10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 26, 2010

OR

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

For the transition period from                      to                     .

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)

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

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

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

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

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

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

TABLE OF CONTENTS

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

1

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)

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

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

2

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)

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

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

3

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

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

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

4

TELEFLEX INCORPORATED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)

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

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

5

TELEFLEX INCORPORATED AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1 — Basis of presentation

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

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

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

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

Note 2 — New accounting standards

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

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

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

6

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

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

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

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

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

Note 3 — Integration

Integration of Arrow

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

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

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

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

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

7

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

Note 4 — Restructuring and other impairment charges

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

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

2008 Commercial Segment Restructuring Program

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

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

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

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

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

2007 Arrow Integration Program

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

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

8

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

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

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

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

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

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

Impairment Charges

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

Note 5 — Impairment of goodwill and intangible assets

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

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

9

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

Note 6 — Inventories

Inventories consisted of the following:

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

Note 7—Goodwill and other intangible assets

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

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

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

Intangible assets consisted of the following:

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

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

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

10

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

Note 8 — Borrowings

The components of long-term debt are as follows:

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

Refinancing Transactions

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

11

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

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

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

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

Convertible Notes

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

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

12

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

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

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

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

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

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

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

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

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

13

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

Senior Credit Facility

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

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

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

Senior Note Amendments

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

14

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

Prepayment of 2007 Notes

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

Debt and equity issuance and amendment fees

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

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

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

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

Note 9 — Financial instruments

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

15

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

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

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

The location and amount of the gains and losses for derivatives in cash flow hedging relationships that were reported in other comprehensive income (“OCI”), accumulated other comprehensive income (“AOCI”) and the condensed consolidated statement of income for the three and nine months ended September 26, 2010 and September 27, 2009 are as follows:

	After Tax Gain/(Loss)
	Recognized in OCI
	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in thousands)
Interest rate	$	(92	)	$	(334	)	$	(243	)	$	8,928
Foreign exchange		(387	)		405			233			4,930
Total	$	(479	)	$	71		$	(10	)	$	13,858

	Pre-Tax (Gain)/Loss Reclassified
	from AOCI into Income
	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in thousands)
Interest rate contracts:
Interest expense	$	4,042		$	5,164		$	13,206		$	14,275
Foreign exchange contracts:
Net revenues		(228	)		(548	)		(206	)		225
Cost of goods sold		(957	)		694			(2,812	)		2,816
Selling, general and administrative expenses		2			(287	)		48			(287	)
Income from discontinued operations		—			31			—			235
Total	$	2,859		$	5,054		$	10,236		$	17,264

For the three and nine months ended September 26, 2010 and September 27, 2009, there was no ineffectiveness related to the Company’s derivatives.

16

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

The following table provides financial instruments activity included as part of accumulated other comprehensive income, net of tax:

	2010			2009
	(Dollars in thousands)
Balance at beginning of year	$	(17,343	)	$	(33,331	)
Dispositions		—			467
Additions and revaluations		(5,864	)		1,176
Clearance of hedge results to income		5,831			11,162
Tax rate adjustment		23			1,053
Balance at end of period	$	(17,353	)	$	(19,473	)

Note 10 — Fair value measurement

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of September 26, 2010 and September 27, 2009:

	Total carrying
	value at		Quoted prices in		Significant other		Significant
	September 26,		active markets		observable inputs		unobservable
	2010		(Level 1)		(Level 2)		inputs (Level 3)
	(Dollars in thousands)
Deferred compensation assets	$	3,724	$	3,724	$	—	$	—
Derivative assets	$	1,599	$	—	$	1,599	$	—
Derivative liabilities	$	28,854	$	—	$	28,854	$	—

	Total carrying
	value at		Quoted prices in		Significant other		Significant
	September 27,		active markets		observable inputs		unobservable
	2009		(Level 1)		(Level 2)		inputs (Level 3)
	(Dollars in thousands)
Deferred compensation assets	$	3,000	$	3,000	$	—	$	—
Derivative assets	$	1,234	$	—	$	1,234	$	—
Derivative liabilities	$	32,836	$	—	$	32,836	$	—

The carrying amount of long-term debt reported in the condensed consolidated balance sheet as of September 26, 2010 is $1,049.4 million. Using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile, the Company has determined the fair value of its debt to be $1,187.8 million at September 26, 2010. The Company’s implied credit rating is a factor in determining the market interest yield curve.

Valuation Techniques

The Company’s financial assets valued based upon Level 1 inputs are comprised of investments in marketable securities held in trusts which are used to pay benefits under certain deferred compensation plan benefits. Under these deferred compensation plans, participants designate investment options to serve as the basis for measurement of the notional value of their accounts. The investment assets of the trust are valued using quoted market prices multiplied by the number of shares held in the trust.

The Company’s financial assets valued based upon Level 2 inputs are comprised of foreign currency forward contracts. The Company’s financial liabilities valued based upon Level 2 inputs are comprised of an interest rate swap contract and foreign currency forward contracts. The Company has taken into account the creditworthiness of the counterparties in measuring fair value. The Company uses forward rate contracts to manage currency transaction exposure and interest rate swaps to manage exposure to interest rate changes. The fair value of the interest rate swap contract is developed from market-based inputs under the income approach using cash flows discounted at relevant market interest rates. The fair value of the foreign currency forward exchange contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. See Note 9, “Financial instruments” for additional information.

17

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

Note 11 —Changes in shareholders’ equity

In 2007, the Company’s Board of Directors authorized the repurchase of up to $300 million of outstanding Company common stock. Repurchases of Company stock under the Board authorization may be made from time to time in the open market and may include privately-negotiated transactions as market conditions warrant and subject to regulatory considerations. The stock repurchase program has no expiration date and the Company’s ability to execute on the program will depend on, among other factors, cash requirements for acquisitions, cash generation from operations, debt repayment obligations, market conditions and regulatory requirements. In addition, the Company’s senior loan agreements limit the aggregate amount of share repurchases and other restricted payments the Company may make to $75 million per year in the event the Company’s consolidated leverage ratio exceeds 3.5 to 1. Accordingly, these provisions may limit the Company’s ability to repurchase shares under this Board authorization. Through September 26, 2010, no shares have been purchased under this Board authorization.

The following table provides a reconciliation of basic to diluted weighted average shares outstanding:

	Three Months Ended				Nine Months Ended
	September 26,		September 27,		September 26,		September 27,
	2010		2009		2010		2009
	(Shares in thousands)
Basic		39,933		39,724		39,879		39,711
Dilutive shares assumed issued		321		208		390		199
Diluted		40,254		39,932		40,269		39,910

Weighted average stock options that were anti-dilutive and therefore not included in the calculation of earnings per share were approximately 6,717 thousand and 2,820 thousand for the three and nine month periods ended September 26, 2010 and approximately 1,923 thousand and 1,807 thousand for the three and nine month periods ended September 27, 2009, respectively. The increase in weighted average anti-dilutive shares for the three and nine month periods ended September 26, 2010 reflects the inclusion of the warrants that were issued in connection with the Convertible Notes. See Note 8, “Borrowings” for additional information.

Note 12 — Stock compensation plans

The Company has two stock-based compensation plans under which equity-based awards may be made. The Company’s 2000 Stock Compensation Plan (the “2000 plan”) provides for the granting of incentive and non-qualified stock options and restricted stock awards to directors, officers and key employees. Under the 2000 plan, the Company is authorized to issue up to 4 million shares of common stock, but no more than 800,000 of those shares may be issued as restricted stock. Options granted under the 2000 plan have an exercise price equal to the average of the high and low sales prices of the Company’s common stock on the date of the grant, rounded to the nearest $0.25. Generally, options granted under the 2000 plan are exercisable three to five years after the date of the grant and expire no more than ten years after the grant date. Restricted stock awards generally vest in one to three years. During the first nine months of 2010, the Company granted restricted stock awards representing 161,301 shares of common stock under the 2000 plan. The unrecognized compensation expense for these awards as of the grant date was $9.2 million, which will be recognized over the vesting period of the awards.

The Company’s 2008 Stock Incentive Plan (the “2008 plan”) provides for the granting of various types of equity-based awards to directors, officers and key employees. These awards include incentive and non-qualified stock options, stock appreciation rights, stock awards and other stock-based awards. Under the 2008 plan, the Company is authorized to issue up to 2.5 million shares of common stock, but grants of awards other than stock options and stock appreciation rights may not exceed 875,000 shares. Options granted under the 2008 plan have an exercise price equal to the closing price of the Company’s common stock on the date of grant. Generally, options granted under the 2008 plan are exercisable three years after the date of the grant and expire no more than ten years after the grant date. During the first nine months of 2010, the Company granted incentive and non-qualified options to purchase 590,042 shares of common stock under the 2008 plan. The unrecognized compensation expense for these awards as of the grant date was $7.3 million, which will be recognized over the vesting period of the awards.

Note 13 — Income taxes

The negative effective income tax rate for the three months ended September 26, 2010 of (34.3%), compared to 27.9% for the three months ended September 27, 2009, reflects the impact of (i) beneficial discrete tax charges recorded during the third quarter of 2010 for the loss on extinguishment of debt, a $5.7 million out of period tax adjustment, which management has determined was not material on a quantitative or qualitative basis to the prior period, associated with tax returns filed and tax audit conclusions and (ii) a reduction in the overall effective tax rate as a result of a shift in the mix of 2010 worldwide taxable income toward a higher foreign concentration at lower statutory rates.

18

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

The effective income tax rate for the nine months ended September 26, 2010 was 20.8% compared to 22.8% for the nine months ended September 27, 2009. The decrease in the effective income tax rate reflects the impact of beneficial discrete tax charges recorded during the third quarter of 2010 largely offset by the expiration of U.S. tax regulations in 2010 that enabled us to exclude certain foreign income from our U.S. taxable income in 2009.

Note 14 — Pension and other postretirement benefits

The Company has a number of defined benefit pension and postretirement plans covering eligible U.S. and non-U.S. employees. The defined benefit pension plans are noncontributory. The benefits under these plans are based primarily on years of service and employees’ pay near retirement. The Company’s funding policy for U.S. plans is to contribute annually, at a minimum, amounts required by applicable laws and regulations. Obligations under non-U.S. plans are systematically provided for by depositing funds with trustees or by book reserves.

In September 2010, the Company made a $30 million cash contribution to the Teleflex Retirement Income Plan (“TRIP”) to improve the funded status of the pension plan.

In 2009, a number of qualifying individuals accepted the Company’s offer of an early retirement program. As a result, the Company recognized special termination benefits of $402 thousand in pension expense and $395 thousand in postretirement expense in the second quarter of 2009.

The Company and certain of its subsidiaries provide medical, dental and life insurance benefits to pensioners and survivors. The associated plans are unfunded and approved claims are paid from Company funds.

Net benefit cost of pension and postretirement benefit plans consisted of the following:

	Pension						Other Benefits					Pension						Other Benefits
	Three Months Ended						Three Months Ended					Nine Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,		September 26,			September 27,			September 26,		September 27,
	2010			2009			2010			2009		2010			2009			2010		2009
	(Dollars in Thousands)
Service cost	$	688		$	619		$	183		$	87	$	2,123		$	2,036		$	653	$	654
Interest cost		4,539			4,861			544			718		13,865			13,890			2,083		2,518
Expected return on plan assets		(4,895	)		(3,796	)		—			—		(13,617	)		(11,173	)		—		—
Net amortization and deferral		1,106			983			(101	)		141		3,264			3,461			328		582
Settlement gain		—			—			—			—		(35	)		—			—		—
Special termination costs		—			—			—			—		—			402			—		395
Net benefit cost	$	1,438		$	2,667		$	626		$	946	$	5,600		$	8,616		$	3,064	$	4,149

19

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

Note 15 — Commitments and contingent liabilities

Product warranty liability: The Company warrants to the original purchasers of certain of its products that it will, at its option, repair or replace such products, without charge, if they fail due to a manufacturing defect. Warranty periods vary by product. The Company has recourse provisions for certain products that would enable recovery from third parties for amounts paid under the warranty. The Company accrues for product warranties when, based on available information, it is probable that customers will make claims under warranties relating to products that have been sold, and a reasonable estimate of the costs (based on historical claims experience relative to sales) can be made. The following table provides information regarding changes in the Company’s product warranty liability accruals for the nine months ended September 26, 2010 (dollars in thousands):

Balance — December 31, 2009	$	12,085
Accruals for warranties issued in 2010		2,662
Settlements (cash and in kind)		(4,370	)
Accruals related to pre-existing warranties		472
Effect of translation		(213	)
Balance — September 26, 2010	$	10,636

Operating leases: The Company uses various leased facilities and equipment in its operations. The terms for these leased assets vary depending on the lease agreement. In connection with these operating leases, the Company had residual value guarantees in the amount of approximately $9.2 million at September 26, 2010. The Company’s future payments under the operating leases cannot exceed the minimum rent obligation plus the residual value guarantee amount. The residual value guarantee amounts are based upon the unamortized lease values of the assets under lease, and are payable by the Company if the Company declines to renew the leases or to exercise its purchase option with respect to the leased assets. At September 26, 2010, the Company had no liabilities recorded for these obligations. Any residual value guarantee amounts paid to the lessor may be recovered by the Company from the sale of the assets to a third party.

Environmental: The Company is subject to contingencies as a result of environmental laws and regulations that in the future may require the Company to take further action to correct the effects on the environment of prior disposal practices or releases of chemical or petroleum substances by the Company or other parties. Much of this liability results from the U.S. Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), often referred to as Superfund, the U.S. Resource Conservation and Recovery Act (“RCRA”) and similar state laws. These laws require the Company to undertake certain investigative and remedial activities at sites where the Company conducts or once conducted operations or at sites where Company-generated waste was disposed.

Remediation activities vary substantially in duration and cost from site to site. These activities, and their associated costs, depend on the mix of unique site characteristics, evolving remediation technologies, diverse regulatory agencies and enforcement policies, as well as the presence or absence of other potentially responsible parties. At September 26, 2010, the Company’s condensed consolidated balance sheet included an accrued liability of approximately $7.9 million relating to these matters. Considerable uncertainty exists with respect to these costs and, if adverse changes in circumstances occur, potential liability may exceed the amount accrued as of September 26, 2010. The time frame over which the accrued amounts may be paid out, based on past history, is estimated to be 15-20 years.

Regulatory matters: On October 11, 2007, the Company’s subsidiary, Arrow International, Inc. (“Arrow”), received a corporate warning letter from the U.S. Food and Drug Administration (FDA). The letter expressed concerns with Arrow’s quality systems, including complaint handling, corrective and preventive action, process and design validation, inspection and training procedures. It also advised that Arrow’s corporate-wide program to evaluate, correct and prevent quality system issues had been deficient.

The Company developed and implemented a comprehensive plan to correct the issues raised in the letter and further improve overall quality systems. From the end of 2009 to the beginning of 2010, the FDA reinspected the Arrow facilities covered by the corporate warning letter, and Arrow has responded to the observations issued by the FDA as a result of those inspections. Communications received from the FDA indicate that the FDA has classified its inspection observations as “voluntary action indicated,” or VAI. This classification signifies that the FDA has concluded that no further regulatory action is required, and that any observations made during the inspections can be addressed voluntarily by the Company. In addition, in the third quarter of 2010, Arrow submitted and received FDA approval of all currently eligible requests for certificates to foreign governments, or CFGs. The Company believes that the FDA’s approval of its CFG requests is a clear indication that Arrow has substantially corrected the quality system issues identified in the corporate warning letter. The Company is continuing to work with the FDA to resolve all remaining issues and obtain formal closure of the corporate warning letter.

20

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

While the Company continues to believe it has substantially remediated the issues raised in the corporate warning letter through the corrective actions taken to date, the corporate warning letter remains in place pending final resolution of all outstanding issues, which the Company is actively working with the FDA to resolve. If the Company’s remedial actions are not satisfactory to the FDA, the Company may have to devote additional financial and human resources to its efforts, and the FDA may take further regulatory actions against the Company.

Litigation: The Company is a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, intellectual property, employment and environmental matters. Based on information currently available, advice of counsel, established reserves and other resources, the Company does not believe that any such actions are likely to be, individually or in the aggregate, material to its business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to the Company’s business, financial condition, results of operations or liquidity. Legal costs such as outside counsel fees and expenses are charged to expense in the period incurred.

Tax audits and examinations: On September 30, 2010, the applicable Statute of Limitations with respect to the Company’s consolidated U.S. Tax Returns for the years 2003-2005 expired. In addition, on October 11, 2010, the Company received notice from the Department of Treasury that the Joint Committee on Taxation had completed its review of the Internal Revenue Service’s examination report with respect to Arrow International’s taxable periods ended August 31, 2006 and October 1, 2007, and was taking no exception to the conclusions reached by the Internal Revenue Service. The Company and the Internal Revenue Service had previously agreed on the conclusions reached in that examination report. This step effectively concludes the examination of those periods. As a result of the expiration of these Statutes and the conclusion of the Arrow International examination, the company will record previously unrecognized tax benefits of approximately $24 million in the fourth quarter of 2010.

The Company and its subsidiaries are routinely subject to tax examinations by various taxing authorities. As of September 26, 2010, the most significant tax examinations in process are in the Unites States, Germany, Czech Republic, Italy and France. In conjunction with these examinations and as a regular and routine practice, the Company may determine a need to establish certain reserves or to adjust existing reserves with respect to uncertain tax positions. Accordingly, developments occurring with respect to and/or resolutions of these examinations could result in increases or decreases to our recorded tax liabilities, which could impact our financial results.

Other: The Company has various purchase commitments for materials, supplies and items of permanent investment incident to the ordinary conduct of business. On average, such commitments are not at prices in excess of current market.

21

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

Note 16 — Business segment information

Information about continuing operations by business segment is as follows:

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in thousands)
Segment data:
Medical	$	345,041		$	350,576		$	1,047,005		$	1,043,639
Aerospace		46,836			45,847			131,704			126,537
Commercial		51,116			44,318			147,158			124,845
Segment net revenues	$	442,993		$	440,741		$	1,325,867		$	1,295,021
Medical	$	66,047		$	73,159		$	213,012		$	220,363
Aerospace		8,076			4,554			17,381			8,611
Commercial		6,162			4,104			15,623			7,740
Segment operating profit		80,285			81,817			246,016			236,714
Less: Corporate expenses		12,011			9,040			29,477			30,612
Net (gain) loss on sales of businesses and assets		(183	)		—			(183	)		2,597
Goodwill impairment		—			—			—			6,728
Restructuring and other impairment charges		1,141			4,783			1,679			13,412
Noncontrolling interest		(339	)		(305	)		(1,003	)		(843	)
Income from continuing operations before interest, loss on extinguishments of debt and taxes	$	67,655		$	68,299		$	216,046		$	184,208

Note 17 — Divestiture-related activities

When dispositions occur in the normal course of business, gains or losses on the sale of such businesses or assets are recognized in the income statement line item Net (gain) loss on sales of businesses and assets.

The following table provides the amount of Net (gain) loss on sales of businesses and assets for the periods presented:

	Three Months Ended					Nine Months Ended
	September 26,			September 27,		September 26,			September 27,
	2010			2009		2010			2009
	(Dollars in thousands)
Net (gain) loss on sales of businesses and assets	$	(183	)	$	—	$	(183	)	$	2,597

During the third quarter of 2010, the Company realized a $0.2 million gain on the sale of its interest in an affiliate in India.

During the first quarter of 2009, the Company realized a loss of $2.6 million on the sale of a product line in its Marine business.

Discontinued Operations

On June 25, 2010, the Company completed the sale of its rigging products and services business (“Heavy Lift”), a reporting unit within its Commercial Segment, to Houston Wire & Cable Company for $50 million and realized a gain of $17.1 million, net of tax, from the sale of the business.

On March 2, 2010, the Company completed the sale of its SSI Surgical Services Inc. business (“SSI”), a reporting unit within its Medical Segment, to a privately-owned healthcare company for approximately $25 million and realized a gain of $2.0 million, net of tax.

During the third quarter of 2009, the Company completed the sale of its Power Systems operations to Fuel Systems Solutions, Inc. for $14.5 million and realized a loss of $3.3 million, net of tax.

22

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

On March 20, 2009, the Company completed the sale of its 51 percent share of Airfoil Technologies International — Singapore Pte. Ltd. (“ATI Singapore”) to GE Pacific Private Limited for $300 million in cash. ATI Singapore, which provides engine repair products and services for critical components of flight turbines, was part of a joint venture between General Electric Company (“GE”) and the Company. In December 2009, the Company completed the transfer of its ownership interest in the remaining ATI business to GE.

The prior period financial statements have been revised to present SSI and Heavy Lift businesses as discontinued operations.

The following table presents the operating results of the operations that have been treated as discontinued operations for the periods presented:

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in thousands)
Net revenues	$	—		$	24,952		$	37,284		$	191,127
Costs and other expenses		—			24,358			34,545			162,789
Goodwill impairment(1)		—			—			—			25,145
Loss (gain) on disposition		—			3,480			(38,562	)		(272,307	)
(Loss) income from discontinued operations before income taxes		—			(2,886	)		41,301			275,500
Taxes (benefit) for income taxes(2)		905			(7,281	)		21,322			95,267
(Loss) income from discontinued operations		(905	)		4,395			19,979			180,233
Less: Income from discontinued operations attributable to noncontrolling interest		—			—			—			9,860
(Loss) income from discontinued operations attributable to common shareholders	$	(905	)	$	4,395		$	19,979		$	170,373

(1)	During the second quarter of 2009, the Company recognized a non-cash, non-tax deductible goodwill impairment charge of $25.1 million to adjust the carrying value of Power Systems operations to its estimated fair value.
(2)	Taxes on discontinued operations for the three months ended September 26, 2010 are related to tax returns filed and tax audit conclusions.

Net assets and liabilities of the discontinued operations sold in 2010 were comprised of the following:

	(Dollars in thousands)
Net assets	$	54,619
Net liabilities		(11,577	)
	$	43,042

23

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

All statements made in this Quarterly Report on Form 10-Q, other than statements of historical fact, are forward-looking statements. The words “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “will,” “would,” “should,” “guidance,” “potential,” “continue,” “project,” “forecast,” “confident,” “prospects,” and similar expressions typically are used to identify forward-looking statements. Forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about our business and the industry and markets in which we operate. These statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or implied by these forward-looking statements due to a number of factors, including our ability to resolve, to the satisfaction of the U.S. Food and Drug Administration (FDA), the issues identified in the corporate warning letter issued to Arrow International; changes in business relationships with and purchases by or from major customers or suppliers, including delays or cancellations in shipments; demand for and market acceptance of new and existing products; our ability to integrate acquired businesses into our operations, realize planned synergies and operate such businesses profitably in accordance with expectations; our ability to effectively execute our restructuring programs; competitive market conditions and resulting effects on revenues and pricing; increases in raw material costs that cannot be recovered in product pricing; and global economic factors, including currency exchange rates and interest rates; difficulties entering new markets; and general economic conditions. For a further discussion of the risks relating to our business, see Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2009. We expressly disclaim any obligation to update these forward-looking statements, except as otherwise specifically stated by us or as required by law or regulation.

Overview

Teleflex is principally a global provider of medical technology products that enable healthcare providers to improve patient outcomes, reduce infections and enhance patient and provider safety. We primarily develop, manufacture and supply single-use medical devices used by hospitals and healthcare providers for common diagnostic and therapeutic procedures in critical care and surgical applications. We serve hospitals and healthcare providers in more than 140 countries.

We provide a broad-based platform of medical products, which we categorize into four groups: Critical Care, Surgical Care, Cardiac Care and OEM and Development Services. Critical Care, representing our largest product group, includes medical devices used in vascular access, anesthesia, urology and respiratory care applications; Surgical Care includes surgical instruments and devices; and Cardiac Care includes cardiac assist devices and equipment. OEM and Development Services design and manufacture instruments and devices for other medical device manufacturers.

In addition to our medical business, we also have businesses that serve niche segments of the aerospace and commercial markets with specialty engineered products. Our aerospace products include cargo-handling systems, containers, and pallets for commercial air cargo, and military aircraft actuators. Our commercial products include driver controls, engine assemblies and drive parts for the marine industry.

Over the past several years, we have engaged in an extensive acquisition and divestiture program to improve margins, reduce cyclicality and focus our resources on the development of our healthcare business. We have significantly changed the composition of our portfolio of businesses, expanding our presence in the medical device industry, while divesting many of our businesses serving the aerospace and commercial markets. The most significant of these transactions occurred in 2007 with our acquisition of Arrow International, a leading global supplier of catheter-based medical technology products used for vascular access and cardiac care, and the divestiture of our automotive and industrial businesses. Our acquisition of Arrow significantly expanded our single-use medical product offerings for critical care, enhanced our global footprint and added to our research and development capabilities.

We continually evaluate the composition of the portfolio of our products and businesses to ensure alignment with our overall objectives. We strive to maintain a portfolio of products and businesses that provide consistency of performance, improved profitability and sustainable growth.

On June 25, 2010, we completed the sale of our rigging products and services business (“Heavy Lift”), a reporting unit within our Commercial Segment, to Houston Wire & Cable Company for $50 million and realized a gain of $17.1 million, net of tax, from the sale of the business.

On March 2, 2010, we completed the sale of our SSI Surgical Services Inc. business (“SSI”), a reporting unit within our Medical Segment, to a privately-owned healthcare company for approximately $25 million. We realized a gain of $2.0 million, net of tax, on this transaction.

24

During the third quarter of 2009, we completed the sale of our Power Systems operations to Fuel Systems Solutions, Inc. for $14.5 million and realized a loss of $3.3 million, net of tax. During the second quarter of 2009, we recognized a non-cash goodwill impairment charge of $25.1 million to adjust the carrying value of the Power Systems operations to their estimated fair value.

On March 20, 2009, we completed the sale of our 51 percent ownership interest in ATI Singapore to GE Pacific Private Limited for $300 million in cash. ATI Singapore, which provides engine repair products and services for critical components of flight turbines, was part of a joint venture between General Electric Company (“GE”) and us. In December 2009, we completed the transfer of our ownership interest in the remaining ATI business (together with ATI Singapore, the “ATI businesses”) to GE for a nominal amount.

The prior period financial statements have been revised to present SSI and Heavy Lift businesses as discontinued operations. See Note 17 to our condensed consolidated financial statements included in this report for discussion of discontinued operations.

The Medical, Aerospace and Commercial segments comprised 79%, 10% and 11% of our revenues, respectively, for the nine months ended September 26, 2010 and comprised 81%, 10% and 9% of our revenues, respectively, for the same period in 2009.

Health Care Reform

On March 23, 2010 the Patient Protection and Affordable Care Act was signed into law. This legislation will have a significant impact on our business. For medical device companies such as Teleflex, the expansion of medical insurance coverage should lead to greater utilization of the products we manufacture, but this legislation also contains provisions designed to contain the cost of healthcare, which could negatively affect pricing of our products. In addition, commencing in 2013, the legislation imposes a 2.3% excise tax on sales of medical devices. As this new law is implemented over the next 2-3 years, we will be in a better position to ascertain its impact on our business. We currently estimate the impact of the medical device excise tax will be approximately $16 million annually, beginning in 2013. Also in the first quarter of 2010, we evaluated the change in the tax regulations related to the Medicare Part D subsidy as currently outlined in the new legislation and determined that it did not have a significant impact on our financial position or results of operations.

Results of Operations

Discussion of growth from acquisitions reflects the impact of a purchased company for up to twelve months beyond the date of acquisition. Activity beyond the initial twelve months is considered core growth. Core growth excludes the impact of translating the results of international subsidiaries at different currency exchange rates from year to year and the comparable activity of divested companies within the most recent twelve-month period.

Revenues

	Three Months Ended				Nine Months Ended
	September 26,		September 27,		September 26,		September 27,
	2010		2009		2010		2009
	(Dollars in millions)
Net revenues	$	443.0	$	440.7	$	1,325.9	$	1,295.0

Net revenues for the third quarter of 2010 increased approximately 1% to $443.0 million from $440.7 million in the third quarter of 2009. Core growth for the quarter was 4%, offset by foreign currency translation which negatively impacted sales by 2%. The deconsolidation of a variable interest entity in our Medical Segment in the first quarter of 2010 due to the adoption of new accounting guidance caused an additional 1% decline in revenue. Core revenues were higher in the Aerospace Segment (5%), due to improving conditions in commercial aviation markets, and in the Commercial Segment (15%), as recreational boating markets recover from the depressed levels of 2009. Core revenues in the Medical Segment were 2% higher than the third quarter of 2009 as the negative impact of a voluntary recall of a product in our critical care product group and lower sales of orthopedic devices sold to medical original equipment manufacturers, or OEMs, was more than offset by higher sales of other critical care, surgical and cardiac care products.

Net revenues for the first nine months of 2010 increased approximately 2% to $1,325.9 million from $1,295.0 million in 2009. Core growth was 3%, while the disposition of a product line in the Commercial Segment during the first quarter of 2009 and the deconsolidation of an entity in the Medical Segment in the first quarter of 2010 resulted in an aggregate 1% decline in revenues. Each of our three segments reported higher core revenues: Medical (1%), Aerospace (5%) and Commercial (19%).

25

Gross profit

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in millions)
Gross profit	$	203.1		$	196.3		$	606.2		$	578.9
Percentage of sales		45.8	%		44.5	%		45.7	%		44.7	%

For the third quarter and for the nine month periods ended September 26, 2010, gross profit as a percentage of revenues increased in each of our three segments compared to the corresponding periods of 2009 as a result of core growth, and, in the Medical Segment, due to the stronger Canadian dollar as compared to the same periods in 2009.

Selling, general and administrative

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in millions)
Selling, general and administrative	$	123.4		$	113.6		$	357.7		$	344.3
Percentage of sales		27.9	%		25.8	%		27.0	%		26.6	%

Selling, general and administrative expenses as a percentage of revenues for the third quarter of 2010 increased to 27.9% from 25.8% in 2009. The $10 million increase in costs was due to approximately $8 million of higher spending, principally related to Medical Segment sales, marketing, regulatory and administrative activities and approximately $2 million of professional fees incurred in connection with our debt refinancing during the third quarter.

Selling, general and administrative expenses as a percentage of revenues for the first nine months of 2010 increased to 27.0% from 26.6% in 2009. The $13 million increase in costs was principally related to $18 million in higher costs in the Medical Segment largely due to sales, marketing, regulatory and administrative activities, partially offset by reductions in the Aerospace and Commercial segments and Corporate costs of approximately $5 million.

Research and development

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in millions)
Research and development	$	11.0		$	9.6		$	30.9		$	27.7
Percentage of sales		2.5	%		2.2	%		2.3	%		2.1	%

Higher levels of research and development expenses reflect increased investments related to antimicrobial technologies and the establishment of an innovation center in Malaysia.

Interest expense

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
	(Dollars in millions)
Interest expense	$	20.1		$	21.1		$	58.7		$	68.5
Average interest rate on debt		5.6	%		5.8	%		5.6	%		5.8	%

Interest expense decreased in the third quarter of 2010 compared to the same period of 2009 due to a reduction of approximately $123 million in average outstanding debt. For the first nine months of 2010, average outstanding debt was approximately $178 million lower compared to the corresponding period of 2009.

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Loss on extinguishments of debt

During the three and nine months ended September 26, 2010 we recognized $30.4 million of losses on the extinguishment of debt as a result of our refinancing transactions, which are described in Note 8 to the consolidated financial statements included in this report. In connection with the prepayment of our Senior Notes issued in 2007 (the “2007 Notes”), we recognized debt extinguishment costs of approximately $28.8 million relating to the prepayment make-whole fee of $28.1 million, the write-off of $0.6 million of unamortized debt issuance costs incurred prior to the refinancing transactions and related legal fees. In connection with the repayment of $200 million of our Senior Credit Facility, we recognized additional losses on the extinguishment of debt of $1.6 million related to the write-off of unamortized debt issuance costs incurred prior to the refinancing transactions.

Taxes on income from continuing operations

	Three Months Ended						Nine Months Ended
	September 26,			September 27,			September 26,			September 27,
	2010			2009			2010			2009
Effective income tax rate		(34.3)	%		27.9	%		20.8	%		22.8	%

The negative effective income tax rate for the three months ended September 26, 2010 of (34.3%), compared to 27.9% for the three months ended September 27, 2009, reflects the impact of (i) beneficial discrete tax charges recorded during the third quarter of 2010 for the loss on extinguishment of debt, a $5.7 million out of period tax adjustment, which management has determined was not material on a quantitative or qualitative basis to the prior period, associated with tax returns filed and tax audit conclusions and (ii) a reduction in the overall effective tax rate as a result of a shift in the mix of 2010 worldwide taxable income toward a higher foreign concentration at lower statutory rates.

The effective income tax rate for the nine months ended September 26, 2010 was 20.8% compared to 22.8% for the nine months ended September 27, 2009. The decrease in the effective income tax rate reflects the impact of beneficial discrete tax charges recorded during the third quarter of 2010 largely offset by the expiration of U.S. tax regulations in 2010 that enabled us to exclude certain foreign income from our U.S. taxable income in 2009.

Goodwill impairment

	Three Months Ended				Nine Months Ended
	September 26,		September 27,		September 26,		September 27,
	2010		2009		2010		2009
	(Dollars in millions)
Goodwill impairment	$	—	$	—	$	—	$	6.7

We performed an interim review of goodwill for our Cargo Container reporting unit during the second quarter of 2009 as a result of the difficult market conditions confronting the Cargo Container reporting unit and the significant deterioration in its operating performance, which accelerated in the second quarter of 2009. Upon conclusion of this review, we determined that goodwill in the Cargo Container operations was impaired, and we recorded an impairment charge of $6.7 million in the second quarter of 2009.

Restructuring and other impairment charges

	Three Months Ended				Nine Months Ended
	September 26,		September 27,		September 26,		September 27,
	2010		2009		2010		2009
	(Dollars in millions)
2008 Commercial Segment Restructuring Program	$	—	$	0.2	$	—	$	2.2
2007 Arrow Integration Program		1.1		1.3		1.7		5.4
Impairment charges — intangibles and fixed assets		—		3.3		—		5.8
Restructuring and other impairment charges	$	1.1	$	4.8	$	1.7	$	13.4

In December 2008, we began certain restructuring initiatives that affected the Commercial Segment. These initiatives involved the consolidation of operations and a related reduction in workforce at three of our facilities in Europe and North America. We determined to undertake these initiatives to improve operating performance and to better leverage our existing resources in light of expected weakness in the marine and industrial markets. By December 31, 2009, we had completed the 2008 Commercial Segment restructuring program and all costs associated with the program were fully paid during 2009. Therefore, no charges were recorded under this program in 2010. We expect to realize annual pre-tax savings of between $3.5 — $4.5 million in 2010 as a result of actions taken in connection with this program.

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In connection with the acquisition of Arrow in 2007, we formulated a plan related to the integration of Arrow and our other Medical businesses. The integration plan focused on the closure of Arrow corporate functions and the consolidation of manufacturing, sales, marketing and distribution functions in North America, Europe and Asia. Costs related to actions that affected employees and facilities of Arrow have been included in the allocation of the purchase price of Arrow. Costs related to actions that affected employees and facilities of Teleflex are charged to earnings and included in restructuring and impairment charges within the condensed consolidated statement of operations. These costs amounted to approximately $1.1 million and $1.7 million during the three and nine months ended September 26, 2010, respectively. As of September 26, 2010, we estimate that, for the remainder of 2010, the aggregate of future restructuring and impairment charges that we will incur in connection with the Arrow integration plan are approximately $0.5 - $0.9 million. Of this amount, $0.3 — $0.5 million relates to employee termination costs, $0.1 - $0.2 million relates to facility closure costs and $0.1 — $0.2 million relates to contract termination costs associated with the termination of a European distributor agreement. We expect to have realized aggregate annual pre-tax savings of between $70 — $75 million after these integration and restructuring actions are complete.

For additional information regarding our restructuring programs, see Note 4 to our condensed consolidated financial statements included in this report.

Segment Reviews

	Three Months Ended							Nine Months Ended
					%							%
	September 26,		September 27,		Increase/			September 26,		September 27,		Increase/
	2010		2009		(Decrease)			2010		2009		(Decrease)
	(Dollars in millions)							(Dollars in millions)
Medical	$	345.1	$	350.6		(2	)	$	1,047.0	$	1,043.7		—
Aerospace		46.8		45.8		2			131.7		126.5		4
Commercial		51.1		44.3		15			147.2		124.8		18
Segment net revenues	$	443.0	$	440.7		1		$	1,325.9	$	1,295.0		2
Medical	$	66.0	$	73.2		(10	)	$	213.0	$	220.4		(3	)
Aerospace		8.1		4.5		80			17.4		8.6		102
Commercial		6.2		4.1		51			15.6		7.7		103
Segment operating profit (1)	$	80.3	$	81.8		(2	)	$	246.0	$	236.7		4

(1) See Note 16 of our condensed consolidated financial statements for a reconciliation of segment operating profit to income from continuing operations before interest, loss on extinguishments of debt and taxes.

The percentage changes in net revenues during the three and nine months ended September 26, 2010 compared to the same period in 2009 are due to the following factors:

	% Increase/ (Decrease)
	2010 vs. 2009
	Medical						Aerospace						Commercial					Total
	Three			Nine			Three			Nine			Three		Nine			Three			Nine
	Months			Months			Months			Months			Months		Months			Months			Months
Core growth		2			1			5			5			15		19			4			3
Currency impact		(3	)		—			(3	)		(1	)		—		1			(2	)		—
Dispositions(a)		(1	)		(1	)		—			—			—		(2	)		(1	)		(1	)
Total change		(2	)		—			2			4			15		18			1			2

(a) “Dispositions” includes the impact of a deconsolidation of a variable interest entity in the Medical Segment in the first quarter of 2010 as a result of the adoption of new accounting guidance. See Note 2 to our condensed consolidated financial statements included in this report for information on the new accounting guidance.

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The following is a discussion of our segment operating results.

Comparison of the three and nine months ended September 26, 2010 and September 27, 2009

Medical

Medical Segment net revenues declined 2% in the third quarter of 2010 to $345.1 million, from $350.6 million in the same period last year. The decrease was a result of foreign currency movements (3%) and the impact of the deconsolidation of a variable interest entity due to the adoption of new accounting guidance in the first quarter of 2010 (1%), which more than offset the increase in core revenue (2%). Core revenue increases in respiratory, urology, anesthesia, surgical, cardiac care and specialty products sold to medical OEM’s were somewhat offset by a decline in vascular access sales. The decline in vascular access sales was due to the voluntary recall of custom IV tubing product that was announced in February 2010.

Net revenues for the first nine months of 2010 of $1,047.0 million were essentially unchanged from the $1,043.7 million reported in the same period last year, as core growth of 1% was offset by the impact of the deconsolidation of a variable interest entity (1%). The increase in core revenue was predominantly in the European and Asia/Latin American critical care product groups and OEM specialty sutures and other devices, offset by declines in OEM orthopedic implant products and in North American surgical products.

Information regarding net revenues by product group is provided in the following tables.

					% Increase/ (Decrease)
	Three Months Ended							Currency
	September 26,		September 27,		Core			Impact/			Total
	2010		2009		Growth			Other			Change
	(Dollars in millions)
Critical Care	$	226.2	$	231.5		—			(2	)		(2	)
Surgical		61.6		61.4		3			(3	)		—
Cardiac Care		17.4		16.9		6			(3	)		3
OEM		39.5		37.6		7			(2	)		5
Other		0.4		3.2		(18	)		(70	)(a)		(88	)
Total net sales	$	345.1	$	350.6		2			(4	)		(2	)

					% Increase/ (Decrease)
	Nine Months Ended							Currency
	September 26,		September 27,		Core			Impact/			Total
	2010		2009		Growth			Other			Change
	(Dollars in millions)
Critical Care	$	685.7	$	680.5		1			—			1
Surgical		191.0		192.1		(1	)		—			(1	)
Cardiac Care		54.5		51.6		6			—			6
OEM		113.8		109.4		5			(1	)		4
Other		2.0		10.1		(13	)		(67	)(a)		(80	)
Total net sales	$	1,047.0	$	1,043.7		1			(1	)		—

(a) “Other” in 2009 included the net revenues of a variable interest entity that was deconsolidated in the first quarter of 2010 as a result of the adoption of new accounting guidance. See Note 2 to our condensed consolidated financial statements for information on the new accounting guidance.

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Medical Segment net revenues for the nine months ended September 26, 2010 and September 27, 2009, respectively, by geographic location were as follows:

	2010			2009
North America		52	%		53	%
Europe, Middle East and Africa		36	%		36	%
Asia and Latin America		12	%		11	%

The recall of our custom IV tubing product during the first quarter of 2010, which contributed to a decline in vascular access sales, had a negative impact on sales of our critical care products during the three and nine month periods ended September 26, 2010. This impact on the third quarter was offset by higher sales of anesthesia products (principally in Europe and North America) and respiratory products in Asia/Latin America compared with the prior year quarter.

Surgical core revenue increased approximately 3% in the third quarter of 2010 compared with 2009, primarily attributed to higher sales in Europe and Asia/Latin America. For the first nine months of 2010, surgical core revenue decreased 1% due to lower sales of general instrument and closure devices, mainly in North America which were partially offset by higher ligation sales in Europe and Asia/Latin America.

Core revenue of cardiac care products during the third quarter of 2010 compare favorably to the same period of 2009 due to higher sales of intra aortic balloon pumps and catheters, primarily in European markets.

Core revenue to OEMs increased 7% in the third quarter of 2010 and 5% for the first nine months of 2010 compared with 2009. This increase is largely attributable to higher sales of specialty suture and catheter fabrication products, partially offset by lower sales of orthopedic implant products due to customer inventory rebalancing, a reduction in new product launches by OEM customers and overall weakness in the OEM orthopedic markets.

Operating profit in the Medical Segment decreased 10%, from $73.2 million in the third quarter of 2009 to $66.0 million during the third quarter of 2010. Operating profit during the third quarter of 2010 was unfavorably impacted by approximately $9 million higher spending on sales, marketing, regulatory, administrative and research and development activities. This higher spending and the stronger US dollar against the Euro more than offset the additional gross profit from the 2% core revenue growth during the quarter.

Medical Segment operating profit decreased 3%, from $220.4 million during the first nine months of 2009 to $213.0 million during the first nine months of 2010. The positive impact on operating profit from a weaker U.S. dollar against the Canadian dollar and approximately $6 million of lower manufacturing costs during the first nine months of 2010 as a result of cost reduction initiatives, including restructuring and integration activities in connection with the Arrow acquisition and $3 million lower expenses related to the remediation of FDA regulatory issues, were more than offset by approximately $24 million higher spending on sales, marketing, regulatory, administrative and research and development activities.

Aerospace

Aerospace Segment revenues increased 2% in the third quarter of 2010 to $46.8 million, from $45.8 million in the same period in 2009 and increased 4% for the first nine months of 2010 to $131.7 million, from $126.5 million in the first nine months of 2009. During the third quarter, core revenue increased 5%, while currency movements decreased sales by 3%. Higher sales of (i) cargo system spare components and repairs, (ii) actuation products, (iii) narrow-body cargo handling systems and (iv) cargo containers were somewhat offset by lower sales of wide-body cargo handling systems to aircraft manufacturers and cargo systems for aftermarket conversions. For the first nine months of 2010, core revenue increased 5%, while currency movements decreased sales by 1% compared to the same period of 2009. The core growth is due principally to higher sales of wide-body cargo handling systems, cargo system spare components and repairs, and actuation products, which were somewhat offset by lower sales of narrow-body cargo handling systems.

Segment operating profit increased 80% in the third quarter of 2010 to $8.1 million, compared to $4.5 million in the same period of 2009, and increased 102% for the first nine months of 2010 to $17.4 million, compared to $8.6 million for the first nine months of 2009. The increase in operating profit for the third quarter was primarily due to a favorable sales mix of higher margin cargo system spare components and repairs, and manufacturing efficiencies achieved in the production of wide-body cargo handling systems for aircraft manufacturers. The higher operating profit for the first nine months of 2010 compared to the same period of 2009 is a result of essentially the same factors applicable to the third quarter operating profit increase. In addition, operating profit for the nine months ended September 26, 2010 was adversely affected by the impact of a $1.2 million write-down of certain actuation products to net realizable value during the second quarter of 2009.

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Commercial

Commercial Segment revenues increased approximately 15% in the third quarter of 2010 to $51.1 million, from $44.3 million in the same period last year. Core growth accounted for the entire increase in sales. Higher sales of marine products to OEM manufacturers for the recreational boat market and spare parts in the marine aftermarket accounted for 17% of sales growth while lower sales of industrial non-marine products negatively impacted sales growth 2%. Higher sales of Marine products are indicative of improved conditions in that sector compared to the significantly depressed conditions that existed during the third quarter of 2009.

Commercial Segment revenues increased approximately 18% in the first nine months of 2010 to $147.2 million, from $124.8 million in the same period last year. Core growth of 19% and favorable currency movements of 1% were partially offset by the impact from the divestiture of a marine product line in the first quarter of 2009 (2%). Higher sales of marine products to OEM manufacturers for the recreational boat market and spare parts in the marine aftermarket accounted for 22% of sales growth while lower sales of industrial non-marine products negatively impacted sales growth by 4%.

During the third quarter of 2010, operating profit in the Commercial Segment increased 51% to $6.2 million, compared to $4.1 million in the third quarter of 2009. The trend in operating income was primarily the result of higher sales volumes.

For the first nine months of 2010, Commercial Segment operating income increased 103% to $15.6 million, compared to $7.7 million for the same period last year. This increase principally was due to higher sales volumes of marine products to OEM manufacturers for the recreational boat market and spare parts in the marine aftermarket, as well as a reduction in factory costs of approximately $2.0 million resulting from facility consolidations in 2009.

Liquidity and Capital Resources

Refinancing Transactions

In August 2010, we entered into a series of refinancing transactions comprised of (i) a public offering of $400.0 million aggregate principal amount of 3.875% Convertible Senior Subordinated Notes due 2017 (the “Convertible Notes”), (ii) the amendment of certain terms of our senior credit facilities, (iii) the extension of the maturity of a portion of our borrowings under the senior credit facilities, (iv) the repayment of $200.0 million of borrowings under the senior credit facilities, (v) the amendment of certain terms of our Senior Notes and (vi) the prepayment of all of our 2007 Notes, which had an outstanding aggregate principal amount of $196.6 million and were scheduled to mature in 2012 and 2014. The refinancing transactions were designed to improve near term liquidity and financial flexibility by extending debt maturities. Debt maturities before and after the refinancing are summarized as follows:

	(Dollars in millions)
	2010		2011		2012		2013		2014		2015		2016		2017
Maturity schedule:
Prior to refinancing	$	41.1	$	145.0	$	756.6	$	—	$	136.5	$	—	$	90.1	$	—
After refinancing	$	36.2	$	145.0	$	45.2	$	36.4	$	414.9	$	—	$	90.1	$	400.0

Cash Flows

Operating activities from continuing operations provided net cash of approximately $146.8 million during the first nine months of 2010. Year over year cash flow from operating activities increased $76.1 million from the first nine months of 2009. The increase is due to lower tax payments in 2010 primarily related to the absence of the $97 million tax payment in 2009 related to the sale of the ATI businesses, a tax refund of $59.5 million in 2010 and lower payments for restructuring and integration programs. The increase was partly offset by a $24.6 million increase in our contributions to domestic defined benefit pension plans in 2010 over the comparable period in 2009 and a decrease of $39.7 million that resulted from the adoption of an amendment to Financial Accounting Standards Board Accounting Standards Codification topic 860, “Transfers and Servicing” (“ASC topic 860”) in the first quarter of 2010. Specifically, upon adoption of the amendment, the accounts receivable that we previously treated as sold and removed from the balance sheet under our securitization program are now required to be accounted for as secured borrowings and reflected as short-term debt on our balance sheet. The effect of the amendment is reflected in our condensed consolidated statements of cash flows under financing activities in the increase (decrease) in notes payable and current borrowings and under operating activities in the accounts receivable use of cash.

Investing activities from continuing operations provided net cash of $52.1 million during the first nine months of 2010, primarily reflecting $24.7 million in proceeds from the sale of SSI and $50.0 million from the sale of Heavy Lift, partly offset by capital expenditures of $23.8 million.

31

Financing activities from continuing operations used net cash of $136.7 million during the first nine months of 2010. During the third quarter of 2010, we refinanced a portion of our long-term debt. On August 9, 2010, we issued $400.0 million principal amount of Convertible Notes. We used approximately $88.0 million of the proceeds to purchase call options which was partially offset by the receipt of $59.4 million from the sale of warrants. We used $200.0 million of the proceeds to repay term loan borrowings under our senior credit facility. In connection with the refinancing transactions we incurred $21.4 million of transaction fees and expenses, including underwriters’ discounts and commissions. We used the remainder of the net proceeds, together with available cash, to prepay all of our outstanding 2007 Notes at an aggregate prepayment purchase price equal to the aggregate outstanding principal amount of $196.6 million and a $28.1 million prepayment make-whole amount on the 2007 Notes. In addition, we paid $40.7 million of dividends. These reductions in cash flows from financing activities were partly offset by the $34.7 million effect in notes payable and current borrowings of reflecting the securitization program as a secured borrowing in 2010.

Other Liquidity

In 2007, our Board of Directors authorized the repurchase of up to $300 million of our outstanding common stock. Repurchases of our stock under the Board authorization may be made from time to time in the open market and may include privately-negotiated transactions as market conditions warrant and subject to regulatory considerations. The stock repurchase program has no expiration date and our ability to execute on the program will depend on, among other factors, cash requirements for acquisitions, cash generation from operations, debt repayment obligations, market conditions and regulatory requirements. In addition, our senior loan agreements limit the aggregate amount of share repurchases and other restricted payments we may make to $75 million per year in the event our consolidated leverage ratio exceeds 3.5 to 1. Accordingly, these provisions may limit our ability to repurchase shares under this Board authorization. Through September 26, 2010, no shares have been purchased under this Board authorization.

The following table provides our net debt to total capital ratio:

	September 26,			December 31,
	2010			2009
	(Dollars in millions)
Net debt includes:
Current borrowings	$	181.2		$	4.0
Long-term borrowings		904.4			1,192.5
Total debt		1,085.6			1,196.5
Less: Cash and cash equivalents		247.8			188.3
Net debt	$	837.8		$	1,008.2
Total capital includes:
Net debt	$	837.8		$	1,008.2
Total common shareholders’ equity		1,713.2			1,580.2
Total capital	$	2,551.0		$	2,588.4
Percent of net debt to total capital		33	%		39	%

Our senior credit agreement and senior note agreements, which we refer to as the “senior loan agreements,” contain covenants that, among other things, limit or restrict our ability, and the ability of our subsidiaries, to incur debt, create liens, consolidate, merge or dispose of certain assets, make certain investments, engage in acquisitions, pay dividends on, repurchase or make distributions in respect of capital stock and enter into swap agreements. These agreements also require us to maintain a Consolidated Leverage Ratio (generally, Consolidated Total Indebtedness to Consolidated EBITDA, each as defined in the senior credit agreement) and a Consolidated Interest Coverage Ratio (generally, Consolidated EBITDA to Consolidated Interest Expense, each as defined in the senior credit agreement) at specified levels as of the last day of any period of four consecutive fiscal quarters ending on or nearest to the end of each calendar quarter, calculated pursuant to the definitions and methodology set forth in the senior credit agreement.

We believe that our cash flow from operations and our ability to access additional funds through credit facilities will enable us to fund our operating requirements and capital expenditures and meet debt obligations. As of September 26, 2010, we had no outstanding borrowings and approximately $4 million in outstanding standby letters of credit issued under our $400 million revolving credit facility. Depending on conditions in the capital markets and other factors, we will from time to time consider other financing transactions, the proceeds of which could be used to refinance current indebtedness or for other purposes.

32

Potential Tax Legislation

President Obama and the U.S. Treasury Department proposed, on May 5, 2009, changing certain tax rules for U.S. corporations doing business outside the United States. The proposed changes would limit the ability of U.S. corporations to deduct expenses attributable to foreign earnings, modify the foreign tax credit rules and further restrict the ability of U.S. corporations to transfer funds between foreign subsidiaries without triggering U.S. income tax. It is unclear whether these proposed tax reforms will be enacted or, if enacted, what the ultimate scope of the reforms will be. Depending on their content, such reforms, if enacted, could have an adverse effect on our future operating results.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

See the information set forth in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2009. In addition, in connection with the public offering of the Convertible Notes, the Company entered into certain convertible note hedge and warrant transactions, which could have a dilutive effect with respect to the common stock or, if the Company so elects, obligate the Company to make certain cash payments. For additional information regarding the terms of the convertible note hedge and warrant transactions, see Note 8 to the consolidated financial statements included in this report. For additional information regarding certain risks associated with the convertible note hedge and warrant transactions, see the risk factors included in Exhibit 99.1 to this report.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this report are functioning effectively to provide reasonable assurance that the information required to be disclosed by us in reports filed under the Securities Exchange Act of 1934 is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.

(b) Change in Internal Control over Financial Reporting

No change in our internal control over financial reporting occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

On October 11, 2007, the Company’s subsidiary, Arrow International, Inc. (“Arrow”), received a corporate warning letter from the U.S. Food and Drug Administration (FDA). The letter expressed concerns with Arrow’s quality systems, including complaint handling, corrective and preventive action, process and design validation, inspection and training procedures. It also advised that Arrow’s corporate-wide program to evaluate, correct and prevent quality system issues had been deficient.

The Company developed and implemented a comprehensive plan to correct the issues raised in the letter and further improve overall quality systems. From the end of 2009 to the beginning of 2010, the FDA reinspected the Arrow facilities covered by the corporate warning letter, and Arrow has responded to the observations issued by the FDA as a result of those inspections. Communications received from the FDA indicate that the FDA has classified its inspection observations as “voluntary action indicated,” or VAI. This classification signifies that the FDA has concluded that no further regulatory action is required, and that any observations made during the inspections can be addressed voluntarily by the Company. In addition, in the third quarter of 2010, Arrow submitted and received FDA approval of all currently eligible requests for certificates to foreign governments, or CFGs. The Company believes that the FDA’s approval of its CFG requests is a clear indication that Arrow has substantially corrected the quality system issues identified in the corporate warning letter. The Company is continuing to work with the FDA to resolve all remaining issues and obtain formal closure of the corporate warning letter.

While the Company continues to believe it has substantially remediated the issues raised in the corporate warning letter through the corrective actions taken to date, the corporate warning letter remains in place pending final resolution of all outstanding issues, which the Company is actively working with the FDA to resolve. If the Company’s remedial actions are not satisfactory to the FDA, the Company may have to devote additional financial and human resources to its efforts, and the FDA may take further regulatory actions against the Company.

In addition, we are a party to various lawsuits and claims arising in the normal course of business. These lawsuits and claims include actions involving product liability, intellectual property, employment and environmental matters. Based on information currently available, advice of counsel, established reserves and other resources, we do not believe that any such actions are likely to be, individually or in the aggregate, material to our business, financial condition, results of operations or liquidity. However, in the event of unexpected further developments, it is possible that the ultimate resolution of these matters, or other similar matters, if unfavorable, may be materially adverse to our business, financial condition, results of operations or liquidity.

Item 1A. Risk Factors

The Company updated and amended its risk factors in connection with the public offering of the Convertible Notes. The risk factors, as so revised, were included on pages S-11 to S-26, S-28, S-29 and S-32 to S-34 of the Prospectus Supplement, dated August 3, 2010 (to the Prospectus dated August 2, 2010) relating to the Convertible Notes. Those risk factors have been filed as Exhibit 99.1 to this report, and are incorporated hereby by reference.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Not applicable.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 5. Other Information

Not applicable.

34

Item 6. Exhibits

The following exhibits are filed as part of this report:

Exhibit No.			Description
	31.1	—	Certification of Chief Executive Officer pursuant to Rule 13a—14(a) under the Securities Exchange Act of 1934.
	31.2	—	Certification of Chief Financial Officer pursuant to Rule 13a—14(a) under the Securities Exchange Act of 1934.
	32.1	—	Certification of Chief Executive Officer pursuant to Rule 13a—14(b) under the Securities Exchange Act of 1934.
	32.2	—	Certification of Chief Financial Officer, pursuant to Rule 13a—14(b) under the Securities Exchange Act of 1934.
	99.1	—	Pages S-11 to S-26, S-28, S-29 and S-32 to S-34 of the Prospectus Supplement, dated August 3, 2010 (to the Prospectus dated August 2, 2010) relating to the public offering of the Company’s 3.875% Convertible Senior Subordinated Notes due 2017, which pages are incorporated by reference in Part II, Item 1A of this report.
	101.1	—	The following materials from the Company’s Quarterly Report on Form 10-Q for the quarter ended September 26, 2010, formatted in XBRL (eXtensible Business Reporting Language): (i) the Condensed Consolidated Statements of Income for the three and nine months ended September 26, 2010 and September 27, 2009; (ii) the Condensed Consolidated Balance Sheets as of September 26, 2010 and September 27, 2009; (iii) the Condensed Consolidated Statements of Cash Flows for the nine months ended September 26, 2010 and September 27, 2009; (iv) the Condensed Consolidated Statements of Changes in Equity for the nine months ended September 26, 2010 and September 27, 2009; and (v) Notes to Condensed Consolidated Financial Statements, tagged as blocks of text.

35

SIGNATURES

Pursuant to the requirements 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.

TELEFLEX INCORPORATED
By:	/s/ Jeffrey P. Black
	Jeffrey P. Black
	Chairman and Chief Executive Officer (Principal Executive Officer)
By:	/s/ Richard A. Meier
	Richard A. Meier
	Executive Vice President and Chief Financial Officer (Principal Financial Officer)
By:	/s/ Charles E. Williams
	Charles E. Williams
	Corporate Controller and Chief Accounting Officer (Principal Accounting Officer)

Dated: October 27, 2010

36

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Jeffrey P. Black, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teleflex Incorporated;

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 13a-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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 reasonably 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: October 27, 2010	/s/ Jeffrey P. Black
	Jeffrey P. Black
	Chairman, Chief Executive Officer and President

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Richard A. Meier, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Teleflex Incorporated;

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 13a-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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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 reasonably 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: October 27, 2010	/s/ Richard A. Meier
	Richard A. Meier
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO
RULE 13a-14(b) UNDER THE
SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of Teleflex Incorporated (the “Company”) on Form 10-Q for the period ending September 26, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jeffrey P. Black, Chairman, Chief Executive Officer and President of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.

Date: October 27, 2010	/s/ Jeffrey P. Black
	Jeffrey P. Black
	Chairman, Chief Executive Officer and President

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO
RULE 13a-14(b) UNDER THE
SECURITIES EXCHANGE ACT OF 1934

In connection with the Quarterly Report of Teleflex Incorporated (the “Company”) on Form 10-Q for the period ending September 26, 2010, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Richard A. Meier, Executive Vice President and Chief Financial Officer, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial position and results of operations of the Company.

Date: October 27, 2010	/s/ Richard A. Meier
	Richard A. Meier
	Executive Vice President and Chief Financial Officer

EX-99.1

Exhibit 99.1

The following risk factors were included on pages S-11 to S-26, S-28, S-29 and S-32 to S-34 of the Company’s Prospectus Supplement, dated August 3, 2010 (to the Prospectus dated August 2, 2010) and are incorporated by reference into Part II, Item 1A of the quarterly report on Form 10-Q to which this Exhibit 99.1 is filed as an exhibit.

RISK FACTORS

An investment in our securities may involve various risks. Prior to making a decision about investing in our securities, and in consultation with your own financial and legal advisors, you should carefully consider, among other matters, the risks described below as well as other information and data included in, or incorporated by reference into, this prospectus supplement and accompanying prospectus. If any of the events described in the risk factors below occur, our business, financial condition, operating results and prospects could be materially adversely affected, which in turn could adversely affect our ability to repay the notes or the trading price of the notes and our common stock.

Risks Related to Our Business

Our Medical Segment is subject to extensive government regulation, which may require us to incur significant expenses to ensure compliance. Our failure to comply with those regulations could have a material adverse effect on our results of operations and financial condition.

The products within our Medical Segment are classified as medical devices and are subject to extensive regulation in the United States by the FDA and by comparable government agencies in other countries. The regulations govern the development, design, approval, manufacturing, labeling, importing and exporting and sale and marketing of many of our medical products. These regulations are also subject to future change. Failure to comply with applicable regulations and quality assurance guidelines could lead to manufacturing shutdowns, product shortages, delays in product manufacturing, product seizures, recalls, operating restrictions, withdrawal or suspension of required licenses, and prohibitions against exporting of products to, or importing products from, countries outside the United States. We could be required to expend significant financial and human resources to remediate failures to comply with applicable regulations and quality assurance guidelines. See, for example, “— If we are unable to resolve issues raised in our FDA corporate warning letter, it could have a material adverse effect on our business, financial condition and results of operations, our relationship with the FDA and the perception of our products by hospitals, clinics and physicians”. In addition, civil and criminal penalties, including exclusion under Medicaid or Medicare, could result from regulatory violations. Any one or more of these events could have a material adverse effect on our business, financial condition and results of operations.

In the United States, before we can market a new medical device, or a new use of, or claim for, or significant modification to, an existing product, we must first receive either 510(k) clearance or approval of a premarket approval, or PMA, application from the FDA, unless an exemption applies. In the 510(k) clearance process, the FDA must determine that our proposed product is “substantially equivalent” to a device legally on the market, known as a “predicate” device, with respect to intended use, technology and safety and effectiveness, in order to clear the proposed device for marketing. The PMA pathway requires us to demonstrate the safety and effectiveness of the device based, in part, on data obtained in human clinical trials. Similarly, most major markets for medical devices outside the United States also require clearance, approval or compliance with certain standards before a product can be commercially marketed. The process of obtaining regulatory clearances and approvals to market a medical device, particularly from the FDA and certain foreign governmental authorities, can be costly and time consuming, and clearances and approvals might not be granted for new products on a timely basis, if at all. In addition, once a device has been cleared or approved, a new clearance or approval may be required before the device may be modified or its labelling changed. Furthermore, the FDA is currently reviewing its 510(k) clearance process, and may make the process more rigorous, which could require us to generate additional clinical or other data, and expend more time and effort, in obtaining future 510(k) product clearance. The regulatory clearance and approval process may result in, among other things, delayed realization of product revenues, in substantial additional costs or in limitations on indicated uses of products, any one of which could have a material adverse effect on our financial condition and results of operations.

Even after a product has received marketing approval or clearance, such product approval or clearance by the FDA can be withdrawn or limited due to unforeseen problems with the device or integrity issues relating to the marketing application. Later discovery of violations of FDA requirements for medical devices could result in FDA enforcement actions, including warning letters, fines, delays or suspensions of regulatory clearances, product seizures or recalls, injunctions, advisories or other field actions, and/or operating restrictions. Medical devices are cleared or approved for one or more specific intended uses. Promoting a device for an off-label use could result in FDA enforcement action.

Furthermore, our Medical Segment facilities are subject to periodic inspection by the FDA and other federal, state and foreign governmental authorities, which require manufacturers of medical devices to adhere to certain regulations, including the Quality System Regulation which requires testing, complaint handling, periodic audits, design controls, quality control testing and documentation procedures. FDA may also inspect for compliance with Medical Device Reporting Regulation, which requires manufacturers to submit reports to FDA of certain adverse events or malfunctions, and whether the facilities have submitted notifications of product recalls or other corrective actions in accordance with FDA regulations. Issues identified during such periodic inspections may result in warning letters, manufacturing shutdowns, product shortages, product seizures or recalls, fines and delays in product manufacturing, and may require significant resources to resolve.

Customers in our Medical Segment depend on third party coverage and reimbursement and the failure of healthcare programs to provide coverage and reimbursement, or the reduction in levels of reimbursement, for our medical products could adversely affect our Medical Segment.

The ability of our customers to obtain coverage and reimbursements for our medical products is important to our Medical Segment. Demand for many of our existing and new medical products is, and will continue to be, affected by the extent to which government healthcare programs and private health insurers reimburse our customers for patients’ medical expenses in the countries where we do business. Even when we develop or acquire a promising new product, we may find limited demand for the product unless reimbursement approval is obtained from private and governmental third party payors. Internationally, healthcare reimbursement systems vary significantly, with medical centers in some countries having fixed budgets, regardless of the level of patient treatment. Other countries require application for, and approval of, government or third party reimbursement. Without both favorable coverage determinations by, and the financial support of, government and third party insurers, the market for many of our medical products could be adversely affected.

We cannot be sure that third party payors will maintain the current level of coverage and reimbursement to our customers for use of our existing products. Adverse coverage determinations or any reduction in the amount of reimbursement could harm our business by altering the extent to which potential customers select our products and the prices they are willing to pay or otherwise. In addition, as a result of their purchasing power and continually rising healthcare costs, third party payors are implementing cost cutting measures such as discounts, price reductions, limitations on coverage and reimbursement for new medical technologies and procedures, or other incentives from medical products suppliers. These trends could lead to pressure to reduce prices for our existing products and potential new products and could cause a decrease in the size of the market or a potential increase in competition that could negatively affect our business, financial condition and results of operations.

We may incur material losses and costs as a result of product liability and warranty claims that may be brought against us and recalls, which may adversely affect our results of operations and financial condition. Furthermore, as a medical device company, we face an inherent risk of damage to our reputation if one or more of our products are, or are alleged to be, defective.

Our businesses expose us to potential product liability risks that are inherent in the design, manufacture and marketing of our products. In particular, our medical device products are often used in surgical and intensive care settings with seriously ill patients. Many of these products are designed to be implanted in the human body for varying periods of time, and component failures, manufacturing flaws, design defects or inadequate disclosure of product-related risks with respect to these or other products we manufacture or sell could result in an unsafe condition or injury to, or death of, the patient. As a result, we face an inherent risk of damage to our reputation if one or more of our products are, or are alleged to be, defective. In addition, our products for the aerospace and commercial industries are used in potentially hazardous environments. Although we carry product liability insurance, we may be exposed to product liability and warranty claims in the event that our products actually or allegedly fail to perform as expected or the use of our products results, or is alleged to result, in bodily injury and/or property damage. The outcome of litigation, particularly any class-action lawsuits, is difficult to quantify. Plaintiffs often seek recovery of very large or indeterminate amounts, including punitive damages. The magnitude of the potential losses relating to these lawsuits may remain unknown for substantial periods of time and the cost to defend against any such litigation may be significant. Accordingly, we could experience material warranty or product liability losses in the future and incur significant costs to defend these claims.

In addition, if any of our products are, or are alleged to be, defective, we may voluntarily participate, or be required by applicable regulators, to participate in a recall of that product if the defect or the alleged defect relates to safety. In the event of a recall, we may experience lost sales and be exposed to individual or class-action litigation claims and reputational risk. Product liability, warranty and recall costs may have a material adverse effect on our business, financial condition and results of operations.

We are subject to healthcare fraud and abuse laws, regulation and enforcement; our failure to comply with those laws could have a material adverse effect on our results of operations and financial conditions.

We are also subject to healthcare fraud and abuse regulation and enforcement by the federal government and the states and foreign governments in which we conduct our business. The laws that may affect our ability to operate include:

• the federal healthcare programs’ Anti-Kickback Law, which prohibits, among other things, persons from knowingly and willfully soliciting, receiving, offering or paying remuneration, directly or indirectly, in exchange for or to induce either the referral of an individual for, or the purchase, order or recommendation of, any good or service for which payment may be made under federal healthcare programs such as the Medicare and Medicaid programs;

• federal false claims laws which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid, or other third-party payors that are false or fraudulent;

• the federal Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters; and

• state law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers.

If our operations are found to be in violation of any of the laws described above or any other governmental regulations that apply to us, we may be subject to penalties, including civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, the exclusion from participation in federal and state healthcare programs and imprisonment, any of which could adversely affect our ability to operate our business and our financial results. The risk of our being found in violation of these laws is increased by the fact that many of them have not been fully interpreted by the regulatory authorities or the courts, and their provisions are open to a variety of interpretations.

Further, the recently enacted the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the “Healthcare Reform Act”), among other things, amends the intent requirement of the federal anti-kickback and criminal health care fraud statutes. A person or entity no longer needs to have actual knowledge of this statute or specific intent to violate it. In addition, the Healthcare Reform Act provides that the government may assert that a claim including items or services resulting from a violation of the federal anti-kickback statute constitutes a false or fraudulent claim for purposes of the false claims statutes. Any action against us for violation of these laws, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.

The Healthcare Reform Act also imposes new reporting and disclosure requirements on device manufacturers for any “transfer of value” made or distributed to prescribers and other healthcare providers, effective March 30, 2013. Such information will be made publicly available in a searchable format beginning September 30, 2013. In addition, device manufacturers will also be required to report and disclose any investment interests held by physicians and their immediate family members during the preceding calendar year. Failure to submit required information may result in civil monetary penalties of up to an aggregate of $150,000 per year (and up to an aggregate of $1 million per year for “knowing failures”), for all payments, transfers of value or ownership or investment interests not reported in an annual submission.

In addition, there has been a recent trend of increased federal and state regulation of payments made to physicians for marketing. Some states, such as California, Massachusetts and Vermont, mandate implementation of commercial compliance programs, along with the tracking and reporting of gifts, compensation, and other remuneration to physicians. The shifting commercial compliance environment and the need to build and maintain robust and expandable systems to comply with multiple jurisdictions with different compliance and/or reporting requirements increases the possibility that a healthcare company may run afoul of one or more of the requirements.

If we are unable to resolve issues raised in our FDA corporate warning letter, it could have a material adverse effect on our business, financial condition and results of operations, our relationship with the FDA and the perception of our products by hospitals, clinics and physicians.

On October 11, 2007, our subsidiary Arrow received a corporate warning letter from the FDA. The letter expressed concerns with Arrow’s quality systems, including complaint handling, corrective and preventive action, process and design validation, inspection and training procedures. It also advised that Arrow’s corporate-wide program to evaluate, correct and prevent quality system issues had been deficient.

Our efforts to address the issues raised in the corporate warning letter have required the dedication of significant internal and external resources. We developed a comprehensive plan to correct these previously-identified regulatory issues and further improve overall quality systems and have substantially implemented the measures outlined in the plan. From the end of 2009 to the beginning of 2010, the FDA reinspected the Arrow facilities covered by the corporate warning letter and notified us of observations from those inspections. We have responded to the observations issued by the FDA.

In the third quarter of 2010, we began submitting requests for certificates to foreign governments, or CFGs, to the FDA for review, and recently received approvals of 41 of our 85 submitted requests. We believe that the FDA’s approval of these CFG requests is an indication that we have substantially corrected the quality system issues identified in the corporate warning letter. We have now submitted all of our currently eligible CFG requests to the FDA for review and anticipate receiving the FDA’s approval with respect to most of these requests in the third quarter of 2010. We will, however, continue to be unable to sell those products in those countries for which we do not currently have valid CFGs until we receive approvals with respect to those CFGs, and we cannot assure you we will receive approval of these CFG requests in the anticipated period of time, if at all.

While we continue to believe we have substantially remediated the issues raised in the corporate warning letter through the corrective actions taken to date, we have not received agreement with the FDA on final resolution of all outstanding issues. If our remedial actions are not satisfactory to the FDA, we may have to devote additional financial and human resources to our efforts, and the FDA may take further regulatory actions against us. These actions may include seizing our product inventory, assessing civil monetary penalties or seeking an injunction against us, which could in turn have a material adverse effect on our business, financial condition and results of operations.

Health care reform, including the recently enacted legislation, may have a material adverse effect on our industry and our results of operations.

Political, economic and regulatory influences are subjecting the health care industry to fundamental changes. In March 2010, the Healthcare Reform Act was enacted. It substantially changes the way health care is financed by both governmental and private insurers, encourages improvements in the quality of health care items and services, and significantly impacts the U.S. pharmaceutical and medical device industries. Among other things, the Healthcare Reform Act:

• establishes a 2.3% deductible excise tax on any entity that manufactures or imports certain medical devices offered for sale in the United States, beginning 2013;

• establishes a new Patient-Centered Outcomes Research Institute to oversee, identify priorities in and conduct comparative clinical effectiveness research;

• implements payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain health care services through bundled payment models, beginning on or before January 1, 2013; and

• creates an independent payment advisory board that will submit recommendations to reduce Medicare spending if projected Medicare spending exceeds a specified growth rate.

We currently estimate the impact of the 2.3% deductible excise tax to be approximately $16.0 million annually, beginning 2013. However, we cannot predict at this time the full impact of the Healthcare Reform Act and/or other healthcare reform measures that may be adopted in the future on our financial condition, results of operations and cash flow.

An interruption in our manufacturing operations and/or our supply of raw materials may adversely affect our business.

Many of our key products across all three of our business segments are manufactured at single locations, with limited alternate facilities. If an event occurs that results in damage to one or more of our facilities, it may not be possible to timely manufacture the relevant products at previous levels or at all. In addition, in the event of delays or cancellations in shipments of raw materials by our suppliers, it may not be possible to timely manufacture the affected products at previous levels or at all. Furthermore, with respect to our Medical Segment, in the event of a disruption in our supply of certain components or materials, due to the stringent regulations and requirements of the FDA and other regulatory authorities regarding the manufacture of our products, we may not be able to quickly establish additional or replacement sources for such components or materials. A reduction or interruption in manufacturing, or an inability to secure alternative sources of raw materials or components that are acceptable to us, could have an adverse effect on our business, results of operations and financial condition.

We depend upon relationships with physicians and other health care professionals.

The research and development of some of our medical products is dependent on our maintaining strong working relationships with physicians and other health care professionals. We rely on these professionals to provide us with considerable knowledge and experience regarding our medical products and the development of our medical products. Physicians assist us as researchers, product consultants, inventors and as public speakers. If we fail to maintain our working relationships with physicians and receive the benefits of their knowledge, advice and input, our medical products may not be developed and marketed in line with the needs and expectations of the professionals who use and support our products, which could have a material adverse effect on our business, financial condition and results of operations.

We face strong competition. Our failure to successfully develop and market new products could adversely affect our results.

The medical device industry across all of our different product lines, as well as in each geographic market in which our products are sold, is highly competitive. We compete with many medical device companies ranging from small start-up enterprises which might only sell a single or limited number of competitive products or which may participate only in a specific market segment, to companies that are larger and more established than us with access to significant financial and marketing resources.

In addition, the medical device industry is characterized by extensive product research and development and rapid technological advances. Also, while our products for the aerospace and commercial industries generally have longer life cycles, many of those products require changes in design or other enhancements to meet the evolving needs of our customers. The future success of our business will depend, in part, on our ability to design and manufacture new competitive products and to enhance existing products. Our product development efforts may require substantial investment by us. There can be no assurance that unforeseen problems will not occur with respect to the development, performance or market acceptance of new technologies or products, such as the inability to:

• identify viable new products;

• obtain adequate intellectual property protection;

• gain market acceptance of new products; or

• successfully obtain regulatory approvals.

Moreover, we may not otherwise be able to successfully develop and market new products or enhance existing products. In addition, our competitors may currently be developing, or may develop and market in the future, technologies that are more effective than those that we develop or which may render our products obsolete. Our failure to successfully develop and market new products or enhance existing products could reduce our revenues and margins, which would have an adverse effect on our business, financial condition and results of operations.

We are subject to risks associated with our non-U.S. operations.

We have significant manufacturing and distribution facilities, research and development facilities, sales personnel and customer support operations outside the United States in countries such as Canada, Belgium, the Czech Republic, France, Germany, Ireland, Malaysia, Mexico, Norway and Singapore. As of December 31, 2009, approximately 41% of our net property, plant and equipment was located outside the United States. In addition, approximately 48% of our net revenues (based on business unit location) were derived from operations outside the United States. Approximately 69% of our full-time and temporary employees as of December 31, 2009 were employed in countries outside of the United States.

Our international operations are subject to varying degrees of risk inherent in doing business outside the United States, including:

• exchange controls, currency restrictions and fluctuations in currency values;

• trade protection measures;

• potentially costly and burdensome import or export requirements;

• laws and business practices that favor local companies;

• changes in non-U.S. medical reimbursement policies and procedures;

• subsidies or increased access to capital for firms who are currently or may emerge as competitors in countries in which we have operations;

• scrutiny of foreign tax authorities which could result in significant fines, penalties and additional taxes being imposed on us;

• potentially negative consequences from changes in tax laws;

• restrictions and taxes related to the repatriation of foreign earnings;

• differing labor regulations;

• additional U.S. and foreign government controls or regulations;

• difficulties in the protection of intellectual property; and

• unsettled political and economic conditions and possible terrorist attacks against American interests.

In addition, the U.S. Foreign Corrupt Practices Act (the “FCPA”) and similar worldwide anti-bribery laws in non-U.S. jurisdictions generally prohibit companies and their intermediaries from making improper payments to non-U.S. officials for the purpose of obtaining or retaining business. The FCPA also imposes accounting standards and requirements on publicly traded U.S. corporations and their foreign affiliates, which are intended to prevent the diversion of corporate funds to the payment of bribes and other improper payments, and to prevent the establishment of “off books” slush funds from which such improper payments can be made. Because of the predominance of government-sponsored health care systems around the world, many of our customer relationships outside of the United States are with governmental entities and are therefore subject to such anti-bribery laws. Our policies mandate compliance with these anti-bribery laws. Despite our training and compliance programs, our internal control policies and procedures may not always protect us from reckless or criminal acts committed by our employees or agents. Violations of these laws, or allegations of such violations, could disrupt our operations, involve significant management distraction and result in a material adverse effect on our business, financial condition and results of operations. We also could suffer severe penalties, including criminal and civil penalties, disgorgement and other remedial measures, including further changes or enhancements to our procedures, policies and controls, as well as potential personnel changes and disciplinary actions.

Furthermore, we are subject to the export controls and economic embargo rules and regulations of the United States, including, but not limited to, the Export Administration Regulations and trade sanctions against embargoed countries, which are administered by the Office of Foreign Assets Control within the Department of the Treasury as well as the laws and regulations administered by the Department of Commerce. These regulations limit our ability to market, sell, distribute or otherwise transfer our products or technology to prohibited countries or persons. While we train our employees and contractually obligate our distributors to comply with these regulations, we cannot assure you that there will not be a violation, whether knowingly or inadvertently. Failure to comply with these rules and regulations may result in substantial penalties, including fines and enforcement actions and civil and/or criminal sanctions, the disgorgement of profits and the imposition of a court-appointed monitor, as well as the denial of export privileges, and debarment from participation in U.S. government contracts, and may have an adverse effect on our reputation.

These and other factors may have a material adverse effect on our international operations or on our business, results of operations and financial condition generally.

Further adverse developments in general domestic and global economic conditions combined with a continuation of volatile global credit markets could adversely impact our operating results, financial condition and liquidity.

We are subject to risks arising from adverse changes in general domestic and global economic conditions, including recession or economic slowdown and disruption of credit markets. The credit and capital markets experienced extreme volatility and disruption over the past year, leading to recessionary conditions and depressed levels of consumer and commercial spending. These recessionary conditions have caused customers to reduce, modify, delay or cancel plans to purchase our products and services. While recent indicators suggest modest improvement in the United States and global economy, we cannot predict the timing or extent of any economic recovery or the extent to which our customers will return to more normalized spending behaviors. If the recessionary conditions continue or worsen, our customers may terminate existing purchase orders or reduce the volume of products or services they purchase from us in the future.

Adverse economic and financial market conditions may also cause our suppliers to be unable to meet their commitments to us or may cause suppliers to make changes in the credit terms they extend to us, such as shortening the required payment period for outstanding accounts receivable or reducing the maximum amount of trade credit available to us. These types of actions by our suppliers could significantly affect our liquidity and could have a material adverse effect on our results of operations and financial condition. If we are unable to successfully anticipate changing economic and financial market conditions, we may be unable to effectively plan for and respond to those changes, and our business could be negatively affected.

In addition, the amount of goodwill and other intangible assets on our consolidated balance sheet have increased significantly in recent years, primarily as a result of the acquisition of Arrow International in 2007. Adverse economic and financial market conditions may result in future charges to recognize impairment in the carrying value of our goodwill and other intangible assets, which could have a material adverse effect on our financial results.

Foreign currency exchange rate, commodity price and interest rate fluctuations may adversely affect our results.

We are exposed to a variety of market risks, including the effects of changes in foreign currency exchange rates, commodity prices and interest rates. We expect revenue from products manufactured in, and sold into, non-U.S. markets to continue to represent a significant portion of our net revenue. Our consolidated financial statements reflect translation of financial statements denominated in non-U.S. currencies to U.S. dollars, our reporting currency. When the U.S. dollar strengthens or weakens in relation to the foreign currencies of the countries where we sell or manufacture our products, such as the euro, our U.S. dollar-reported revenue and income will fluctuate. Although we have entered into forward contracts with several major financial institutions to hedge a portion of projected cash flows denominated in non-functional currency in order to reduce the effects of currency rate fluctuations, changes in the relative values of currencies may, in some instances, have a significant effect on our results of operations.

Many of our products have significant plastic resin content. We also use quantities of other commodities, such as aluminum. Increases in the prices of these commodities could increase the costs of our products and services. We may not be able to pass on these costs to our customers, particularly with respect to those products we sell pursuant to group purchase agreements, and this could have a material adverse effect on our results of operations and cash flows.

Increases in interest rates may adversely affect the financial health of our customers and suppliers and thus adversely affect their ability to buy our products and supply the components or raw materials we need, which could have a material adverse effect on our results of operations and cash flows.

Our strategic initiatives may not produce the intended growth in revenue and operating income.

Our strategies include making significant investments to achieve revenue growth and margin improvement targets. If we do not achieve the expected benefits from these investments or otherwise fail to execute on our strategic initiatives, we may not achieve the growth improvement we are targeting and our results of operations may be adversely affected.

In addition, as part of our strategy for growth, we have made, and may continue to make, acquisitions and divestitures and enter into strategic alliances such as joint ventures and joint development agreements. However, we may not be able to identify suitable acquisition candidates, complete acquisitions or integrate acquisitions successfully, and our strategic alliances may not prove to be successful. In this regard, acquisitions involve numerous risks, including difficulties in the integration of the operations, technologies, services and products of the acquired companies and the diversion of management’s attention from other business concerns. Although our management will endeavor to evaluate the risks inherent in any particular transaction, there can be no assurance that we will properly ascertain all such risks. In addition, prior acquisitions have resulted, and future acquisitions could result, in the incurrence of substantial additional indebtedness and other expenses. Future acquisitions may also result in potentially dilutive issuances of equity securities. There can be no assurance that difficulties encountered with acquisitions will not have a material adverse effect on our business, financial condition and results of operations.

We may not be successful in achieving expected operating efficiencies and sustaining or improving operating expense reductions, and may experience business disruptions associated with announced restructuring, realignment and cost reduction activities.

Over the past few years we have announced several restructuring, realignment and cost reduction initiatives, including significant realignments of our businesses, employee terminations and product rationalizations. While we have started to realize the efficiencies of these actions, these activities may not produce the full efficiency and cost reduction benefits we expect. Further, such benefits may be realized later than expected, and the ongoing costs of implementing these measures may be greater than anticipated. If these measures are not successful or sustainable, we may undertake additional realignment and cost reduction efforts, which could result in future charges. Moreover, our ability to achieve our other strategic goals and business plans may be adversely affected and we could experience business disruptions with customers and elsewhere if our restructuring and realignment efforts prove ineffective.

Fluctuations in our effective tax rate and changes to tax laws may adversely affect our results.

As a company with significant operations outside of the United States, we are subject to taxation in numerous countries, states and other jurisdictions. As a result, our effective tax rate is derived from a combination of applicable tax rates in the various countries, states and other jurisdictions in which we operate. In preparing our financial statements, we estimate the amount of tax that will become payable in each of the countries, states and other jurisdictions in which we operate. Our effective tax rate may, however, be lower or higher than experienced in the past due to numerous factors, including a change in the mix of our profitability from country to country, changes in accounting for income taxes and changes in tax laws. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations, which could have an adverse effect on our business and results of operations.

In addition, unfavorable results of tax audits and changes in tax laws in jurisdictions in which we operate, among other things, could adversely affect our results of operations and cash flows.

Our technology is important to our success, and our failure to protect our intellectual property rights could put us at a competitive disadvantage.

We rely on the patent, trademark, copyright and trade secret laws of the United States and other countries to protect our proprietary rights. Although we own numerous U.S. and foreign patents and have applied for numerous patent applications, we cannot assure you that any pending patent applications will issue, or that any patents, issued or pending, will provide us with any competitive advantage or will not be challenged, invalidated or circumvented by third parties. In addition, we rely on confidentiality and non-disclosure agreements with employees and take other measures to protect our know-how and trade secrets. The steps we have taken may not prevent unauthorized use of our technology by unauthorized parties or competitors who may copy or otherwise obtain and use these products or technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States. There is no guarantee that current and former employees, contractors and other parties will not breach their confidentiality agreements with us, misappropriate proprietary information or copy or otherwise obtain and use our information and proprietary technology without authorization or otherwise infringe on our intellectual property rights. Moreover, there can be no assurance that others will not independently develop the know-how and trade secrets or develop better technology than our own, which could reduce or eliminate any competitive advantage we have developed. Our inability to protect our proprietary technology could result in competitive harm that could adversely affect our business.

Our products or processes may infringe the intellectual property rights of others, which may cause us to pay unexpected litigation costs or damages or prevent us from selling our products.

We cannot be certain that our products do not and will not infringe issued patents or other intellectual property rights of third parties. We may be subject to legal proceedings and claims in the ordinary course of our business, including claims of alleged infringement of the intellectual property rights of third parties. Any such claims, whether or not meritorious, could result in litigation and divert the efforts of our personnel. If we are found liable for infringement, we may be required to enter into licensing agreements (which may not be available on acceptable terms or at all) or to pay damages and to cease making or selling certain products. We may need to redesign some of our products or processes to avoid future infringement liability. Any of the foregoing could be detrimental to our business.

Other pending and future litigation may lead us to incur significant costs and have an adverse effect on our business.

We also are party to various lawsuits and claims arising in the normal course of business involving contracts, intellectual property, import and export regulations, employment and environmental matters. The defense of these lawsuits may divert our management’s attention, and we may incur significant expenses in defending these lawsuits. In addition, we may be required to pay damage awards or settlements, or become subject to injunctions or other equitable remedies, that could have a material adverse effect on our financial condition and results of operations. While we do not believe that any litigation in which we are currently engaged would have such an adverse effect, the outcome of litigation, including regulatory matters, is often difficult to predict, and we cannot assure that the outcome of pending or future litigation will not have a material adverse effect on our business, financial condition or results of operations.

Our operations expose us to the risk of material environmental liabilities, litigation and violations.

We are subject to numerous foreign, federal, state and local environmental protection and health and safety laws governing, among other things:

• the generation, storage, use and transportation of hazardous materials;

• emissions or discharges of substances into the environment; and

• the health and safety of our employees.

These laws and government regulations are complex, change frequently and have tended to become more stringent over time. We cannot provide assurance that our costs of complying with current or future environmental protection and health and safety laws, or our liabilities arising from past or future releases of, or exposures to, hazardous substances will not exceed our estimates or will not adversely affect our financial condition and results of operations. Moreover, we may become subject to additional environmental claims, which may include claims for personal injury or cleanup, based on our past, present or future business activities, which could also adversely affect our financial condition and results of operations.

Our Aerospace Segment is subject to government regulation, which may require us to incur expenses to ensure compliance. Our failure to comply with those regulations could have adverse effect on our results of operations.

The U.S. Federal Aviation Administration (the “FAA”) regulates the manufacture and sale of some of our aerospace products and licenses for the operation of our repair stations. Comparable agencies, such as the European Aviation Safety Agency in Europe (the “EASA”), regulate these matters in other countries. If we fail to qualify for or obtain a required license for one of our products or services or lose a qualification or license previously granted, the sale of the subject product or service would be prohibited by law until such license is obtained or renewed and our business, financial condition and results of operations could be materially adversely affected. In addition, designing new products to meet existing regulatory requirements and retrofitting installed products to comply with new regulatory requirements can be expensive and time consuming.

From time to time, the FAA, the EASA or comparable agencies propose new regulations or changes to existing regulations. These changes or new regulations generally increase the costs of compliance. To the extent the FAA, the EASA or comparable agencies implement regulatory changes, we may incur significant additional costs to achieve compliance.

If we fail to establish and maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, which would adversely affect our consolidated results, and our ability to operate our business and our stock price.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States.

Any failure on our part to remedy any identified control deficiencies, or any delays or errors in our financial reporting, would have a material adverse effect on our business, results of operations, or financial condition.

Our workforce covered by collective bargaining and similar agreements could cause interruptions in our provision of products and services.

Approximately 13% of our net revenues are generated by operations for which a significant part of our workforce is covered by collective bargaining agreements and similar agreements in foreign jurisdictions. It is likely that a portion of our workforce will remain covered by collective bargaining and similar agreements for the foreseeable future. Strikes or work stoppages could occur that would adversely impact our relationships with our customers and our ability to conduct our business.

Risks Related to Our Indebtedness and This Offering

Our substantial indebtedness could adversely affect our business, financial condition or results of operations and prevent us from fulfilling our obligations under the notes.

We have and, after this offering, will continue to have a significant amount of indebtedness. As of June 27, 2010, we had total consolidated indebtedness of $1,169.7 million on an actual basis and would have had $1,133.1 million (which amount, with respect to the notes, reflects the face amount of the notes) on an as adjusted basis after giving effect to the Refinancing Transactions.

Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness, including the notes. It could also have significant effects on our business. For example, it could:

• make it more difficult for us to satisfy our obligations with respect to the notes;

• increase our vulnerability to general adverse economic and industry conditions;

• require us to dedicate a substantial portion of our cash flow from operations to payments on our indebtedness, thereby reducing the availability of our cash flow to fund working capital, capital expenditures, research and development efforts and other general corporate purposes;

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

• restrict us from exploiting business opportunities;

• place us at a competitive disadvantage compared to our competitors that have less indebtedness; and

• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy or other general corporate purposes.

Despite current substantial indebtedness levels, we and our subsidiaries may still be able to incur substantially more indebtedness. This could further exacerbate the risks associated with our substantial leverage.

We and our subsidiaries may be able to incur substantial additional indebtedness in the future, including secured indebtedness. For example, as of June 27, 2010, on an as adjusted basis after giving effect to the Refinancing Transactions, after taking into account the limitations under the covenants under the Credit Facilities and the Existing Senior Notes, we would have had approximately $345.4 million borrowing capacity, consisting of $311.0 million of aggregate borrowing capacity under our revolving credit facility and $34.4 million of borrowing capacity under our accounts receivable securitization facility. Except for the limitation on our ability to incur any indebtedness that is subordinated in right of payment to any senior indebtedness and senior in right of payment to the notes, the indenture does not limit the amount of indebtedness which may be issued by us or our subsidiaries under the indenture or otherwise. Adding new indebtedness to current debt levels could make it more difficult for us to satisfy our obligations with respect to the notes.

Our indebtedness may restrict our current and future operations, which could adversely affect our ability to respond to changes in our business and to manage our operations.

The Credit Facilities and Existing Senior Notes contain financial and other restrictive covenants that limit our ability to engage in activities that may be in our long-term best interests such as incur debt, create liens, consolidate, merge or dispose of certain assets, make certain investments and engage in certain acquisitions. Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our debts.

We may not be able to generate sufficient cash to service all of our indebtedness, including the notes. Our ability to generate cash depends on many factors beyond our control. We may be forced to take other actions to satisfy our obligations under our indebtedness, which may not be successful.

Our ability to make payments on, and to refinance, our indebtedness, including the notes, and to fund planned capital expenditures, research and development efforts, working capital, acquisitions and other general corporate purposes depends on our ability to generate cash in the future. This, to a certain extent, is subject to general economic, financial, competitive, legislative, regulatory and other factors, some of which are beyond our control. If we do not generate sufficient cash flow from operations or if future borrowings are not available to us in an amount sufficient to pay our indebtedness, including the notes, or to fund our liquidity needs, we may be forced to:

• refinance all or a portion of our indebtedness, including the notes, on or before the maturity thereof;

• sell assets;

• reduce or delay capital expenditures; or

• seek to raise additional capital.

In addition, we may not be able to affect any of these actions on commercially reasonable terms or at all. Our ability to refinance this indebtedness will depend on our financial condition at the time, the restrictions in the instruments governing our indebtedness and other factors, including market conditions. Our inability to generate sufficient cash flow to satisfy our debt service obligations, or to refinance or restructure our obligations on commercially reasonable terms or at all, would have an adverse effect, which could be material, on our business, financial condition and results of operations, as well as our ability to satisfy our obligations in respect of the notes.

We are a holding company. Substantially all of our business is conducted through our subsidiaries. Our ability to repay our debt, including the notes, depends on the performance of our subsidiaries and their ability to make distributions to us. Claims of noteholders will be structurally subordinated to claims of creditors of our subsidiaries because our subsidiaries will not guarantee the notes.

We are a holding company. Substantially all of our business is conducted through our subsidiaries, which are separate and distinct legal entities. Therefore, our ability to service our indebtedness, including the notes, is dependent on the earnings and the distribution of funds (whether by dividend, distribution or loan) from our subsidiaries. None of our subsidiaries is obligated to make funds available to us for payment on the notes. We cannot assure you that the agreements governing the existing and future indebtedness of our subsidiaries will permit our subsidiaries to provide us with sufficient dividends, distributions or loans to fund payments on the notes when due. In addition, any payment of dividends, distributions or loans to us by our subsidiaries could be subject to restrictions on dividends or repatriation of earnings under applicable local law and monetary transfer restrictions in the jurisdictions in which our subsidiaries operate. Furthermore, payments to us by our subsidiaries will be contingent upon our subsidiaries’ earnings.

We may not pay dividends on our common stock in the future.

Holders of our common stock are only entitled to receive dividends as our board of directors may declare out of funds legally available for such payments. The declaration and payment of future dividends to holders of our common stock will be at the discretion of our board of directors and will depend upon many factors, including our financial condition, earnings, compliance with debt instruments, legal requirements and other factors as our board of directors deems relevant. We cannot assure you that the current $0.34 quarterly cash dividend will not be reduced, or eliminated, in the future.

The contingent conversion features of the notes, if triggered, may adversely affect our financial condition.

In the event a conversion contingency is triggered, holders of notes will be entitled to convert the notes at any time during specified periods at their option. See “Description of Notes — Conversion Rights”. If one or more holders elect to convert their notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than cash in lieu of any fractional shares), we would be required to settle a portion of or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity. In addition, even if holders do not elect to convert their notes, if the method of settlement effective during the period reflected in the financial statements is cash settlement or combination settlement, we would be required under applicable accounting rules to reclassify all of the outstanding principal of the notes as a current rather than long-term liability in such financial statements, which would result in a material reduction of our net working capital.

The convertible note hedge transactions and warrant transactions may affect the value of the notes and our common stock.

In connection with the pricing of the notes, we intend to enter into privately negotiated convertible note hedge transactions with the hedge counterparties. The convertible note hedge transactions cover, subject to customary anti-dilution adjustments, the number of shares of our common stock that will initially underlie the notes sold in the offering. The convertible note hedge transactions are expected to reduce our exposure to potential dilution with respect to our common stock and/or reduce our exposure to potential cash payments that may be required to be made by us upon conversion of the notes. Separately, we also intend to enter into privately negotiated warrant transactions relating to the same number of shares of our common stock with the hedge counterparties with a strike price of $74.648, subject to customary anti-dilution adjustments, pursuant to which we may be obligated to issue shares of our common stock. The warrant transactions could have a dilutive effect with respect to our common stock or, if we so elect, obligate us to make cash payments to the extent that the market price per share of our common stock exceeds the strike price of the warrants on any expiration date of the warrants.

In connection with establishing its initial hedges of the convertible note hedge transactions and the warrant transactions, the hedge counterparties (and/or their affiliates):

• expect to enter into various cash-settled over-the-counter derivative transactions with respect to our common stock concurrently with, or shortly following, the pricing of the notes; and

• may unwind these cash-settled over-the-counter derivative transactions and purchase shares of our common stock in open market transactions shortly following the pricing of the notes.

These activities could have the effect of increasing or preventing a decline in the price of our common stock concurrently with or shortly following the pricing of the notes. The effect, including the direction or magnitude of the effect of these activities, if any, on the market price of our common stock or the notes will depend on several factors, including market conditions, and cannot be ascertained at this time.

In addition, the hedge counterparties (and/or their affiliates) expect to modify their hedge positions following the pricing of the notes from time to time (and are likely to do so during any conversion period related to the conversion of the notes) by entering into or unwinding various over-the-counter derivative transactions with respect to shares of our common stock, and/or by purchasing or selling shares of our common stock or the notes in privately negotiated transactions and/or open market transactions. The effect, if any, of these transactions and activities on the market price of our common stock or the notes will depend in part on market conditions and cannot be ascertained at this time, but any of these activities could adversely affect the value of our common stock and the value of the notes and, as a result, the value that you will receive upon the conversion of the notes.

The decision by the hedge counterparties (and/or their affiliates) to engage in any of these hedging transactions and discontinue any of these transactions with or without notice, once commenced, is within the sole discretion of the hedge counterparties (and/or their affiliates).

In addition, if the convertible note hedge transactions and warrant transactions fail to become effective, or if the offering is not completed, the hedge counterparties or their affiliates may unwind their hedge positions with respect to our common stock, which could adversely affect the value of our common stock and, if the notes have been issued, the value of the notes.

See “Description of the Concurrent Convertible Note Hedge Transactions and Warrant Transactions” and “Underwriting; Conflicts of Interest”.

The convertible note hedge transactions and the warrant transactions are separate transactions (in each case entered into by us with the hedge counterparties), are not part of the terms of the notes and will not affect holders’ rights under the notes. As a holder of the notes, you will not have any rights with respect to the convertible note hedge transaction or the warrant transactions.

We are subject to counterparty risk with respect to the convertible note hedge transactions.

Each hedge counterparty is a financial institution or the affiliate of a financial institution, and we will be subject to the risk that one or more hedge counterparties may default under the convertible note hedge transactions. Our exposure to the credit risk of each hedge counterparty will not be secured by any collateral. Recent global economic conditions have resulted in the actual or perceived failure or financial difficulties of many financial institutions, including a bankruptcy filing by Lehman Brothers Holdings Inc. and its various affiliates. If a hedge counterparty becomes subject to insolvency proceedings, we will become an unsecured creditor in those proceedings with a claim equal to our exposure at that time under the convertible note hedge transaction with that hedge counterparty. Our exposure will depend on many factors but, generally, the increase in our exposure will be correlated to the increase in our stock market price and in volatility of our common stock. In addition, upon a default by a hedge counterparty, we may suffer adverse tax consequences and dilution with respect to our common stock. We can provide no assurances as to the financial stability or viability of the hedge counterparties.

The market price of our common stock has in the past been, and may in the future be, volatile. This volatility may adversely affect the trading price of the notes and the price at which you could sell shares of our common stock you receive upon conversion, if any.

The market price of our common stock has varied between a low of $42.34 on July 20, 2009 and a high of $66.07 on April 20, 2010 in the twelve-month period ended June 30, 2010. This volatility may affect the price at which you could sell the shares of our common stock, if any, you receive upon conversion of your notes, and the sale of substantial amounts of our common stock could adversely affect the price of our common stock. Our stock price is likely to continue to be volatile and subject to significant price and volume fluctuations in response to market and other factors, including:

• variations in our quarterly operating results from our expectations or those of securities analysts or investors;

• strategic actions by us or our competitors, such as significant acquisitions, strategic partnerships, joint ventures or capital commitments;

• changes in market valuations or operating performance of our competitors or companies similar to us;

• additions and departures of key personnel;

• downward revisions in securities analysts’ estimates;

• changes in accounting standards, policies, guidance, interpretations or principles applicable to our business;

• conditions in the industries in which we compete;

• general global macroeconomic conditions; and

• economic, financial, geopolitical, regulatory or judicial events that affect us or the financial markets generally.

In addition, in recent years, the global equity markets have experienced substantial price and volume fluctuations. This volatility has had a significant impact on the market price of securities issued by many companies including us and other companies in our industries. The price of our common stock could fluctuate based on factors that have little or nothing to do with our company and are outside of our control, and these fluctuations could materially reduce the price of our common stock and your ability to sell the shares you receive, if any, upon conversion of your notes at a price at or above the price your paid for your investment.

We may Issue additional shares of our common stock or instruments convertible into our common stock, including in connection with conversions of notes, which could lower the price of our common stock and adversely affect the trading price of the notes.

Subject to lock-up provisions that apply for the first 90 days after the date of this prospectus supplement, we are not restricted from issuing additional shares of our common stock or other instruments convertible into our common stock during the life of the notes. As of June 27, 2010, we had outstanding approximately 39.9 million shares of our common stock, options to purchase approximately 2.5 million shares of our common stock (of which approximately 1.5 million were vested as of that date), approximately 0.4 million of restricted stock awards (which are expected to vest over the next three years) and approximately 20,000 shares of our common stock to be distributed from the deferred compensation plan. In addition, a substantial number of shares of our common stock is reserved for issuance upon the exercise of stock options, upon conversion of the notes and upon the exercise of the warrants to be issued in connection with this offering. We cannot predict the size of future issuances or the effect, if any, that they may have on the market price for our common stock.

If we issue additional shares of our common stock or instruments convertible into our common stock, it may materially and adversely affect the price of our common stock and, in turn, the price of the notes. Furthermore, the conversion of some or all of the notes may dilute the ownership interests of existing stockholders, and any sales in the public market of such shares of our common stock issuable upon any conversion of the notes could adversely affect prevailing market prices of our common stock. In addition, the anticipated issuance and sale of substantial amounts of common stock or conversion of the notes into shares of our common stock could depress the price of our common stock.

Certain provisions of our corporate governing documents and Delaware law could discourage, delay, or prevent a merger or acquisition.

Provisions of our certificate of incorporation and bylaws could impede a merger, takeover or other business combination involving us or discourage a potential acquirer from making a tender offer for our common stock. For example, our certificate of incorporation authorizes our board of directors to determine the number of shares in a series, the consideration, dividend rights, liquidation preferences, terms of redemption, conversion or exchange rights and voting rights, if any, of unissued series of preferred stock, without any vote or action by our stockholders. Thus, our board of directors can authorize and issue shares of preferred stock with voting or conversion rights that could adversely affect the voting or other rights of holders of our common stock. We are also subject to Section 203 of the Delaware General Corporation Law, which imposes restrictions on mergers and other business combinations between us and any holder of 15% or more of our common stock. These provisions could have the effect of delaying or deterring a third party to acquire us even if an acquisition might be in the best interest of our stockholders, and accordingly could reduce the market price of our common stock and the value of your notes.

Certain provisions in the notes and the indenture could delay or prevent an otherwise beneficial takeover or takeover attempt of us.

Certain provisions in the notes and the indenture could make it more difficult or more expensive for a third party to acquire us. For example, if an acquisition event constitutes a fundamental change, holders of the notes will have the right to require us to purchase their notes in cash. In addition, if an acquisition event constitutes a make-whole fundamental change, we may be required to increase the conversion rate for holders who convert their notes in connection with such acquisition event. In either case, and in other cases, our obligations under the notes and the indenture could increase the cost of acquiring us or otherwise discourage a third party from acquiring us or removing incumbent management, and accordingly could reduce the market price of our common stock and the value of your notes.

The accounting method for convertible debt securities that may be settled in cash, such as the notes, could have an adverse effect on our reported financial results.

In May 2008, the Financial Accounting Standards Board, which we refer to as FASB, issued ASC 470-20. Under ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments (such as the notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost. ASC 470-20 requires the fair value of the conversion option of the notes be reported as a component of stockholders’ equity and included in the additional paid-in-capital on our consolidated balance sheet. The value of the conversion option of the notes will be reported as discount to the notes. We will report lower net income in our financial results because ASC 470-20 will require interest to include both the current period’s amortization of the debt discount (non-cash interest) and the instrument’s cash interest, which could adversely affect our reported or future financial results, the trading price of our common stock and the trading price of the notes.