FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

(Mark One)

          Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended March 31, 2002

OR

          Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from              to             

Commission File Number 001-10109

BECKMAN COULTER, INC.
(Exact name of registrant as specified in its charter)

Delaware (State of Incorporation)	95-104-0600 (I.R.S. Employer Identification No.)
4300 N. Harbor Boulevard, Fullerton, California (Address of principal executive offices)	92834-3100 (Zip Code)

(714) 871-4848
(Registrant’s telephone number including area code)

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         No   .

APPLICABLE ONLY TO CORPORATE ISSUERS:

Outstanding shares of common stock, $0.10 par value, as of April 26, 2002: 61,754,123 shares.

TABLE OF CONTENTS

PART I
FINANCIAL INFORMATION
		CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
		CONDENSED CONSOLIDATED BALANCE SHEETS
		CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
		NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
PART II
OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes In Securities
	Item 3. Defaults Upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security-Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
Signatures
EXHIBIT INDEX
EXHIBIT 10.1
EXHIBIT 15

PART I

FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2002 and 2001
	Condensed Consolidated Balance Sheets as of March 31, 2002 and December 31, 2001
	Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2002 and 2001
	Notes to Condensed Consolidated Financial Statements
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	PART II
	OTHER INFORMATION
Item 1.	Legal Proceedings
Item 2.	Changes In Securities
Item 3.	Defaults Upon Senior Securities
Item 4.	Submission of Matters to a Vote of Security-Holders
Item 5.	Other Information
Item 6.	Exhibits and Reports on Form 8-K

2

BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Amounts in Millions, Except Amounts per Share and Share Data)
Unaudited

			Three Months Ended
			March 31,
			2002			2001
Sales			$	446.7		$	432.7
Cost of sales				239.8			230.9
Gross profit				206.9			201.8
Operating costs and expenses:
	Selling, general and administrative			116.0			110.3
	Research and development			41.9			42.2
		Total operating costs and expenses		157.9			152.5
Operating income				49.0			49.3
Non-operating (income)and expense:
	Interest income			(2.2	)		(2.5	)
	Interest expense			11.8			16.4
	Other, net			(0.6	)		1.5
		Total non-operating expense		9.0			15.4
Earnings before income taxes and accounting change				40.0			33.9
Income taxes				12.0			10.5
Earnings before accounting change				28.0			23.4
Cumulative effect of accounting change, net of income taxes of $1.8				—			3.1
		Net earnings	$	28.0		$	20.3
Basic earnings per share:
	Before accounting change		$	0.46		$	0.39
	Cumulative effect of accounting change			—			(0.05	)
			$	0.46		$	0.34
Diluted earnings per share:
	Before accounting change		$	0.43		$	0.37
	Cumulative effect of accounting change			—			(0.05	)
			$	0.43		$	0.32
Weighted average number of shares outstanding (in thousands):
		Basic		61,451			59,998
		Diluted		65,425			63,346
Dividends declared per share			$	0.085		$	0.085

See accompanying notes to condensed consolidated financial statements.

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BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Amounts in Millions, Except Amounts per Share)

				March 31,			December 31,
				2002			2001
				unaudited
Assets
Current assets:
	Cash and equivalents			$	34.5		$	36.0
	Trade and other receivables				518.8			564.6
	Inventories				400.4			366.1
	Other current assets				70.3			68.9
			Total current assets		1,024.0			1,035.6
Property, plant and equipment, net					352.5			347.4
Goodwill					355.3			335.6
Other intangibles, net					351.1			382.1
Other assets					77.1			77.3
			Total assets	$	2,160.0		$	2,178.0
Liabilities and Stockholders’ Equity
Current liabilities:
	Notes payable and current maturities of long-term debt			$	217.1		$	55.0
	Accounts payable, accrued expenses and other liabilities				353.6			384.3
	Income taxes				66.0			70.6
			Total current liabilities		636.7			509.9
Long-term debt, less current maturities					595.9			760.3
Other liabilities					379.1			389.6
			Total liabilities		1,611.7			1,659.8
Stockholders’ equity:
	Preferred stock, $0.10 par value; authorized 10.0 shares; none issued				—			—
	Common stock, $0.10 par value; authorized 150.0 shares; shares issued and outstanding 61.6 and 61.2 at March 31, 2002 and December 31, 2001, respectively				6.1			6.1
	Additional paid-in capital				228.3			216.5
	Retained earnings				366.7			344.0
	Accumulated other comprehensive income (loss):
		Cumulative foreign currency translation adjustment			(62.8	)		(57.2	)
		Derivatives qualifying as hedges			10.0			8.8
			Total stockholders’ equity		548.3			518.2
			Total liabilities and stockholders’ equity	$	2,160.0		$	2,178.0

See accompanying notes to condensed consolidated financial statements.

4

BECKMAN COULTER, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Amounts in Millions)
Unaudited

					Three Months Ended
					March 31,
					2002			2001
Cash Flows from Operating Activities
	Net earnings				$	28.0		$	20.3
	Adjustments to reconcile net earnings to net cash provided by operating activities
			Depreciation and amortization			29.0			33.3
			Cumulative effect of accounting change, net of tax			—			3.1
			Loss on disposal of property, plant and equipment			0.5			—
			Net deferred income taxes			0.6			0.5
			Changes in assets and liabilities:
				Trade and other receivables		49.6			28.6
				Inventories		(32.2	)		(24.4	)
				Accounts payable, accrued expenses and other liabilities		(32.4	)		(36.7	)
				Income taxes payable		(0.7	)		6.3
				Other		(14.2	)		14.2
				Net cash provided by operating activities		28.2			45.2
Cash Flows from Investing Activities
	Additions to property, plant and equipment					(37.1	)		(39.8	)
	Proceeds from sale of property, plant and equipment					—			0.5
	Proceeds from sale of certain clinical chemistry assets					—			0.2
	Payment for acquisition					(1.8	)		—
				Net cash used by investing activities		(38.9	)		(39.1	)
Cash Flows from Financing Activities
	Dividends to stockholders					(5.3	)		(5.1	)
	Proceeds from issuance of stock					8.0			9.2
	Proceeds from stock purchase plan					3.2			3.1
	Notes payable borrowings (reductions), net					5.5			(26.7	)
	Long-term debt reductions					(1.0	)		(1.4	)
	Long-term debt borrowings					—			7.9
				Net cash provided (used) by financing activities		10.4			(13.0	)
Effect of exchange rates on cash and equivalents						(1.2	)		(0.2	)
Decrease in cash and equivalents						(1.5	)		(7.1	)
Cash and equivalents – beginning of period						36.0			29.6
Cash and equivalents — end of period					$	34.5		$	22.5
Supplemental Disclosures of Cash Flow Information
	Cash paid during the period for:
		Interest			$	11.4		$	16.9
		Income taxes			$	12.8		$	4.1
	Non-cash investing and financing activities:
		Acquisition of equipment under capital lease			$	1.1		$	1.3

See accompanying notes to condensed consolidated financial statements.

5

BECKMAN COULTER, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2002
Unaudited

1. Report by Management

Beckman Coulter, Inc. and its wholly owned subsidiaries (the “Company”) prepared the accompanying Condensed Consolidated Financial Statements following the requirements of the Securities and Exchange Commission for interim reporting. As permitted under those rules, certain footnotes or other financial information normally required by accounting principles generally accepted in the United States of America have been condensed or omitted.

The financial statements include all normal and recurring adjustments that the Company considers necessary for the fair presentation of its financial position and operating results. To obtain a more detailed understanding of the Company’s results, these Condensed Consolidated Financial Statements should be read in conjunction with the consolidated financial statements and notes in the Company’s annual report on Form 10-K for the year ended December 31, 2001.

Revenues, expenses, assets and liabilities can vary between the quarters of the year. Therefore, the results and trends in these interim financial statements may not be the same as those for the full year.

Certain prior year amounts have been reclassified to conform to the current year presentation.

2.     Recent Accounting Developments

Goodwill and Other Intangible Assets

Pursuant to Statement of Financial Accounting Standards No. 141 “Business Combinations” (“SFAS 141”), the Company was required to reclassify certain “other intangible assets” (“intangible assets” or “intangibles”) to goodwill on January 1, 2002 that do not meet the definition of an identifiable intangible asset under SFAS 141. Accordingly, on January 1, 2002, $28.1 million of intangible assets were reclassified to goodwill. Additionally, a $9.9 million deferred tax liability associated with a portion of the reclassified intangible assets was reversed to goodwill.

On January 1, 2002, the Company adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets”, (“SFAS 142”). SFAS 142 requires that goodwill and other intangible assets that have indefinite lives not be amortized but rather be tested at least annually for impairment. As a result, net earnings for the first quarter of 2001 includes $4.7 million ($3.9 million net-of-tax) of amortization of goodwill and certain other intangible assets that were not recorded during the first quarter of 2002. The following provides the results of the first quarters of 2002 and 2001 on a comparative basis (in millions):

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		March 31, 2002		March 31, 2001
Reported net income		$	28.0	$	20.3
Add back: Goodwill amortization			—		2.8
Add back: Tradename amortization			—		0.6
Add back: Core technology amortization			—		0.5
Adjusted net income		$	28.0	$	24.2
Basic earnings per share:
	Reported net income	$	0.46	$	0.34
	Goodwill amortization		—		0.04
	Tradename amortization		—		0.01
	Core technology amortization		—		0.01
	Adjusted net income	$	0.46	$	0.40
Diluted earnings per share:
	Reported net income	$	0.43	$	0.32
	Goodwill amortization		—		0.04
	Tradename amortization		—		0.01
	Core technology amortization		—		0.01
	Adjusted net income	$	0.43	$	0.38

The following provides information about our intangible assets (in millions):

		March 31, 2002					December 31, 2001
		Gross Carrying		Accumulated			Gross Carrying		Accumulated
		Amount		Amortization			Amount		Amortization
Amortized intangible assets:
	Technology	$	55.8	$	(13.7	)	$	56.0	$	(13.3	)
	Customer contracts		167.1		(28.6	)		167.1		(26.9	)
	Assembled workforce		—		—			28.1		(4.7	)
	Other		39.2		(8.8	)		45.2		(11.2	)
			262.1	$	(51.1	)		296.4		(56.1	)
Unamortized intangible assets (in 2002):
	Core technology		66.6					81.5		(13.1	)
	Tradename		73.5					87.5		(14.1	)
			140.1					169.0		(27.2	)
		$	402.2				$	465.4	$	(83.3	)

Recorded goodwill and intangible asset amortization expense for the three months ended March 31, 2002 and 2001 was $2.9 million and $7.5 million, respectively. Estimated intangible asset amortization expense (based on existing intangible assets) for the years ended December 31, 2002, 2003, 2004, 2005 and 2006 is $11.8 million, $11.8 million, $11.8 million, $11.7 million and $11.7 million, respectively.

Derivatives and Hedging Activities

Effective January 1, 2001, the Company adopted Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133”). The adoption of SFAS 133 resulted in a

7

cumulative after-tax reduction to income of $3.1 million (net of income taxes of $1.8 million) during the first quarter of 2001.

3. Derivatives

The Company uses derivative financial instruments to hedge foreign currency and interest rate exposures. The Company’s objectives for holding derivatives are to minimize risks using the most effective methods to eliminate or reduce the impacts of these exposures. The Company does not speculate in derivative instruments in order to profit from foreign currency exchange or interest rate fluctuations; nor does the Company enter into trades for which there are no underlying exposures. The following discusses in more detail the Company’s foreign currency and interest rate exposures and related derivative instruments.

Foreign Currency

The Company manufactures its products principally in the United States, but generates approximately 44% of its revenues from sales made outside the United States by its international subsidiaries. Sales generated by the international subsidiaries generally are denominated in the subsidiary’s local currency, thereby exposing the Company to the risk of foreign currency fluctuations. In order to mitigate the impact of changes in foreign currency exchange rates, the Company uses derivative financial instruments (or “foreign currency contracts”) to hedge the foreign currency exposure resulting from cash flows attributable to anticipated foreign currency denominated transactions. These foreign currency contracts include forward and option contracts and are designated as cash flow hedges.

The Company uses foreign currency swap contracts to hedge loans between subsidiaries. These foreign currency swap contracts are designated as fair value hedges.

The Company’s foreign currency swap contract to hedge a net investment in a foreign currency has been designated as a net investment hedge. At March 31, 2002, a $1.3 million gain associated with this foreign currency swap contract was included in accumulated other comprehensive income (i.e., accumulated foreign currency translation adjustment).

8

Prior to the adoption of Derivatives Implementation Issue G20 during the quarter ended September 30, 2001, changes in time value were excluded from the assessment of hedge effectiveness for options designated as cash flow hedges. Hedge ineffectiveness associated with the Company’s cash flow hedges was zero and $0.5 million for the three months ended March 31, 2002 and 2001, respectively. No hedge ineffectiveness was recognized on the Company’s fair value hedges during the three months ended March 31, 2002 and 2001. No fair value or cash flow hedges were discontinued for the three months ended March 31, 2002 and 2001.

Derivative gains and losses included in accumulated other comprehensive income are reclassified into other non-operating (income)/expense upon the recognition of the hedged transaction. The Company estimates that $8.8 million of the $10.0 million unrealized gain included in other comprehensive income at March 31, 2002 will be reclassified to other non-operating (income)/expense within the next twelve months. The actual amounts that will be reclassified to earnings over the next twelve months will vary from this amount as a result of changes in market conditions. The Company has cash flow hedges at March 31, 2002 which settle as far out as March 31, 2004.

Interest Rate

The Company uses interest rate derivative contracts on certain borrowing transactions to hedge fluctuating interest rates. Interest differentials paid or received under these contracts are recognized as adjustments to the effective yield of the underlying financial instruments hedged.

Pursuant to our reverse interest rate swap agreements, as amended, the Company receives an average fixed interest rate of 6.2% and pays a floating interest rate (1.9% at March 31, 2002). These reverse interest rate swaps are designated as fair value hedges and are deemed perfectly effective. At March 31, 2002, the fair value of the reverse interest rate swaps was $7.0 million and is included in other assets. An offsetting $7.0 million credit is included in long-term debt as a fair value adjustment.

4.     Comprehensive Income

The Company’s components of comprehensive income include net earnings, foreign currency translation adjustments and derivatives qualifying as hedges, as follows (in millions):

			Three Months Ended
			March 31,
			2002			2001
Net earnings			$	28.0		$	20.3
	Foreign currency translation adjustment			(5.6	)		4.7
	Derivatives qualifying as hedges:
		Net derivative gains		3.1			10.9
		Reclassifications to income		(1.9	)		(0.8	)
				1.2			10.1
Comprehensive income			$	23.6		$	35.1

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5. Earnings Per Share

The following is a reconciliation of the numerators and denominators used in computing basic and diluted earnings per share (“EPS”) before accounting change (in millions, except amounts per share):

		Three Months Ended March 31,
		2002							2001
		Net				Per Share			Earnings Before				Per Share
		Earnings		Shares		Amount			Accounting Change		Shares		Amount
Basic EPS:
	Net earnings	$	28.0		61.451	$	0.46		$	23.4		59.998	$	0.39
	Effect of dilutive stock options		—		3.974		(0.03	)		—		3.348		(0.02	)
Diluted EPS:
	Net earnings	$	28.0		65.425	$	0.43		$	23.4		63.346	$	0.37

At March 31, 2002, there were no shares relating to the possible exercise of outstanding stock options excluded from the computation of diluted EPS. At March 31, 2001, there were 1.4 million shares relating to the possible exercise of outstanding stock options that were not included in the computation of diluted EPS as their effect would have been anti-dilutive.

6.     Sale of Receivables

During the three months ended March 31, 2002, the Company sold certain sales-type lease receivables as part of the Company’s plan to reduce debt. The net book value of financial assets sold was $19.9 million for which the Company received $20.8 million in cash proceeds. During the three months ended March 31, 2001, the Company sold similar assets with a net book value of $17.4 million for cash proceeds of $18.5 million. The transactions were accounted for as asset sales and as a result the related receivables have been excluded from the accompanying Condensed Consolidated Balance Sheets. The sales are subject to certain recourse and servicing provisions, and as such the Company has established reserves for these probable liabilities.

7.     Inventories

Inventories consisted of the following (in millions):

	March 31, 2002		December 31, 2001
Finished products	$	275.5	$	238.8
Raw materials, parts and assemblies		99.5		104.7
Work in process		25.4		22.6
	$	400.4	$	366.1

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8. Contingencies

In December 1999, Streck Laboratories, Inc. (“Streck”) sued Beckman Coulter, Inc. and Coulter Corporation in the United States District Court for the District of Nebraska. Streck alleges that certain hematology control products sold by Beckman Coulter Inc. and/or Coulter Corporation infringe each of six patents owned by Streck, and seeks injunctive relief, damages, attorney fees and costs. Beckman Coulter, Inc., on behalf of itself and Coulter Corporation, denied liability. The trial is currently scheduled for July 2002. The Company believes that there is no reasonable basis to conclude that this litigation could lead to an outcome that would have a material adverse effect on its consolidated results of operations, financial position or liquidity.

In addition to the above matter, the Company is involved in a number of other lawsuits, which the Company considers ordinary and routine in view of its size and the nature of its business. The Company does not believe that any ultimate liability resulting from any such lawsuits will have a material adverse effect on its results of operations, financial position or liquidity.

9.     Business Segment Information

The Company is engaged primarily in the design, manufacture and sale of laboratory instrument systems and related products. In 2001, the Company’s organization had two reportable segments: (1) clinical diagnostics and (2) life science research. In the first quarter of 2002, the Company formed a third reportable segment, specialty testing. The clinical diagnostics segment encompasses diagnostic applications, principally in hospital laboratories. The life science research segment includes life sciences and drug discovery applications in universities, medical schools, and pharmaceutical and biotechnology companies. The specialty testing segment focuses on customers in medical centers, reference laboratories and pharmaceutical research organizations who perform clinical trials, conduct disease related research and perform esoteric testing. All corporate activities including financing transactions are captured in a central services “Center”, which is reflected in the tables below. The Company evaluates performance based on profit or loss from operations. Reportable segments are managed separately, since each business requires different technologies and/or products.

Certain prior year amounts included in the following tables have been reclassified to conform to the current year presentation.

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(in millions)				For the quarters ended
				March 31,
				2002			2001
Net sales
	Clinical diagnostics			$	313.9		$	302.1
	Life science research				90.6			84.7
	Specialty testing				42.2			45.9
	Center				—			—
		Consolidated		$	446.7		$	432.7
Operating income
	Clinical diagnostics			$	61.9		$	52.6
	Life science research				9.5			10.4
	Center				(22.4	)		(13.7	)
		Consolidated		$	49.0		$	49.3
Operating income
	Clinical diagnostics			$	60.1
	Life science research				9.5
	Specialty testing				1.8
	Center				(22.4	)
		Consolidated		$	49.0
Interest income
	Clinical diagnostics			$	(1.9	)	$	(1.0	)
	Life science research				—			—
	Specialty testing				—			—
	Center				(0.3	)		(1.5	)
		Consolidated		$	(2.2	)	$	(2.5	)
Interest expense
	Clinical diagnostics			$	—		$	—
	Life science research				—			—
	Specialty testing				—			—
	Center				11.8			16.4
		Consolidated		$	11.8		$	16.4
Sales to external customers
	Americas			$	296.8		$	281.6
	Europe				105.8			103.0
	Asia				44.1			48.1
			Consolidated	$	446.7		$	432.7

			March 31, 2002		December 31, 2001
Long-lived assets
	Americas		$	1,026.2	$	1,031.5
	Europe			91.1		93.0
	Asia			18.7		17.9
		Consolidated	$	1,136.0	$	1,142.4

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			March 31, 2002		December 31, 2001
Total assets
	Clinical diagnostics			1,490.4		1,502.0
	Life science research			319.7		326.6
	Specialty testing			190.9		196.4
	Center			159.0		153.0
		Consolidated		2,160.0	$	2,178.0
Goodwill
	Clinical diagnostics			315.9		296.9
	Life science research			7.1		7.1
	Specialty testing			32.3		31.6
	Center			—		—
		Consolidated		355.3	$	335.6

10. Stockholders’ Equity

During the three months ended March 31, 2002, the Company recorded a $3.8 million increase to additional paid-in capital with an offsetting decrease to income taxes payable as a result of the tax benefit received from employees exercising non-qualified stock options.

11.     Debt Financing and Guarantor Subsidiaries

In March 1998 the Company issued $160.0 million of 7.10% Senior Notes due 2003 and $240.0 million of 7.45% Senior Notes due 2008 (the “Offering”). In connection with the Offering, certain of the Company’s subsidiaries (the “Guarantor Subsidiaries”) jointly, fully, severally and unconditionally guaranteed such notes. Pursuant to Securities and Exchange Commission regulations, certain condensed financial information about the Parent, Guarantor Subsidiaries and Non-Guarantor Subsidiaries is required to be disclosed. The following provides this required financial information. It should be noted that the Company used the equity method of accounting for its investments in subsidiaries and the Guarantor Subsidiaries’ investments in Non-Guarantor Subsidiaries.

A plan for the complete liquidation and dissolution of one of the Company’s guarantor subsidiaries was adopted in 2001. Pursuant to the plan, substantially all of this guarantor subsidiary’s assets and liabilities were assigned and transferred to the Parent in 2001. It is anticipated that the remainder of this guarantor subsidiary’s assets and liabilities will be assigned and transferred to the Parent in 2002.

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Condensed Consolidated
Statement of Operations
Quarter ended						Guarantor			Non-Guarantor
March 31, 2002				Parent		Subsidiaries			Subsidiaries		Eliminations			Consolidated
Sales				$	385.8	$	0.4		$	225.0	$	(164.5	)	$	446.7
Operating costs and expenses:
	Cost of sales				225.1		0.1			174.1		(159.5	)		239.8
	Selling, general and administrative				77.4		0.1			38.5		—			116.0
	Research and				—		—			—
		development			39.8		1.0			1.1		—			41.9
			Operating income (loss)		43.5		(0.8	)		11.3		(5.0	)		49.0
Non-operating (income) expense					1.7		(0.1	)		0.4		7.0			9.0
Earnings (loss) before income taxes					41.8		(0.7	)		10.9		(12.0	)		40.0
Income taxes expense (benefit)					10.8		(0.2	)		3.4		(2.0	)		12.0
			Net earnings (loss)	$	31.0	$	(0.5	)	$	7.5	$	(10.0	)	$	28.0

Condensed Consolidated
Statement of Operations
Quarter ended						Guarantor			Non-Guarantor
March 31, 2001			Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Sales				$	349.5	$	69.3		$	202.2		$	(188.3	)	$	432.7
Operating costs and expenses:
	Cost of sales				216.1		53.9			148.2			(187.3	)		230.9
	Selling, general and administrative				61.0		9.8			39.5						110.3
	Research and development				24.3		16.8			1.1						42.2
		Operating income (loss)			48.1		(11.2	)		13.4			(1.0	)		49.3
Non-operating (income) expenses					13.3		3.4			(0.7	)		(0.6	)		15.4
Earnings (loss) before income taxes and accounting change					34.8		(14.6	)		14.1			(0.4	)		33.9
Income tax expense (benefit)					10.8		(4.5	)		4.4			(0.2	)		10.5
Earnings (loss) before accounting change					24.0		(10.1	)		9.7			(0.2	)		23.4
Cumulative effect of accounting change					3.1											3.1
		Net earnings (loss)		$	20.9	$	(10.1	)	$	9.7		$	(0.2	)	$	20.3

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Condensed Consolidated								Non-
Balance Sheet						Guarantor		Guarantor
March 31, 2002			Parent			Subsidiaries		Subsidiaries		Eliminations			Consolidated
Assets:
	Cash and equivalents		$	(40.0	)	$	0.5	$	74.0	$	—		$	34.5
	Trade and other receivables			261.9			0.2		256.7		—			518.8
	Inventories			289.4			—		129.9		(18.9	)		400.4
	Other current assets			216.4			43.3		71.1		(260.5	)		70.3
		Total current assets		727.7			44.0		531.7		(279.4	)		1,024.0
	Property, plant and equipment, net			314.0			2.8		92.4		(56.7	)		352.5
	Goodwill			351.0			—		4.3		—			355.3
	Other intangibles			344.0			—		7.1		—			351.1
	Other assets			569.0			178.1		543.1		(1,213.1	)		77.1
		Total assets	$	2,305.7		$	224.9	$	1,178.6	$	(1,549.2	)	$	2,160.0
Liabilities:
	Notes payable and current maturities of long-term debt		$	173.0		$	—	$	44.1	$	—		$	217.1
	Accounts payable, accrued expenses and other liabilities			262.5			0.3		90.8		—			353.6
	Income taxes and other			246.3			—		86.1		(266.4	)		66.0
		Total current liabilities		681.8			0.3		221.0		(266.4	)		636.7
	Long-term debt, less current maturities			587.6			—		8.3		—			595.9
	Other liabilities			491.1			—		246.0		(358.0	)		379.1
		Total liabilities		1,760.5			0.3		475.3		(624.4	)		1,611.7
Total stockholders’ equity				545.2			224.6		703.3		(924.8	)		548.3
		Total liabilities and stockholders’ equity	$	2,305.7		$	224.9	$	1,178.6	$	(1,549.2	)	$	2,160.0

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Condensed Consolidated									Non-
Balance Sheet						Guarantor			Guarantor
December 31, 2001			Parent			Subsidiaries			Subsidiaries		Eliminations			Consolidated
Assets:
	Cash and equivalents		$	(29.4	)	$	(3.1	)	$	68.5	$	—		$	36.0
	Trade and other receivables			274.2			0.2			290.2		—			564.6
	Inventories			276.2			—			121.1		(31.2	)		366.1
	Other current assets			1,307.1			43.0			122.7		(1,403.9	)		68.9
		Total current assets		1,828.1			40.1			602.5		(1,435.1	)		1,035.6
	Property, plant and equipment, net			298.6			3.0			112.7		(66.9	)		347.4
	Goodwill			328.5			—			7.1		—			335.6
	Other intangibles			377.9			—			4.2		—			382.1
	Other assets			654.5			182.3			315.6		(1,075.1	)		77.3
		Total assets	$	3,487.6		$	225.4		$	1,042.1	$	(2,577.1	)	$	2,178.0
Liabilities:
	Notes payable and current maturities of long-term debt		$	3.9		$	—		$	51.1	$	—		$	55.0
	Accounts payable, accrued expenses and other liabilities			259.7			0.3			124.3		—			384.3
	Income taxes and other			1,084.1			—			156.7		(1,170.2	)		70.6
		Total current liabilities		1,347.7			0.3			332.1		(1,170.2	)		509.9
	Long-term debt, less current maturities			746.1			—			14.2		—			760.3
	Deferred income taxes and other liabilities			881.7			—			—		(492.1	)		389.6
		Total liabilities		2,975.5			0.3			346.3		(1,662.3	)		1,659.8
Total stockholders’ equity				512.1			225.1			695.8		(914.8	)		518.2
		Total liabilities and stockholders’ equity	$	3,487.6		$	225.4		$	1,042.1	$	(2,577.1	)	$	2,178.0

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Condensed Consolidated									Non-
Statement of Cash Flows						Guarantor			Guarantor
Quarter Ended March 31, 2002			Parent			Subsidiaries			Subsidiaries			Consolidated
Net cash (used) provided by operating activities			$	(7.1	)	$	3.6		$	31.7		$	28.2
Cash flows from investing activities:
	Additions to property, plant and equipment			(24.0	)		—			(13.1	)		(37.1	)
	Payment for acquisition			—			—			(1.8	)		(1.8	)
		Net cash used by investing activities		(24.0	)		—			(14.9	)		(38.9	)
Cash flows from financing activities:
	Dividends to stockholders			(5.3	)		—			—			(5.3	)
	Proceeds from issuance of stock			8.0			—			—			8.0
	Proceeds from stock purchase plan			3.2			—			—			3.2
	Notes payable borrowings, net			—			—			5.5			5.5
	Net intercompany borrowings (reductions)			14.6			—			(14.6	)		—
	Long-term debt reductions			—			—			(1.0	)		(1.0	)
		Net cash provided (used) by financing activities		20.5			—			(10.1	)		10.4
Effect of exchange rates on cash and equivalents				—			—			(1.2	)		(1.2	)
(Decrease) increase in cash and equivalents				(10.6	)		3.6			5.5			(1.5	)
Cash and equivalents – beginning of period				(29.4	)		(3.1	)		68.5			36.0
Cash and equivalents – end of period			$	(40.0	)	$	0.5		$	74.0		$	34.5

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Condensed Consolidated									Non-
Statement of Cash Flows						Guarantor			Guarantor
Quarter Ended March 31, 2001			Parent			Subsidiaries			Subsidiaries			Consolidated
Net cash provided (used) by operating activities			$	3.4		$	(4.2	)	$	46.0		$	45.2
Cash flows from investing activities:
	Additions to property, plant and equipment			(26.1	)		(3.0	)		(10.7	)		(39.8	)
	Proceeds from sale of certain clinical chemistry assets			—			—			0.2			0.2
	Proceeds from sale of property, plant and equipment			—			0.5			—			0.5
		Net cash used by investing activities		(26.1	)		(2.5	)		(10.5	)		(39.1	)
Cash flows from financing activities:
	Dividends to stockholders			(5.1	)		—			—			(5.1	)
	Proceeds from issuance of stock			9.2			—			—			9.2
	Proceeds from stock purchase plan			3.1			—			—			3.1
	Notes payable (reductions) borrowings			(29.0	)		—			2.3			(26.7	)
	Net intercompany (reductions) borrowings			24.1			1.9			(26.0	)		—
	Long-term debt borrowings (reductions)			8.9			—			(2.4	)		6.5
		Net cash provided (used) by financing activities		11.2			1.9			(26.1	)		(13.0	)
Effect of exchange rates on cash and equivalents				—			—			(0.2	)		(0.2	)
(Decrease) increase in cash and equivalents				(11.5	)		(4.8	)		9.2			(7.1	)
Cash and equivalents – beginning of period				(28.3	)		(4.3	)		62.2			29.6
Cash and equivalents – end of period			$	(39.8	)	$	(9.1	)	$	71.4		$	22.5

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

Overview

Beckman Coulter simplifies and automates laboratory processes used in all phases of the battle against disease. We design, manufacture and market systems that consist of instruments, chemistries, software and supplies that meet a variety of biomedical laboratory needs. Our products are used in a range of applications, from instruments used for pioneering medical research, clinical trials and drug discovery to diagnostic systems found in hospitals and physicians’ offices to aid in patient care. We compete in market segments that we estimate totaled approximately $33 billion in annual sales worldwide in 2001. We currently have products that address approximately half of that market.

Our product lines include virtually all blood tests routinely performed in hospital laboratories and a range of systems for medical and pharmaceutical research. We have nearly 200,000 systems operating in laboratories around the world, with approximately 62% of 2001 revenues coming from after-market customer purchases of operating supplies, chemistry kits and service. We market our products in more than 130 countries, with approximately 44% of revenues in 2001 coming from sales outside the United States.

Our strategy is to maintain our position as a leading provider of laboratory systems. To this end, we achieved the following significant milestones during the quarter ended March 31, 2002:

• Signed agreements with Orchid BioSciences, Inc. for the license to use its SNP-IT primer extension technology for single nucleotide polymorphism applications on multiple Beckman Coulter platforms used in R&D, specialty and patient care testing.

• Signed collaborative cross-licensing agreement with Corixa Corporation granting it the rights to Beckman Coulter’s proprietary MHC Tetramer Technology for use in preclinical research. In turn, Beckman Coulter was granted licensing fees and a license to patented technology, which it intends to use in the development of MHC Tetramers for autoimmune disease diagnostics.

• Announced an alliance with Ciphergen Biosystems, Inc. to automate clinical proteomics research by combining Ciphergen’s biomarker discovery and assay platform with a custom-configured version of Beckman Coulter’s Biomek® 2000 liquid handling workstation.

• Released new CRPH, a high-sensitivity laboratory test available on the Immage® immunochemistry system and SYNCHRON LX®20 PRO chemistry analyzer to help physicians determine patient risk of coronary artery disease.

• Shipped new Cytomics™ FC 500, a dual laser, five-color flow cytometer for the cell-based research market.

• Introduced and shipped new CEQ™ 8000 genetic analysis system which uses one gel, one array and one software platform to perform a wide variety of DNA-related tests.

Results of Operations

Sales were $446.7 million during the first quarter of 2002, an increase of 3.2% compared to $432.7 million during the quarter ended March 31, 2001. On a constant currency basis, sales increased 4.7% in the first quarter of 2002. The following provides key product and geographical sales information (amounts in millions):

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KEY PRODUCT SALES

				Reported			Constant Currency
		$		Growth %			Growth %
Routine Chemistry		$	128.5		4.0			5.1
Immunodiagnostics			84.1		7.4			8.2
	Total Chemistry		212.6		5.4			6.3
Hematology			101.3		1.0			2.6
	Total Clinical Diagnostics		313.9		3.9			5.1
Robotic Auto./Genetic Analysis			30.1		16.2			19.7
Centrifuge/Analytical Systems			60.5		2.9			4.8
	Total Life Science Research		90.6		7.0			9.3
	Total Specialty Testing		42.2		(8.1	)		(5.9	)
	Total Beckman Coulter	$	446.7		3.2			4.7

GEOGRAPHICAL SALES

				Reported			Constant Currency
		$		Growth %			Growth %
Americas			296.8		5.4			5.7
Europe			105.8		2.7			5.0
Asia			44.1		(8.3	)		(1.2	)
	Total Beckman Coulter	$	446.7		3.2			4.7

Sales during the quarter ended March 31, 2002 were affected by the following:

• Clinical diagnostics growth was mainly due to immunodiagnostics sales growing 8.2% in constant currency, led by a 16% increase in Access immunoassay product sales, including such tests as the new AcuTnI cardiac assay.

• Life science research was led by robotic automation & genetic analysis sales growing 19.7% in constant currency, driven by placements of the Biomek FX laboratory automation workstation and strong CEQ genetic analysis product sales.

• Specialty testing sales were down 5.9% in constant currency due to declining sales of reagents we produce for another manufacturer. Excluding OEM reagent sales, specialty testing was up approximately 3%.

Gross profit as a percentage of sales (“gross margin”) in the first quarter of 2002 was 46.3%, compared to 46.6% in the same period in the prior year. On a constant currency basis, gross margin was 46.7%, a 0.1 percentage point improvement from the same period in the prior year.

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Selling, general and administrative (“SG&A”) expenses increased $5.7 million to $116.0 million or 26.0% of sales in the first quarter of 2002 from $110.3 million or 25.5% of sales in the first quarter of 2001. The following factors impacted SG&A during the quarter ended March 31, 2001:

• A reversal of a $3.8 million accrual associated with a cross licensing agreement, and

• $4.7 million of amortization of goodwill and certain other intangible assets that was not recorded during the quarter ended March 31, 2002, pursuant to the adoption of Statement of Financial Accounting Standards No. 142 “Goodwill and Other Intangible Assets” (see Note 2 “Accounting Changes” of the Condensed Consolidated Financial Statements).

Excluding the above items, SG&A during the quarter ended March 31, 2001 would have been $109.2 million, or 25.2% of sales. The increase in SG&A as a percentage of sales during the quarter ended March 31, 2002 is due to additional costs associated with new product introductions.

Research and Development (“R&D”) expenses decreased $0.3 million to $41.9 million in the first quarter of 2002 from $42.2 million in the first quarter of 2001. R&D as a percentage of sales was 9.4% during the quarter ended March 31, 2002 compared to 9.8% during the quarter ended March 31, 2001.

Interest expense decreased $4.6 million to $11.8 million in the first quarter of 2002 from $16.4 million in the first quarter of 2001. The decrease from the prior year quarter was due to lower average debt balances and lower interest rates on the variable rate portion of our borrowings.

Other non-operating (income)/expense was $(0.6) million for the quarter ended March 31, 2002 and primarily consisted of a gain on the sale of certain sales-type lease receivables of $(0.8) million (see Note 6 “Sale of Receivables” of the Condensed Consolidated Financial Statements). Other non-operating (income)/expense was $1.5 million for the quarter ended March 31, 2001 and primarily consisted of the following:

• a write-down of $4.7 million for an equity investment in point-of-care testing;

• a gain on foreign currency related activities of $(2.0) million; and

• a gain on the sale of certain sales-type lease receivables of $(0.9) million.

Income taxes as a percentage of earnings before income taxes (“effective tax rate”) improved to 30% for the first quarter of 2002 versus 31% for the first quarter of 2001. This improvement was primarily due to the adoption of SFAS 142 (see Note 2 “Accounting Changes” of the Condensed Consolidated Financial Statements), which requires (among other things) that goodwill not be amortized. The non-amortization of goodwill improves a company’s effective tax rate when goodwill is not deductible for tax purposes.

Earnings were $28.0 million for the first quarter of 2002 or $0.43 per diluted share compared to earnings before an accounting change of $23.4 million or $0.37 per diluted share in 2001.

Financial Condition

The debt-to-capital ratio has improved from 61.1% at December 31, 2001 to 59.7% at March 31, 2002. Among other things, our debt level:

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

• could limit our ability to obtain additional financing on favorable terms; and

• requires the dedication of a substantial portion of our cash flow from operations to the payment of principal and interest on indebtedness.

In addition, our agreements with our lenders contain a number of covenants, which, among other things, require us to comply with specified financial ratios and tests. At March 31, 2002, we are in compliance with such financial ratios and tests.

Operating activities provided cash of $28.2 million in the first three months of 2002 compared to $45.2 million in the first three months of the prior year. The primary contributors to the decrease were:

• increases in inventories used $32.2 million in 2002 as compared to $24.4 million used in 2001;

21

• other operating assets and liabilities used $14.2 million in 2002 versus $14.2 contributed in 2001. The decrease was primarily due to the funding of one of our pension plans during the first three months of 2002; and

• income tax payable used $0.7 million in 2002 versus $6.3 million contributed in 2001.

These contributors were partially offset by the following:

• increase in earnings of $7.7 million between 2002 and 2001; and

• reductions in trade and other receivables of $49.6 million in 2002 versus $28.6 million in 2001.

In 2002 and 2001, investing activities used $38.9 million and $39.1 million, respectively, of net cash primarily consisting of $37.1 million and $39.8 million, respectively, of additions to property, plant and equipment.

Net cash provided by financing activities was $10.4 million for the first three months of 2002 compared to $13.0 million used in first three months of the prior year. Net cash borrowings on our debt were $4.5 million in 2002 compared to $20.2 million used in 2001. We paid $5.3 million and $5.1 million in dividends to our stockholders in 2002 and 2001, respectively. Proceeds received from the issuance of stock were $8.0 million and $9.2 million in 2002 and 2001, respectively.

Our strategies for growth require a flexible infrastructure. As a result of an aggressive acquisition schedule in 1996 and 1997, there are multiple systems and processes currently in use throughout the company. We have chosen to implement an Oracle enterprise resource planning system (“ERP”) to achieve a single, globally integrated infrastructure. This includes functionality for Finance, Human Resources, Supply Chain, Order Management, Sales and Service to replace or complement existing legacy systems and business processes. We expect that the majority of the work required to implement these new systems will take place through 2003. If we are unable to implement and effectively manage the transition to this new integrated system, our future consolidated operating results could be adversely affected.

Based upon current levels of operations, anticipated cost savings and future growth, we believe our cash flow from operations (including the continued ability to sell sales-type lease receivables; see Note 6 “Sale of Receivables” of the Consolidated Financial Statements), together with available borrowings under the credit facility (which expires in October 2002, see below) and other sources of liquidity (including other credit facilities, leases and any other available financing sources) will be adequate to meet our anticipated requirements for interest payments and other debt service obligations, working capital, capital expenditures, lease payments and other operating needs. There can be no assurance, however, that our business will continue to generate cash flow at or above current levels or that estimated cost savings or growth can be achieved. Future operating performance and our ability to service or refinance existing indebtedness, will be subject to future economic conditions and to financial, business and other factors, many of which are beyond our control.

As further discussed in our 2001 annual report, the Company entered into a credit facility in October 1997 with a group of financial institutions. This credit facility matures in October 2002 and had a zero outstanding balance at March 31, 2002. We are in the process of negotiating a new credit facility, which we anticipate finalizing prior to November 2002.

In March 1998, we issued $160.0 million of 7.10% unsecured Senior Notes due March 2003 (see further discussion in our 2001 annual report). We anticipate repaying these Senior Notes through operating cash flows, our existing credit facility and/or a new credit facility (which we are in the process of negotiating, see above).

In March 2002, we paid a quarterly cash dividend of $0.085 per share of common stock, for a total of $5.3 million.

Critical Accounting Policies

The Securities and Exchange Commission defines critical accounting policies as those that are, in management’s view, most important to the portrayal of the company’s financial condition and results of operations and most demanding in their calls on judgment. We believe our most critical accounting policies relate to:

• revenue recognition;

• reserves for doubtful accounts;

• inventory adjustments for write-down of inventories to fair value;

• determination of useful lives of identifiable intangible assets;

• environmental and legal obligations; and

• tax valuation allowances and obligations.

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We use a combination of historical results and anticipated future events to estimate and make assumptions relating to our critical accounting policies. Actual results could differ from our estimates.

Business Climate

The clinical diagnostics, speciality testing, and life science research markets are highly competitive with many manufacturers around the world.

The clinical diagnostics market continues to be unfavorably impacted by the economic weakness in parts of Europe, Asia and Latin America and government and healthcare cost containment initiatives in general. In addition, attempts to lower costs and to increase productivity have led to further consolidation among healthcare providers in the United States, resulting in more powerful provider groups that continue to leverage their purchasing power to contain costs. Preferred supplier arrangements and combined purchases are becoming more commonplace. Consequently, it has become essential for manufacturers to provide cost-effective diagnostic systems to remain competitive. Cost containment initiatives in the United States and in the European healthcare systems will continue to be factors which may affect our ability to maintain or increase sales. Future profitability may also be adversely affected if the relative value of the U.S. dollar strengthens against certain currencies.

The continuing consolidation trend among United States healthcare providers, mentioned previously, has increased pressure on diagnostic equipment manufacturers to broaden their product offerings to encompass a wider range of testing capability, greater automation and higher volume capacity at a lower cost. In the hospital market, the primary focus of Beckman Coulter's diagnostic business, funding is better than it has been in several years. In addition, as labor shortages continue to be an issue in clinical laboratories, our automated systems are filling the void. Beckman Coulter is the world's leading manufacturer of hematology systems for the clinical analysis of blood cells, where we have a market share twice the size of our next largest competitor. In addition, Beckman Coulter is considered a technology leader in cell counting and characterization and has a number two position in flow cytometry, which is used for both research and clinical applications.

With our leadership position in cellular analysis and our extensive capabilities in routine and immunodiagnostics, we are able to offer a broad range of automated systems that together can perform more than 75% of a hospital laboratory’s testing needs and essentially 100% of the blood tests that are considered routine. We believe we are able to provide significant value-added benefits, enhanced through our expertise in simplifying and automating laboratory processes, to our customers.

In the specialty testing market, the environment is positive with an increasing need for applications in the areas of clinical research and clinical trials. Investment by pharmaceutical companies, contract research organizations and large research hospitals is subject to changes in the economic environment and may be impacted by government intervention and regulation, including prescription drugs.

The life science research market also continues to be affected by governmental constraints on research and development spending outside the United States. U.S. supported research has been positive in recent years but is subject to yearly approval by Congress. Continued positive funding is not guaranteed and may be negatively impacted by a prolonged recession, attempts to contain government spending in order to balance the budget and reduce deficit spending, or the need to make funds available for other programs. For now, the academic research market is growing, with the National Institutes of Health funding up 15% in 2002. Spending on research by biotechnology and pharmaceutical companies is also dependent on global economic health. An ongoing recession can affect the number of biotechnology start-ups building laboratories and conducting research as well as the rate of research investment by biopharmaceuticals. In addition, we have recently seen a slowdown in drug discovery spending by pharmaceutical companies. Spending now appears to be moving from drug discovery into drug development, as pharmaceutical companies focus on bringing new products to market, faster. However, we believe this move opens new opportunities for robotic automation systems and in clinical research and clinical trial applications. Pharmaceutical company research investment may be further negatively impacted by government intervention and regulation, including prescription drug costs.

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Our new products originate from four sources:

• internal research and development programs;

• external collaborative efforts with individuals in academic institutions and technology companies;

• devices and techniques that are generated in customers’ laboratories; and

• business and technology acquisitions.

The size and growth of our markets are influenced by a number of factors, including:

• technological innovation in bioanalytical practice;

• government funding for basic and disease-related research (for example, heart disease, AIDS and cancer);

• research and development spending by biotechnology and pharmaceutical companies;

• healthcare spending; and

• physician practice patterns.

We expect worldwide healthcare expenditures and diagnostic testing to increase over the long-term, primarily as a result of the following:

• growing demand for services generated by the increasing size and aging of the world population;

• increasing expenditures on diseases requiring costly or extended treatment (for example, AIDS and cancer); and

• expanding demand for improved healthcare services in developing countries.

In addition to the business climate factors discussed previously, certain economic factors may influence our business:

• currency fluctuations – as approximately 44% of our revenues are generated outside the United States and given the recent fluctuations in foreign currencies, we may experience volatility in sales, operating income and other non-operating income and expense; and

• interest rates – as approximately 31% of our debt is under variable interest rate terms. This percentage includes the effect of our reverse interest rate swap derivatives which change the character of the interest rate on certain of our long-term debt by effectively converting a fixed rate to a variable rate.

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Forward-Looking Statements

This Form 10-Q contains forward-looking statements, including statements regarding, among other items:

• the schedule for completion of our ERP program;

• anticipated debt reduction, cash flow available to be applied to debt reduction and the availability of additional financing;

• our business strategy;

• anticipated proceeds from sales of assets;

• anticipated trends in our business; and

• our liquidity requirements and capital resources.

These forward-looking statements are based on our expectations and are subject to a number of risks and uncertainties, some of which are beyond our control. These risks and uncertainties include, but are not limited to:

• unanticipated delays in completing our ERP program;

• complexity and uncertainty regarding development of new high-technology products;

• loss of market share through aggressive competition in the clinical diagnostic, life science research and specialty testing markets;

• our dependence on capital spending policies and government funding;

• the effects of potential healthcare reforms;

• fluctuations in foreign exchange rates and interest rates;

• reliance on patents and other intellectual property;

• global economic and political conditions;

• unanticipated reductions in cash flows and difficulty in sales of assets;

• the finalization of a new credit facility;

• future effective tax rates; and

• other factors that cannot be identified at this time.

Although we believe we have the product offerings and resources required to achieve our objectives, actual results could differ materially from those anticipated by these forward-looking statements. There can be no assurance that events anticipated by these forward-looking statements will in fact transpire as expected.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Securities and Exchange Commission requires that registrants include information about potential effects of changes in currency exchange and interest rates in their Form 10-K filings. Several alternatives, all with some limitations, have been offered. The following discussion is based on a sensitivity analysis, which models the effects of fluctuations in currency exchange rates and interest rates. This analysis is constrained by several factors, including the following:

• it is based on a single point in time; and

• it does not include the effects of other complex market reactions that would arise from the changes modeled.

Although the results of the analysis may be useful as a benchmark, they should not be viewed as forecasts.

Our most significant foreign currency exposures relate to the euro, Japanese Yen, British Pound Sterling, Australian Dollar and the Canadian Dollar. As of March 31, 2002 and December 31, 2001, the net fair value of all derivative foreign exchange contracts was an unrecognized gain of $12.1 million and $11.6 million, respectively. We estimated the sensitivity of the fair value of all derivative foreign exchange contracts to a hypothetical 10% strengthening and 10% weakening of the spot exchange rates for the U.S. dollar against the foreign currencies at March 31, 2002. The analysis showed that a 10% strengthening of the U.S. dollar would result in a gain in fair value of $17.7 million and a 10% weakening of the U.S. dollar would result in a loss in fair value of $18.1 million in these instruments. Losses and gains on the underlying transactions being hedged would largely offset any gains and losses on the fair value of derivative contracts. These offsetting gains and losses are not reflected in the above analysis. Our March 31, 2002 significant foreign currency exposures were not significantly different than those at December 31, 2001.

Similarly, we performed a sensitivity analysis on our variable rate debt instruments and derivatives. A one percentage point increase or decrease in interest rates was estimated to decrease or increase current year’s pre-tax earnings by $1.9 million based on the amount of debt outstanding at March 31, 2002.

Additional information with respect to our foreign currency and interest rate exposures are discussed in Note 3 “Derivatives” of the Condensed Consolidated Financial Statements.

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PART II

OTHER INFORMATION

Item 1.

Legal Proceedings

In December 1999, Streck Laboratories, Inc. sued Beckman Coulter, Inc. and Coulter Corporation in the United States District Court for the District of Nebraska. Streck alleges that certain hematology control products sold by Beckman Coulter, Inc. and/or Coulter Corporation infringe each of six patents owned by Streck, and seeks injunctive relief, damages, attorney fees and costs. Beckman Coulter Inc., on behalf of itself and Coulter Corporation, denied liability. The trial is currently scheduled for July 2002. The Company believes that there is no reasonable basis to conclude that this litigation could lead to an outcome that would have a material adverse effect on its consolidated results of operations, financial position or liquidity.

Item 2.	Changes In Securities
	None.

Item 3.	Defaults Upon Senior Securities
	None.

Item 4.	Submission of Matters to a Vote of Security-Holders
	The annual meeting of the Stockholders of the Company (the “Annual Meeting”) was held on April 4, 2002.
	Four members of the Board of Directors whose terms expired at the 2002 Annual Meeting were elected to new terms expiring at the 2005 Annual Meeting. The number of shares voting were as follows:

	Votes For		Votes Withheld
Hugh K. Coble		52,757,388		251,494
Van B. Honeycutt		52,758,573		250,309
John P. Wareham		52,729,388		279,494
Betty Woods		52,338,526		670,356

The remaining members of the Board of Directors who will continue in office and the year in which their terms expire are:

Term Expiring in 2003: Peter B. Dervan, Ph.D., Gavin S. Herbert, and C. Roderick O’Neil.

Term Expiring in 2004: Ronald W. Dollens, Charles A. Haggerty, William N. Kelley, M.D., and Risa J. Lavizzo-Mourey, M.D.

Item 5.		Other Information
		None.
Item 6.		Exhibits and Reports on Form 8-K
	a)	Exhibits
		10.1	2002 Annual Incentive Plan (AIP)
		11.	Statement re Computation of Per Share Earnings: This information is set forth in Note 5, Net Earnings Per Share of the Condensed Consolidated Financial Statements included in Part I herein.
		15.	Independent Accountants’ Review Report, April 26, 2002
	b)	Reports on Form 8-K
		None.

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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.

	BECKMAN COULTER, INC. (Registrant)
Date: May 9, 2002	by /s/ William H. May
	William H. May Vice President, General Counsel and Secretary
Date: May 9, 2002	by /s/ Amin I. Khalifa
	Amin I. Khalifa Vice President, Finance and Chief Financial Officer

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EXHIBIT INDEX
FORM 10-Q, FIRST QUARTER, 2002

Exhibit Number	Description
10.1	2002 Annual Incentive Plan (AIP)
11.	Statement re Computation of Per Share Earnings: This information is set forth in Note 5, Earnings Per Share, of the Condensed Consolidated Financial Statements included in Part I herein.
15.	Independent Accountants’ Review Report, April 26, 2002

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