sales, largely denominated in local currency with the majority of these sales in Euros, Yen and British Sterling.  As a result, our consolidated sales expressed in dollars benefit when the U.S. dollar weakens and suffers when the dollar strengthens in relation to other currencies.  Currency fluctuations benefited our consolidated sales expressed in U.S. dollars in 2005 and 2004.  The market for reagents and apparatus remains good while growth rates have slowed due to both public and private grant funding being more measured.  The market for large capital equipment in 2004 and 2005 declined from prior periods, as many pharmaceutical and biotechnology customers delayed or reduced their capital spending.  Bio-Rad is generally less impacted by capital spending as lower cost reagents and apparatus comprise more than 70% of product sales.

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The following shows gross profit and expense items as a percentage of net sales:

	Year Ended December 31,
	2005	2004	2003
Net sales	100.0	100.0	100.0
Cost of goods sold	45.3	44.0	43.2
Gross profit	54.7	56.0	56.8
Selling, general and administrative expense	35.2	34.7	32.4
Product research and development expense,
excluding in-process research and development	9.7	9.9	9.3
Income from continuing operations	6.6	6.1	7.9
Discontinued operations	0.3	0.2	(0.1)
Net income	6.9	6.3	7.8

We intend for the discussion of our financial condition and results of operations that follow to assist you in understanding how accounting principles, policies and estimates affect our results, and the significant factors that caused changes in our operations and financial position for the years ended December 31, 2005 and 2004.

CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The accompanying discussion and analysis of Bio-Rad's financial condition and results of operations are based upon the consolidated financial statements, which have been prepared in accordance with generally accepted accounting principles in the United States (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.  Bio-Rad bases its estimates on historical experience and on various 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 are subject to change and the best current estimates and assumptions routinely require adjustment.  Actual results could differ from these estimates.  We have determined that for the periods reported in our 2005 Annual Report, the following accounting policies and estimates are critical in understanding the financial condition and results of our operations.

Accounting for Income Taxes.  As part of the process of preparing consolidated financial statements, management is required to estimate our income taxes in each of the jurisdictions in which we operate. This process involves estimating our actual 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 the consolidated balance sheet.  Management must then assess 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 expense within the tax provision in the statement of operations must be in cluded.

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Significant management judgment is required in determining the provision for income taxes, deferred tax assets and liabilities and any valuation allowance recorded against the net deferred tax assets.  We have recorded a valuation allowance of $17.7 million and $18.0 million as of December 31, 2005, and 2004, 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, before they expire. The valuation allowance is based on management's current estimates of taxable income for the jurisdictions in which Bio-Rad operates 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 Bio-Rad’s financial position.  Should realization of these deferred assets previously reserved occur, the tax provision would decrease, raising income and positively impacting Bio-Rad’s financial position.

Valuation of Long-lived and Intangible Assets and Goodwill.  We assess the impairment of identifiable intangibles, long-lived assets and related goodwill and enterprise level goodwill whenever events or changes in circumstances indicate that the carrying value may not be recoverable.  Projected future operating results and cash flows of the reporting units’ asset or asset group are used to establish the fair value used in evaluating the carrying value of long-lived, intangible assets and goodwill.  Factors that we consider important which could trigger an impairment review include the following:

- 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;

- significant negative industry or economic trends.

When Bio-Rad determines that the carrying value of intangibles, long-lived assets or enterprise level goodwill may not be recoverable based upon the existence of one or more of the above indicators of impairment, we measure any impairment based on a projected discounted cash flow method using a discount rate determined by management to be commensurate with the risk inherent in our current business model.

For the year 2005, that review indicated an impairment had taken place in purchased intangible assets related to existing thermal cycler and microarray technology.  There were no impairments taken in the year 2004 and 2003.

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Valuation of Inventories.   Bio-Rad values inventory at the lower of the actual cost to purchase and/or manufacture the inventory, or the current estimated market value of the inventory.  We review inventory quantities on hand and record a provision for excess and obsolete inventory based primarily on an estimated forecast of product demand and production requirements for the next twelve months 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.  Additionally, our estimates of future product demand may prove to be inaccurate, in which case we may have understated or overstated the provision required for excess and obsolete inventory. &n bsp;In the future, if inventory is determined to be overvalued, we would be required to recognize such costs in our cost of goods sold at the time of such determination.  Likewise, if inventory is determined to be undervalued, we may have over-reported cost of goods sold in previous periods and would be required to recognize such additional operating income at the time of sale.  Therefore, although we make efforts to ensure the accuracy of our forecasts of future product demand, any significant unanticipated changes in demand, technological developments or regulations could have a significant impact on the value of our inventory and reported operating results.

Allowance for Doubtful Accounts.   Bio-Rad maintains 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, 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 reserve.  This valuation allowance is reviewed on a quarterly basis to determine whether an increase or decrease is warranted.  Should the estimates 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 through negotiation or litigation.

Warranty Reserves.  Bio-Rad warrants certain equipment against defects in design, materials and workmanship, generally for a period of one year.  Upon shipment 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 reserve, and adjusted, if necessary.  The warranty percentage and accrual are 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.

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Litigation Reserves.  Estimated amounts for claims that are probable and can be reasonably estimated are recorded as liabilities in the consolidated balance sheets. 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 are obligated to disclose in the footnotes of the financial statements when we are unable to make a reasonable estimate of the 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 in our estimates of the potential liability could materially impact our results of operations and financial position.

Recent Accounting Pronouncements

In December 2004, the FASB issued SFAS 123(R), Share-Based Payment, which is a revision of SFAS 123, Accounting for Stock-Based Compensation, and supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees.  SFAS 123(R) requires companies to recognize the cost of employee services received in exchange for awards of equity instruments, based on the grant date fair value of those awards in their financial statements. Pro forma disclosure is no longer an alternative under the new Standard.  SFAS 123(R) will also require the benefits associated with tax deductions in excess of recognized compensation cost to be reported as a financing cash flow rather than as an operating cash flow as currently required.

Bio-Rad has adopted the provisions of SFAS 123(R) beginning January 1, 2006 under the “modified prospective” transition method. Under this method, compensation cost for the unvested portion of previously granted awards and all new awards will be recognized on or after the date of adoption. The compensation cost related to unvested awards at the date of adoption is based on the grant-date fair value of those awards as calculated for pro forma disclosures under the original SFAS 123 as adjusted for the effect of estimated forfeiture rates.

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Our 2006 results are expected to include approximately $5 million of additional compensation expense as a result of the adoption of SFAS 123(R).  Because this estimate is based on assumptions including anticipated levels of new awards to be granted, changes in stock price, forfeitures of awards and employee exercise patterns, the actual impact on earnings may differ from this estimate. Bio-Rad will recognize compensation cost for stock-based awards issued after December 31, 2005 on a straight-line basis over the requisite service period for the entire award.

CORPORATE RESULTS -- SALES, MARGINS AND EXPENSES

Bio-Rad net sales for the year 2005 were $1,181.0 million, an increase of 8.3% over the prior year.  The impact of foreign exchange translation throughout the year provided growth from foreign denominated net sales of approximately 1.1% for the full year.

The Life Science segment had sales growth of 9.0% in 2005, benefiting from an approximate 0.8% increase due to foreign exchange.  Currency neutral sales growth of 8.2% was provided by the acquisition of MJ Research, process media sales, multi-analyte detection, and protein separation apparatus and reagents.  Offsetting these specific growth areas was a decline in Food Science products as the average pricing for our BSE test declined year over year in a very competitive market. During the fourth quarter, we were enjoined by court order not to sell or service MJ products in the United States, which negatively impacted sales.

The Clinical Diagnostics segment had sales growth of 7.3% in 2005, benefiting from an approximate 1.4% increase due to foreign exchange.  Currency neutral sales growth was 5.9% in the Clinical Diagnostics segment.  Our quality control products had growth across several product lines.  Diagnostic tests provided for diabetes monitoring, genetic disorder identification, and improved demand for blood virus products in the U.S. and Asia also contributed to overall growth.

Bio-Rad net sales for the year 2004 were $1,090.0 million, an increase of 11.3% over the prior year after presenting our confocal microscopy operations, sold in May 2004, as discontinued operations.  The impact of a weakening U.S. dollar throughout the year provided growth from net foreign currency denominated sales of approximately 5.8% for the full year.

The Life Science segment had sales growth of 10.6% in 2004, benefiting from an approximate 5.8 % increase due to foreign exchange.  Currency neutral sales growth of 4.8% was provided by the acquisition of MJ Research and our protein expression product lines, amplification and electrophoresis reagents.  Offsetting the sales growth of this segment is continued aggressive competitor pricing for the BSE test, continued general weakness related to some government grant spending (most notably Japan), and diminished capital equipment purchases by large pharmaceutical companies.

The Clinical Diagnostics segment had sales growth of 12.0% in 2004, benefiting from an approximate 5.7% increase due to foreign exchange.  Currency neutral sales growth of 6.3% was provided in several broad product lines of the Clinical Diagnostics segment.  Quality control products grew due to the Hematronix acquisition and the growth of existing product offerings.  Also contributing to growth were diagnostic products for autoimmune, diabetes and blood virus testing.

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The 2005 consolidated gross margins declined to 54.7% in the current year from 56.0%.  The decline in the Life Science segment’s gross margin accounts for the decline for Bio-Rad as a whole.  Several factors contributed to the Life Science decline.  Lower average pricing on the BSE product lines and the court-ordered halt to MJ product sales and service relating to the patent litigation with ABI resulted in the immediate expensing of all production costs leading to higher service and warranty expense as customer accommodations were made.  The Clinical Diagnostics segment’s margin improved by less than one percent.  Moderation in the increase of plant overhead costs and lower reagent rental depreciation were contributing factors to this improvement.

The 2004 consolidated gross margins declined to 56.0% from 56.8% in the prior year.  The majority of the decline in the Life Science segment is attributable to the BSE product line, as average selling price declined.  Additionally, there were increased intangible asset amortizations from the MJ acquisition, MJ integration costs and unabsorbed factory overhead costs from lower than anticipated volumes.  The Clinical Diagnostics segment’s gross margin improved by about one percent.  Efficiency gains in factory performance resulted in a general trend of improving the Clinical Diagnostic segment’s margin.

Consolidated selling, general and administrative expense was 35.2% of net sales for the year 2005 compared to 34.7% for the year 2004.  The Life Science segment and Corporate shared services added expenses at a rate that exceeded sales growth.  Life Science increases are attributable to higher personnel and facilities costs related to the acquisition of MJ, legal expenses related to patent litigation, the amortization of intangibles and an increase in the experience of uncollectible receivables.  Corporate shared services had increased spending in information technology, acquisition related expenses and legal fees.

Overall for 2005, Bio-Rad increased costs associated with regulatory requirements for global tax and audit compliance and security and disaster recovery for our information technology infrastructure.  Additionally, we incurred professional services in association with the attempted acquisition of BioSource International, Inc. and settling the Instrumentation Laboratories (IL) litigation.

The Clinical Diagnostic segment’s selling, general and administrative (SG&A) expense grew at a rate slower than sales.  The largest element of absolute cost is personnel which also was responsible for generating the most growth in expenses.

Consolidated selling, general and administrative expense for 2004 was 34.7% of sales, compared to 32.4% for the year ended 2003.  Both the Life Science and Clinical Diagnostics segments added expenses at a rate of growth higher than sales.  The Life Science segment had increased facility costs after relocating to new facilities and consulting costs associated with implementation of new distribution, manufacturing and financial software systems.  Costs also increased related to the MJ acquisition and legal matters associated with the gene expression product line.  We have seen significant cost increases associated with regulatory compliance including Section 404 of Sarbanes-Oxley, global tax compliance and security and disaster recovery for our information technology infrastructure.

41

Product research and development expense in 2005 declined to 9.7% of sales after adjusting for the $14.6 million of purchased in-process R&D from 2004 acquisitions. In absolute dollars, each segment had growth with Life Science increasing more than Clinical Diagnostics.  The Life Science segment concentrated on research and development in amplification and protein interaction technologies.  The Clinical Diagnostics segment concentrated on automation for the serology, autoimmune and blood virus products as well as the segment’s quality control products.

Excluding $14.6 million of purchased in-process R&D from both the Hematronix and MJ Research acquisitions, product research and development expense in 2004 rose to 9.9% of sales from 9.3% in 2003.  The significant increase in spending levels occurred in Life Science in the areas of protein separation, protein function and food safety.  Increased spending levels in Clinical Diagnostics are attributable to the Bio-Plex 2200^TM, an immunoassay platform that employs multiplexing technology. Clinical Diagnostics continues to invest in expanding its quality control products and blood virus diagnostic tests.

CORPORATE RESULTS

Interest expense increased in 2005 to $32.6 million, from $20.2 million in the prior year.  The year 2005 had approximately $434.7 million of average borrowings.  The increase reflects that in late December 2004, we borrowed an additional $200.0 million in a private placement of Senior Subordinated Notes at 6.125%.  This additional borrowing has substantially caused all of the 2005 increase in interest expense which includes the amortization of bond origination fees.  We now have two principal borrowings: the $225 million 7.5% 10-year bonds due 2013, and the $200 million 6.125% bonds due 2014.

Interest expense declined in 2004 to $20.2 million, a decrease of $10.8 million.  The year 2004 is representative of approximately $251.6 million of average borrowings, consisting largely of the September 2003, 7.5%, 10 year bonds plus the amortization of bond origination fees and interest on local foreign lines of credit.  During 2003, we refinanced all of our long-term debt incurring additional interest costs of $14.6 million for open market purchases and the tendering of $106.0 million of our 11-5/8% senior subordinated notes due in 2007.

Foreign exchange gains (losses) for 2005 and 2004 were $1.5 million and ($2.4) million, respectively. The significant difference between 2005 and 2004 was the result of discontinuing our hedging program of the Brazilian Real due to the high cost during a period of extended weakness in 2004.  During 2005 the Real has strengthened against the U.S. dollar generating gains as we have continued not to hedge our current intercompany receivable balance.  All years include the net cost of Bio-Rad’s economic hedging program valuing open option contracts to fair market value at period end and the revaluation of intercompany receivables and payables represented by the established European, Asian and North American currencies.

42

Other income and expense for the year 2005 includes two atypical events.  First is the sale of our investment in IL for $12 million resulting in a $7.9 million gain.  Second is a gain of $3.3 million on the tendering of our shares in BioSource International, Inc., a potential acquisition that later accepted a buy-out from another company.  The years 2005 and 2004 both include $16.7 million and $6.6 million, respectively, of interest and investment income generated by our net cash position and notes receivable.  Dividend and interest income increased in 2005 as we invested an incremental $200 million, the proceeds of the December 2004 borrowing, and short-term interest rates rose throughout 2005.  In 2004, we settled by negotiation and received cash payments of $3.3 million in two matters that originated prior to 2002.  First was a $1.9 million settlement with an outside legal firm which represented us in the mid 1990’s.  The second settlement was with Digilab LLC for contested transition services settled in connection with the sale of our spectroscopy product line in October 2001.  Also in 2004, we recorded a write-down of $2.4 million for an other than temporary impairment of our investment in Instrumentation Laboratories, an Italian diagnostic company in which we hold a 3% stake, and recorded $3.1 million of other income associated with an equity method investee, a Japanese equipment manufacturer in which we hold a 40% stake.

Bio-Rad’s consolidated effective tax rate was 17%, 32% and 33% in 2005, 2004 and 2003, respectively.  The 2005 effective tax rate reflects a one time benefit of 5% related to a capital loss for tax purposes.  The 2005 and 2004 effective tax rates reflect tax rate benefits of 6% and 2% respectively for nontaxable dividend income.  The tax rate for 2005 reflects a benefit in the difference between U.S. and foreign taxes net of foreign tax credit related to certain one time events in France and the UK.  The tax rate for all years reflects a tax benefit related to export sales.

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

FINANCIAL CONDITION

Historically, our principal capital requirement was for working capital to fund our internal growth.  Management assesses Bio-Rad’s liquidity in terms of our ability to generate cash to fund our operations and make acquisitions.  The relevant factors that effect liquidity are cash flows from operations, capital expenditures, acquisition opportunities, common stock repurchases, the adequacy of available bank lines of credit and the ability to raise long-term capital by borrowing in the debt markets with satisfactory terms and conditions.

At December 31, 2005, we had available $413.1 million in cash, cash equivalents and short-term investments, and $30.8 million under international lines of credit.  Under the $150.0 million restated and amended Revolving Credit Facility, we have $145.6 million available with $4.4 million reserved for standby letters of credit issued by our banks to guarantee our obligations to certain insurance companies.  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 plant, equipment and systems and an acquisition consistent with opportunities presently available.

43

CASH FLOW FROM OPERATIONS

Net cash provided by operations was $108.3 million, $123.1 million and $127.6 million in 2005, 2004 and 2003, respectively.  The decrease is primarily attributable to higher cash outlays for inventory and selling, general and administrative spending at a rate of growth greater than sales growth.  The selling, general and administrative spending increases are attributable to higher spending for information technology, legal fees and personnel costs.  While interest payments increased $11.8 million due to the December 2004 borrowing for $200 million, this is partially offset by increased investment income generated by those funds in an environment of rising short-term interest rates.  Finally, an increase in income taxes paid of $6.0 million further lowered net cash flows provided by operating activities.

Bio-Rad’s management regularly reviews the allowance for uncollectible receivables and believes net accounts receivable are fully realizable.  Management routinely reviews inventory for the impact of obsolesence and changes in market prices caused by the introduction of new products, technologies and in government reimbursement policies.

CASH FLOW FROM INVESTING ACTIVITIES

Net capital expenditures in 2005 totaled $36.1 million, compared to $60.5 million and $69.0 million in 2004 and 2003, respectively.  Net capital expenditures for 2005 reflects less investment in facility, equipment and new information technology systems.  Also, spending on reagent rental equipment declined.  The years 2004 and 2003 contained much higher spending as a new 160,000 square foot building on our Hercules campus was completed and equipped.  Additionally, a leased manufacturing facility was improved and equipped in this period.  A principal expenditure in all years is clinical diagnostics equipment placed with customers to be used with our clinical diagnostics reagents.  For 2005, this amount represents $13.9 million of capital additions.  We continue to invest in business systems to modernize and standardize distribution capabilities and enhance data communication.  Other ongoing expen ditures are for the replacement and improvement of production equipment and facilities to meet the necessary Good Manufacturing Practices (GMP) mandated by the Food and Drug Administration (FDA) for Clinical Diagnostics and to meet the requirements of other regulatory bodies as well as many customers in the Life Science market.

Net cash used in investing activities was $6.2 million for the year 2005.  The decline in payments for acquisitions and intangible assets is due to the decrease in acquisition activity as compared to 2004. During 2004, we acquired MJ Geneworks, Hematronix and increased our investment in Sartorius.  Proceeds from divestitures in 2004 are from the divestiture of the confocal microscopy product line.  The $69.0 million of net sales of marketable securities and investments represents an increased investment in cash equivalents in a rising short term interest rate environment.  Cash and short-term investments, in part, represent our resources available to do an acquisition before drawing on our available credit facilities and incurring additional debt.  Actual acquisition spending, however, may vary depending upon the availability and timing of a suitable candidate.

44

CASH FLOW FROM FINANCING ACTIVITIES

Net cash flow provided from financing was $1.3 million for 2005 and reflects the reduction in activities during 2005, as no borrowings occurred and early payments on existing international debt were repaid.  During the fourth quarter of 2004, we borrowed $200 million at 6.125% due 2014 in a private placement.  This borrowing, along with the $225 million at 7.5% due 2013, provides us with capital at a fixed rate for the next nine and eight years, respectively.  Our focus for the company is to make an acquisition to supplement our internal growth.  We routinely meet and discuss potential acquisitions with specific companies, principals or their agents.  A specific acquisition of a material nature has not, as of this date, been identified but we continue to attempt to locate opportunities.

Bio-Rad completed three significant financing transactions during 2003.  These transactions were the completion of a $150.0 million revolving credit facility, the placement of $225.0 million aggregate principal amount of Senior Subordinated Notes in a private offering and completion of a cash tender offer to retire all of our outstanding 11-5/8% Senior Subordinated Notes due in 2007.

The $225.0 million private placement was exchanged for the new 7.5% Exchange Notes that have been registered under the Securities Act of 1933, as amended, or applicable state securities laws.  This transaction was completed on October 30, 2003, with the new Exchange Notes being virtually identical in all material respects to the 7.5% private placement.

The $150.0 million revolving credit facility is secured by substantially all of our personal property assets and the assets of our domestic subsidiaries and 65% of the capital stock of certain foreign subsidiaries, and is guaranteed by all of our existing and future domestic subsidiaries (other than immaterial domestic subsidiaries as defined for purposes of the new credit facility).

The Board of Directors has authorized us to repurchase up to $18 million of Bio-Rad's common stock over an indefinite period of time.  Through December 31, 2005, we have cumulatively repurchased 1,179,272 shares of Class A Common Stock and 60,000 shares of Class B Common Stock for a total of $14.7 million.  Our credit agreements restrict our ability to repurchase our own stock.  There were no share repurchases made during 2005 or 2004.

45

CONTRACTUAL OBLIGATIONS

The following summarizes certain of our contractual obligations as of December 31, 2005 and the effect such obligations are expected to have on our cash flows in future periods (in millions):

Contractual Obligations	Total	Less Than One Year	1-3 Years	3-5 Years	More than 5 Years
Long-term debt, including current portion (1)	426.1	0.4	0.6	0.1	425.0
Interest payments	239.6	29.1	87.4	87.4	35.7
Operating lease obligations (2)	60.1	20.9	22.3	8.9	8.0
Purchase obligations (3)	13.2	9.4	2.1	1.0	0.7
Long-term liabilities	21.4	--	4.6	1.2	15.6

⁽¹⁾

These amounts represent expected cash payments, include capital lease obligations and are included in our Consolidated Balance Sheets.  See Note 7 of the Consolidated Financial Statements for additional information about our debt.

⁽²⁾

Operating lease obligations are described in Note 13 of the Consolidated Financial Statements.

⁽³⁾

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

FINANCIAL RISK MANAGEMENT

Bio-Rad uses derivative financial instruments to reduce our exposure to fluctuations in foreign exchange rates and, on occasion, interest rates.  No derivative financial instruments are entered into for the purpose of speculating or trading.  Company policy limits all derivative positions exclusively to reducing risk by hedging an underlying economic exposure.  These derivative investments do not qualify for hedge accounting treatment under SFAS 133, Accounting for Derivative Instruments and Hedging Activities.  Derivative instruments used in these transactions will be valued at fair value and changes in fair value will be included in reported earnings.

Bio-Rad operates and conducts business in many countries and is exposed to movements in foreign currency exchange rates.  Additionally, Bio-Rad's consolidated net equity is impacted by the conversion of the net assets of international subsidiaries for which the functional currency is not the U.S. Dollar.  Foreign currency exposures are managed on a centralized basis by our treasury department.  This allows for the netting of natural offsets and lowers transaction costs and exposures. Bio-Rad currently makes more than 60% of its sales outside the United States and weakening in one currency can often be offset by strengthening in another currency.

46

Bio-Rad typically enters into forward exchange contracts to sell its foreign currency.  Contracts primarily in British Sterling, Japanese Yen and the Euro, are entered into typically for 30 to 60 days.  Bio-Rad records the change in the value of its foreign currency intercompany receivables and payables as a foreign exchange gain or loss on its statements of income along with the change in the fair market value of the forward exchange contract used as an economic hedge of that asset or liability.

Bio-Rad uses sensitivity analysis to assess the market risk associated with its foreign currency exchange risk.  Market risk is the potential change in fair value of derivative positions from an adverse movement in currency exchange rates.  At year-end, a 10% adverse loss on quoted foreign currency exchange rates would result in an approximate $8 million loss on our derivative position.  This impact of a change in exchange rates excludes the offset derived from the change in our underlying assets and liabilities, which could reduce the effect to zero.

Our long-term debt consists primarily of fixed rate instruments. Bio-Rad uses sensitivity analysis to assess the market risk associated with its interest rate risk.  As of December 31, 2005 our interest rate risk was not significant.

47

EX-21

		Exhibit 21.1
LISTING OF SUBSIDIARIES
	JURISDICTION OF
SUBSIDIARY	ORGANIZATION
Bio-Rad Laboratories Pty. Limited	Australia
Bio-Rad Pty. Limited	Australia
Bio-Rad Laboratories Ges.m.b.H.	Austria
Bio-Rad Laboratories S.A- N.V.	Belgium
RSL N.V.	Belgium
Bio-Rad Laboratorios Brasil Ltda.	Brazil
Bio-Metrics Properties, Limited	California, USA
Bio-Rad Laboratories (Israel) Inc.	California, USA
Bio-Rad Pacific Limited	California, USA
Bio-Rad Laboratories (Canada) Limited	Canada
Bio-Rad Laboratories (Shanghai) Limited	China
Bio-Rad spol. sr.o.	Czech Republic
Bio-Metrics Ltd.	Delaware, USA
Bio-Rad Holdings LLC	Delaware, USA
Bio-Rad Laboratories APS	Denmark, USA
Bio-Rad France Holding	France
Bio-Rad Pasteur	France
ADIL Instruments	France
Bio-Rad Laboratories S.A.S.	France
Bio-Rad Verdot	France
Bio-Rad	France
Bio-Rad Laboratories G.m.b.H.	Germany
Bio-Rad Management G.m.b.H.	Germany
Bio-Rad Laboratories E.P.E	Greece
Bio-Rad China Limited	Hong Kong
Bio-Rad Hungary Trading Ltd	Hungary
Bio-Rad Laboratories(India) Private Limited	India
Bio-Rad Laboratories S.r.l.	Italy
Nippon Bio-Rad Laboratories K.K.	Japan
Bio-Rad Fujirebio Inc	Japan
MJ Japan Limited	Japan
Bio-Rad Korea Limited	Korea
International Marketing Ventures, Limited	Maryland, USA
MJ Research, Inc.	Massachusettes, USA
Bio-Rad, S.A.	Mexico
Bio-Rad Laboratories B.V.	The Netherlands
Bio-Rad Polska Sp. z o.o.	Poland
Bio-Rad Laboratoires-Aparelhos e Reagentes Hospitalares, LDA	Portugal
Bio-Rad Laboratorii OOO	Russia
Bio-Rad Laboratories (Singapore) Pte. Limited	Singapore
Bio-Rad Laboratories (Pty) Limited	South Africa

Bio-Rad Laboratories S.A.	Spain
Bio-Rad Laboratories AB	Sweden
Bio-Rad Laboratories AG	Switzerland
Bio-Rad Laboratories Taiwan Limited	Taiwan
Bio-Rad Laboratories Limited	Thailand
Bio-Rad Laboratories Europe Limited	United Kingdom
Bio-Rad Laboratories Limited	United Kingdom
Bio-Rad Micromeasurements Limited	United Kingdom
Bio-Rad Microscience Limited	United Kingdom

EX-23

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement No. 33-53335 and 33-5337 of Bio-Rad Laboratories, Inc. and subsidiaries on Form S-8 of our reports dated March 2, 2006, relating to the consolidated financial statements and financial statement schedule of Bio-Rad Laboratories, Inc. and subsidiaries and management's report on the effectiveness of internal control over financial reporting, appearing in or incorporated by reference in this Annual Report on Form 10-K of Bio-Rad Laboratories, Inc. for the year ended December 31, 2005.

/s/ Deloitte & Touche LLP

San Francisco, California

March 2, 2006

EX-31

Exhibit 31.1

Certification of Chief Executive Officer Required By

Exchange Act Rules 13a-14(a) and 15d-14(a)

I, Norman Schwartz, certify that:

1.

I have reviewed this annual report on Form 10-K of Bio-Rad Laboratories, Inc.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report fairly present, in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f))for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	March 2, 2006	/s/ Norman D. Schwartz
		Norman Schwartz
		Chief Executive Officer

EX-31

Exhibit 31.2

Certification of Chief Financial Officer Required By

Exchange Act Rules 13a-14(a) and 15d-14(a)

I, Christine A. Tsingos, certify that:

1.

I have reviewed this annual report on Form 10-K of Bio-Rad Laboratories, Inc.

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report fairly present, in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.

The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13-a-15(f) and 15d-15(f))for the registrant and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

        (d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.

The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonable likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	March 2, 2006	/s/ Christine A. Tsingos
		Christine A. Tsingos
		Vice President,
		Chief Financial Officer

EX-31

Exhibit 32.1

Certification of Periodic Report

I, Norman Schwartz, Chief Executive Officer of Bio-Rad Laboratories, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)

the Annual Report on Form 10-K of the Company for the year ended December 31, 2005 (the “Report”) fully complies with the requirements of Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  March 2, 2006	/s/ Norman Schwartz
	Norman Schwartz
	Chief Executive Officer

EX-32

Exhibit 32.2

Certification of Periodic Report

I, Christine A. Tsingos, Chief Financial Officer of Bio-Rad Laboratories, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

(1)

the Annual Report on Form 10-K of the Company for the year ended December 31, 2005 (the “Report”) fully complies with the requirements of Section 13 of the Securities Exchange Act of 1934 (15 U.S.C. 78m); and

(2)

the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  March 2, 2006	/s/ Christine A. Tsingos
	Christine A. Tsingos
	Vice President,
	Chief Financial Officer