10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark one)

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

For the fiscal year ended December 31, 2008

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 0-8135

SIGMA-ALDRICH CORPORATION

(Exact name of Registrant as specified in its charter)

Delaware	43-1050617
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

3050 Spruce Street, St. Louis, Missouri	63103
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code 314-771-5765

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

Common Stock, $1.00 par value; and attached Common Share Purchase Rights	NASDAQ
(Title of Class)	(Name of Exchange on Which Registered)

Securities registered pursuant to Section 12(g) of the Act: None

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

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

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

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

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

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	¨

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

Aggregate market value of the voting stock held by non-affiliates of the registrant:

$6,664,643,294	June 30, 2008
Value	Date of Valuation

Number of shares of the Registrant’s common stock, $1.00 par value, outstanding as of January 31, 2009 was 122,130,803.

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The following documents are incorporated by reference in the Parts of Form 10-K indicated below:

Documents Incorporated by Reference	Parts of Form 10-K into which Incorporated
Pages 19-46 of the Annual Report to Shareholders for the year ended December 31, 2008	Parts I, II and IV
Proxy Statement for the 2009 Annual Meeting of Shareholders	Part III

The Index to Exhibits is located on page F-2 of this Report.

This Annual Report on Form 10-K (the “Report”) may be deemed to include or incorporate forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risk and uncertainty, including financial, business environment and projections, as well as statements that are preceded by, followed by, or that include the words “believes,” “expects,” “plans,” “anticipates,” “should” or similar expressions, and other statements contained herein regarding matters that are not historical facts. Additionally, the Report contains forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including, without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, cash flow, share repurchases, capital expenditures, acquisitions and other matters. These statements involve assumptions regarding the Company operations, investments, acquisitions and conditions in the markets the Company serves. Although the Company believes its expectations are based on reasonable assumptions, such statements are subject to risks and uncertainties, including, among others, certain economic, political and technological factors. Actual results could differ materially from those stated or implied in the Report, due to, but not limited to, such factors as (1) declining global economic conditions, (2) changes in pricing and the competitive environment and the global demand for our products, (3) fluctuations in foreign currency exchange rates, (4) changes in research funding and the success of research and development activities, (5) dependence on uninterrupted manufacturing operations (6) changes in the regulatory environment in which the Company operates (7) changes in worldwide tax rates or tax benefits from domestic and international operations, including the matters described in Note 9 – Income Taxes – to the Company’s consolidated financial statements on pages 36-37 of the 2008 Annual Report, which is incorporated herein by reference, (8) exposure to litigation including product liability claims, (9) the ability to maintain adequate quality standards, (10) reliance on third party package delivery services, (11) the impact of acquisitions and success in integrating and obtaining projected results from the acquisitions, (12) other changes in the business environment in which the Company operates, and (13) the outcome of the matters described in Note 10—Contingent Liabilities and Commitments—to the Company’s consolidated financial statements on pages 37-38 of the 2008 Annual Report, which is incorporated herein by reference. A further discussion of the Company’s risk factors can be found in Item 1A on page 8 of this Report. The Company does not undertake any obligation to update these forward-looking statements.

PART I

Item 1. Business

(a) General Development of Business

Sigma-Aldrich Corporation (“the Company”) was incorporated under the laws of the State of Delaware in May 1975. Effective July 31, 1975 (“Reorganization”), the Company succeeded, as a reporting company, Sigma International, Ltd., the predecessor of Sigma Chemical Company (“Sigma”), and Aldrich Chemical Company, Inc. (“Aldrich”), both of which had operated continuously for more than 20 years prior to the Reorganization. The Company’s principal executive offices are located at 3050 Spruce Street, St. Louis, Missouri, 63103.

On February 28, 2005, the Company completed its acquisition of all of the outstanding capital securities of JRH Biosciences Pty Ltd., CSL US Inc. and JRH Biosciences Limited, which collectively comprised the JRH Biosciences division (JRH) of CSL Limited for $366.8 million. JRH is a leading global supplier of cell culture and sera products to the biopharmaceutical industry. JRH’s product lines include sera, cell culture media used in the production of therapeutic proteins, reagent growth factors and biological material containers.

On April 1, 2005, the Company acquired the stock of the Proligo Group (Proligo), a global supplier of key genomics research tools including custom DNA, custom RNA and phosphoramidite raw materials used for DNA and RNA synthesis, from Degussa AG.

During 2006, the Company acquired four businesses with aggregate annual sales of approximately $25 million. These acquisitions provided access to several exciting new technology platforms and needed capacity for future growth for our SAFC business and the emerging market in China.

During 2007, the Company acquired two businesses with an aggregate annual sales benefit of approximately $52 million.

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(b) Financial Information About Segments

The Company operates in one segment. Information concerning sales for the Company’s business units is provided in Note 12—Company Operations by Business Unit—to the Company’s consolidated financial statements on page 40 of the 2008 Annual Report, which is incorporated herein by reference.

(c) Narrative Description of Business

The Company is a leading Life Science and High Technology company. The Company develops, manufactures, purchases and distributes the broadest range of high quality chemicals, biochemicals and equipment available throughout the world. These chemical products and kits are used in scientific research, including genomic and proteomic, biotechnology, pharmaceutical development and as key components in pharmaceutical, diagnostic and other high technology manufacturing. The Company operates in 37 countries, manufacturing 46,000 of the 100,000 chemical products it offers. The Company also offers 30,000 equipment products. The Company sells into nearly 160 countries, servicing over 88,000 accounts representing over one million individual customers.

Products

The Company has a customer-centric organizational structure featuring the Research units of Essentials, Specialties and Biotech and a Fine Chemicals unit, SAFC. This structure defines the Company’s approach to serving customers.

The Research Essentials unit sells biological buffers, cell culture reagents, biochemicals, chemicals, solvents, and other reagents and kits.

The Research Specialties unit sells organic chemicals, biochemicals, analytical reagents, chromatography and other laboratory consumables, reference materials and high-purity products.

The Research Biotech unit supplies immunochemical, molecular biology, cell signaling and neuroscience biochemicals and kits used in biotechnology, genomic, proteomic and other life science research applications.

The SAFC (Fine Chemicals) unit is a top 10 supplier of large-scale organic chemicals and biochemicals used in development and production by pharmaceutical, biotechnology, industrial, diagnostic and electronics companies.

Sales and Distribution

During 2008, products were sold to over 88,000 accounts representing over one million individual customers, including universities, pharmaceutical companies, commercial laboratories, industrial companies, non-profit organizations, governmental institutions, biotechnology, diagnostic, chemical and electronics companies and hospitals. Orders in laboratory quantities averaging approximately $400 accounted for 72%, 71% and 72% of the Company’s net sales in 2008, 2007 and 2006, respectively. The Company also makes its chemical products available in larger-scale quantities for use in manufacturing. Sales of these products accounted for 28%, 29% and 28% of net sales in 2008, 2007 and 2006, respectively.

Customers and potential customers, wherever located, are encouraged to contact the Company by telephone (“collect” or on “toll-free” WATS lines) or via its homepage on the World Wide Web (sigma-aldrich.com) for technical staff consultation or for placing orders. Information on the website does not constitute a part of this Report. Shipments are made at least five days a week from all locations. The Company strives to ship its products to customers on the same day an order is received and carries inventory levels which it believes to be appropriate to maintain this policy.

Production and Purchasing

The Company has chemical production facilities in Madison, Milwaukee and Sheboygan, Wisconsin; St. Louis, Missouri; Lenexa, Kansas; Houston, Texas; Bellefonte and Denver, Pennsylvania; Haverhill and Natick, Massachusetts; Caseyville and Urbana, Illinois; Miamisburg, Ohio; Mulberry, Florida; Carlsbad and Selma, California; Australia; Canada; France; Germany; India; Ireland; Israel; Japan; Singapore; Switzerland; Taiwan and the United Kingdom. Biochemicals are primarily produced by extraction and purification from yeast, bacteria and other naturally occurring animal and plant sources. Organic and inorganic chemicals and radiolabeled chemicals are primarily produced by synthesis. Chromatography media and columns are produced using proprietary chemical synthesis and proprietary preparation processes. Similar processes are used for filtration and sample collection processes.

There are 100,000 chemical and 30,000 equipment products listed in the Sigma, Aldrich, Fluka and Supelco catalogs. The Company produces 46,000 of the chemical products, which represented approximately 60% of sales in 2008. Products not manufactured by the Company are purchased from many sources either under contract or in the open market.

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None of the Company’s 10,000 suppliers accounted for more than 10% of the Company’s chemical or equipment purchases in 2008. The Company has generally been able to obtain adequate supplies of products and materials to meet its needs. No assurance can be given that shortages will not occur in the future.

Whether a product is produced by the Company or purchased from outside suppliers, it is subjected to quality control procedures, including the verification of purity, prior to final packaging. Quality control is performed by a staff of chemists and lab technicians utilizing highly calibrated equipment.

Patents, Trademarks and Licenses

The Company holds approximately 500 issued or pending patents, over 640 licenses and has approximately 860 registered trademarks and trademark applications worldwide. The Company’s significant trademarks are the brand names: “Sigma-Aldrich”, “Sigma,” “Aldrich,” “Fluka,” “Riedel-de Haën,” “Supelco,” “SAFC,” “SAFC Biosciences,” “SAFC Supply Solutions,” “SAFC Pharma,” “SAFC Hitech,” “Genosys,” “Proligo” and “Pharmorphix.” The brands are marketed through business units called “Research Essentials,” “Research Specialties,” “Research Biotech,” and “SAFC (Fine Chemicals).” Their related registered logos and the significant trademarks are expected to be maintained indefinitely.

The Company is aware of the desirability for patent and trademark protection for its products. The Company believes that other than its brand names, no single patent, license, trademark (or related group of patents, licenses, or trademarks) is material in relation to its business as a whole.

In addition to patents, the Company relies on trade secrets and proprietary know-how. The Company seeks protection of these trade secrets and proprietary know-how, in part, through confidentiality and proprietary information agreements. The Company makes efforts to require its employees, directors, consultants and advisors, outside scientific collaborators and sponsored researchers, other advisors and other individuals and entities to execute confidentiality agreements upon the start of employment, consulting or other contractual relationships with the Company. These agreements provide that all confidential information developed or made known to the individual or entity during the course of the relationship is to be kept confidential and not disclosed to third parties except in specific circumstances. In the case of employees and some other parties, the agreements provide that all inventions conceived by the individual will be the Company’s exclusive property. These agreements may not provide meaningful protection for or adequate remedies to protect the Company’s technology in the event of unauthorized use or disclosure of information. Furthermore, the Company’s trade secrets may otherwise become known to, or be independently developed by, its competitors.

Dependence on a Single Customer or Product

During the year ended December 31, 2008, no single customer accounted for more than 2%, and no single product accounted for more than 1% of the Company’s net sales.

Backlog

The majority of customer orders are shipped from inventory on the day ordered, resulting in limited backlog. Individual items may occasionally be out-of-stock. These items are shipped as soon as they become available. Some orders for larger scale quantities specify a future delivery date, which we exclude from our backlog calculation. At December 31, 2008, the backlog of firm orders was not significant, at less than 2% of sales. The Company anticipates that substantially all of the December 31, 2008 backlog will be shipped during 2009.

Competition

Substantial competition exists in all of the Company’s marketing and production areas. The Company believes it is a major supplier of organic chemicals and biochemicals for research and manufacturing and chromatography products for analyzing and separating complex chemical mixtures. While the Company offers 130,000 chemical and equipment items and stocks and analyzes many of these products, some of the Company’s products are unique with limited demand. There are many competitors that offer a narrower range of chemicals.

In all product areas, the Company competes primarily on the basis of customer service, product availability, quality and price. The Company’s main marketing vehicles include its website, sigma-aldrich.com, plus printed catalogs in the marketplace for the Sigma, Aldrich, Fluka and Supelco brands. These catalogs are supplemented with advertisements in chemical and other scientific journals, the mailing of special product brochures, the electronic distribution of various advertisements and product data, news releases related to new product offerings and by personal visits by management, sales and technical representatives with customers.

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Compliance With Regulations

The Company believes that it is in compliance in all material respects with federal, state and local regulations relating to the manufacture, sale and distribution of its products. The following are brief summaries of some of the federal laws and regulations which may have an impact on the Company’s business. These summaries are only illustrative of the extensive regulatory requirements of the federal, state and local governments and are not intended to provide the specific details of each law or regulation.

The Chemical Safety Information, Site Security and Fuels Regulatory Relief Act of 1999, and the regulations promulgated thereunder, regulate the handling and storage of certain flammable fuels and require an associated risk management program.

The Clean Air Act (CAA), as amended, and the regulations promulgated thereunder, regulate the emission of harmful pollutants to the air outside of the work environment. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and install control equipment for certain pollutants.

The Chemical Facility Anti-Terrorism Standard and the rules promulgated thereunder, regulate facilities that manufacture, use, store or distribute certain chemicals above a listed Screening Threshold Quantity. A potentially regulated facility had to complete and submit a Chemical Security Assessment Tool (Top-Screen) by January 19, 2008. All facilities, within 60 calendar days of coming into possession of a listed chemical at or above threshold, must also complete a Top-Screen. If a facility is determined to be regulated under this standard it must complete and submit to the DHS a Security Vulnerability Assessment and Site Security Plan. All Sigma-Aldrich sites have been reviewed for applicability and those subject to the rule filed the required information within the defined timeframes.

The Clean Water Act (CWA), as amended, and the regulations promulgated thereunder, regulate the discharge of harmful pollutants into the waters of the United States. Federal or state regulatory agencies may require companies to acquire permits, perform monitoring and to treat wastewater before discharge to the waters of the United States or a Publicly Owned Treatment Works (POTW)

The Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) and the Superfund Amendments and Reauthorization Act of 1986 (SARA), and the regulations promulgated thereunder, require notification of certain chemical spills and notification to state and local emergency response groups of the availability of Material Safety Data Sheets (MSDS’s) and the quantities of hazardous materials in the Company’s possession. SARA, and the regulations promulgated thereunder, also stresses the importance of permanent remedies and innovative treatment technologies to clean up hazardous waste sites.

The Emergency Planning & Community Right-To-Know Act of 1986 (EPCRA), as amended, and the regulations promulgated thereunder, regulate MSDS’s, chemical inventories and chemical release reporting. EPCRA also requires coordinated emergency planning with state and local agencies.

The Occupational Safety and Health Act of 1970 (OSHA), including the Hazard Communication Standard (Right to Know), and the regulations promulgated thereunder, require the labeling of hazardous substance containers, the supplying of MSDS’s on hazardous products to customers and hazardous substances to which an employee may be exposed in the workplace, the training of employees in the handling of hazardous substances and the use of the MSDS’s, along with other health and safety programs.

The Pollution Prevention Act of 1990 (PPA), as amended, and the regulations promulgated thereunder, focus on reducing the amount of pollution through cost-effective changes in production and raw materials usage. Pollution prevention also includes other practices that increase efficiency in the use of energy, water or other natural resources, and protect our resource base through conservation.

The Resource Conservation and Recovery Act of 1976 (RCRA), as amended, and the regulations promulgated thereunder, require certain procedures regarding the treatment, storage and disposal of hazardous waste.

The Toxic Substances Control Act of 1976 (TSCA), and the regulations promulgated thereunder, require reporting, testing and pre-manufacture notification procedures for certain chemicals. Exemptions are provided from some of these requirements with respect to chemicals manufactured in small quantities solely for research and development use.

The Department of Transportation (DOT) has promulgated regulations pursuant to the Hazardous Materials Transportation Act, referred to as the Hazardous Material Regulations (HMR), which set forth the requirements for hazard labeling, classification, packaging of chemicals and shipment modes for products destined for shipment in interstate commerce.

The Hazardous Materials Transportation Act (HMTA), and the regulations promulgated thereunder, seeks to protect against risks to life, property and the environment that are inherent in the transportation of hazardous materials in intrastate, interstate and foreign commerce. The Act regulates the transportation of dangerous goods via air, highway, rail and water. The Company ships and receives materials subject to this Act.

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Registration, Evaluation and Authorization of Chemicals (REACH) is new European Union (EU) Legislation covering the manufacturing and importation of chemicals that came into law in 2007. Many of the Company’s substances needed pre-registration in 2008 and subsequent registration at various levels over the next few years. Additionally, the amount of products imported or manufactured have to be monitored and more information has to be passed along the supply chain.

The United States Department of Agriculture (USDA), Animal and Plant Health Inspection Service (APHIS), Veterinary Services (VS), regulates the importation of animal-derived materials to ensure that exotic animal and poultry diseases are not introduced into the United States. The USDA has issued importation permits to several Company sites.

Approximately 3,400 products, for which sales are immaterial to the total sales of the Company, are subject to control by either the Drug Enforcement Administration (DEA) or the Nuclear Regulatory Commission (NRC). The DEA and NRC have issued licenses to several Company sites to permit importation, manufacture, research, analysis, distribution and export of certain products. The Company screens customer orders involving products regulated by the DEA and the NRC to verify that a license, if necessary, has been obtained.

Approximately 900 products, for which sales are immaterial to the total sales of the Company, are subject to licensing by the Department of Commerce (DOC). The DOC has promulgated the Export Administration Regulations pursuant to the Export Administration Act of 1979 (EAA), as amended, to regulate the export of certain products to specific destinations by requiring a special export license.

Approximately 60 products, for which sales are immaterial to the total sales of the Company, are regulated by the Centers for Disease Control (CDC). The U.S. Departments of Health and Human Services (HHS) and Agriculture (USDA) published final rules, which implement the provisions of the USA Patriot Act and Public Health Security and Bioterrorism Preparedness and Response Act of 2002 (the Bioterrorism Act), setting forth the requirements for possession, use, and transfer of select agents and toxins. The CDC has issued one site license to the Company to permit the storage and transfer of these materials.

Approximately 850 products, for which sales are immaterial to the total sales of the Company, are sold as flavoring agents regulated by the Public Health Security and the Bioterrorism Act. The Bioterrorism Act requires that the U.S. Food and Drug Administration (FDA) receive prior notice of food items imported into the United States and register facilities handling such items. The Company has registered several sites under the Bioterrorism Act to enable the importation and handling of these items.

The Company engages principally in the business of selling products that are not foods or food additives, drugs or cosmetics within the meaning of the Federal Food, Drug and Cosmetic Act, as amended (the FDC Act). However, a limited number of the Company’s products are subject to labeling, manufacturing and other provisions of the FDC Act.

The Company’s import declarations to U.S. Customs and Border Protection (CBP) represent approximately 7,000 entries and 65,000 individual transaction lines from over 75 different countries. Within the Company’s U.S. operations, imports encompass approximately 2,700 unique harmonized tariff codes. These codes are largely represented in Chapters 28, 29 and 38, representing organic and inorganic chemicals and compounds and miscellaneous chemical products. These imports are subject to the Tariff Act of 1930 (as amended), The Customs Modernization Act of 1993, and Title 19 of the Code of Federal Regulations.

Research and Development

Research and development expenses were 2.9%, 2.9% and 2.9% of sales in 2008, 2007 and 2006, respectively. The research and development expenses relate primarily to efforts to add new manufactured products. All manufactured products accounted for approximately 60% of net sales in 2008.

Number of Persons Employed

The Company had 7,925 employees as of December 31, 2008. The total number employed in the United States was 4,066 with the remaining 3,859 employed by the Company’s international subsidiaries. The Company employs over 2,400 people who have degrees in chemistry, biochemistry, engineering or other scientific disciplines, including approximately 470 with Ph.D. degrees.

(d) Financial Information About Geographic Areas and Business Units

Information concerning sales by geographic area and business unit for the years ended December 31, 2008, 2007 and 2006, is located in Note 12—Company Operations by Business Unit—to the Company’s consolidated financial statements on page 40 of the 2008 Annual Report, which is incorporated herein by reference.

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In the years ended December 31, 2008, 2007 and 2006, approximately 65%, 64% and 62%, respectively, of the Company’s net sales were to customers located outside the United States. These sales were made directly by the Company, through distributors and by subsidiaries located in 36 other countries.

(e) Available Information

The Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to reports filed pursuant to Sections 13(a) and 15(d) of the Securities Exchange Act of 1934, as amended, are available on the Company’s web site at sigma-aldrich.com as soon as reasonably practicable after being filed electronically with or furnished to the S.E.C. The information on the website does not constitute part of this Report.

(f) Executive Officers of the Registrant

The Executive Officers of the Registrant are:

Name of Executive Officer	Age	Positions and Offices Held
Gilles A. Cottier	50	President, SAFC
David R. Harvey	69	Chairman of the Board
David W. Julien	54	President, Supply Chain
Richard A. Keffer	54	Vice President, General Counsel & Secretary
Karen J. Miller	51	Vice President-Strategy & Corporate Development (formerly Controller)
Jai P. Nagarkatti	62	President and Chief Executive Officer
Douglas W. Rau	52	Vice President, Human Resources
Kirk A. Richter	62	Treasurer
Rakesh Sachdev	53	Vice President and Chief Financial Officer
David A. Smoller	46	President, Research Biotech
Carl S. Turza	50	Chief Information Officer
Gerrit J.C. van den Dool	55	Vice President, Sales
Steven G. Walton	41	Vice President, Safety & Quality
Franklin D. Wicks	55	President, Research Specialties & Research Essentials

There is no family relationship between any of the officers or directors. These officers serve at the pleasure of the Board of Directors subject to the terms of any employment or similar agreements.

Mr. Cottier has been President of the SAFC unit of the Company since January 2009. He served as President of the Research Essentials unit of the Company from July 2005 until January 2009. He served as the Vice President of Sales of the Company from 2003 to 2005.

Dr. Harvey has been Chairman of the Board of the Company since January 2001. He served as the Chief Executive Officer for more than five years until December 31, 2005 and as President of the Company for more than five years until August 2004. He is also a director of CF Industries.

Mr. Julien has been President of Supply Chain of the Company since January 2009. He served as President of the Research Specialties unit of the Company from July 2005 to January 2009. He served as President of the Biotechnology unit of the Company for more than five years until July 2005.

Mr. Keffer has been Vice President, General Counsel & Secretary of the Company since August 2006. He served as Vice President, General Counsel and Secretary with D&K Healthcare from 2004 to 2006. Previously, he was General Counsel, Secretary and Corporate Compliance Officer for Aurora Foods, Inc. from 2002 to 2003.

Ms. Miller has been Vice President-Strategy & Corporate Development of the Company since January 2009. She served as Controller of the Company for more than five years until January 2009.

Dr. Nagarkatti has been Chief Executive Officer of the Company since January 2006. He has been President of the Company since August 2004. He served as Chief Operating Officer of the Company from August 2004 until December 31, 2005. Previously he served as President of the Scientific Research unit of the Company from December 2002 to August 2004.

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Mr. Rau has been Vice President Human Resources of the Company since October 2005. He served as Vice President Human Resources of Kellwood Company from 2002 to 2005.

Mr. Richter has been Treasurer of the Company for more than five years.

Mr. Sachdev has been Vice President and Chief Financial Officer of the Company since November 2008. He served as Senior Vice President and President Asia Pacific of ArvinMeritor from March 2007 to July 2008. He served as Senior Vice President of Corporate Development and Strategy of ArvinMeritor from April 2005 through March 2007. He served as Interim Chief Financial Officer, Vice President and Controller of ArvinMeritor from August 2003 to March 2005.

Dr. Smoller has been President of the Research Biotech unit of the Company since July 2007. He served as Vice President Research & Development of the Company from June 2004 to June 2007. He served as Vice President of EMG Biosciences from August 2003 until June 2004. Previously, he served as President, CEO, and Co-Founder of ProteoPlex, Inc. from November 2001 until August 2003.

Mr. Turza has been Chief Information Officer of the Company since April 2006. He served as Chief Operating Officer for Woodwind & Brasswind from 2004 to 2006. Previously, he was Vice President of e-Business for W.W. Grainger from 2000 to 2004.

Mr. van den Dool was named Vice President of Sales of the Company in July 2007. He served as Vice President of Sales and Operations, Europe for the Company from 2003 to 2007. Previously, he served as Vice President of Sales, Europe for the Company from 1999 to 2003.

Mr. Walton has been Vice President Safety and Quality of the Company since August 2005. Previously, he served as Director of Corporate Health and Safety at ArvinMeritor from 2000 to 2005.

Dr. Wicks has been President of the Research Essentials and Specialties units of the Company since January 2009. Previously, he served as President of the SAFC unit of the Company for more than five years.

The present terms of office of the Directors will expire when the next annual meeting of the Directors is held and their successors are elected.

Item 1A. Risk Factors

Our business is subject to certain risks and uncertainties, including, among others, certain economic, political and technological factors. You should carefully consider the risk factors below, together with other matters described in this Form 10-K or incorporated herein by reference, in evaluating our business and prospects. If any one or more of the following risks occurs, our business, financial condition or operating results could be adversely impacted and the trading price of our common stock could decline. Additional risks not presently known to us or that we currently deem immaterial may also adversely impact our business, financial condition and operating results. Certain statements in this Form 10-K (including certain of the following factors) constitute forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including, without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, cash flow, share repurchases, capital expenditures, acquisitions and other matters. The Company does not undertake any obligation to update these forward-looking statements.

Risks Related to Our Sales and Operations

Our performance may be affected by the economic conditions in the U.S. and in other nations where we do business.

Declining economic conditions may have a negative impact on our consolidated results of operations, our financial condition and our cash flows. Overall demand for our products could be reduced as a direct result of a global economic recession, including such segments as the pharmaceutical, chemical and electronics industries.

We face significant competition, including changes in pricing.

The markets for our products and services are both competitive and price sensitive. Many of our competitors have significant financial, operations, sales and marketing resources and experience in research and development. Competitors could develop new technologies that compete with our products and services or even render our products obsolete. If a competitor develops superior technology or cost-effective alternatives to our products and services, our business could be seriously harmed.

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The markets for some of our products are also subject to specific competitive risks because these markets are highly price competitive. Our competitors have competed in the past by lowering prices on certain products. If they do so again, we may be forced to respond by lowering our prices. This would reduce sales and possibly profits. Failure to anticipate and respond to price competition may also impact sales and profits.

We believe that customers in our markets display a significant amount of loyalty to their supplier of a particular product. To the extent we are not the first to develop, offer and/or supply new products, customers may buy from our competitors or make materials themselves, causing our competitive position to suffer.

Our sales and results of operations are dependent on the research and development spending patterns at pharmaceutical, biotechnology and diagnostic companies.

A number of factors impact the dollars spent on the purchase of research and development products by our customers. Our pharmaceutical customers experienced a softening over the past year in all world areas. This trend was most prevalent for the Company in the second half of 2008. The Company does not have the ability to predict when this trend will reverse or the ultimate impact on demand for the Company’s products. Activities within these pharmaceutical companies, which are impacting demand, include various programs to contain costs, shift from discovery to clinical research and tighter inventory management.

The credit crisis has impacted the ability of small, emerging pharmaceutical, biotech and diagnostic companies to access funding. Venture capital funding is also showing signs of slowing. This venture capital funding also impacts discovery and clinical research spending. The extent to which demand from these customers will be impacted is unknown.

Approximately 35% of the Company’s revenues for the year ended December 31, 2008 are from the pharmaceutical, biotech and diagnostic companies.

Our sales and results of operations depend on our customers’ research and development efforts and their ability to obtain funding for these efforts.

Our customers include researchers at pharmaceutical and biotechnology companies, chemical and related companies, academic institutions, government laboratories and private foundations. Fluctuations in the research and development budgets of these researchers and their organizations could have a significant effect on the demand for our products. Our customers determine their research and development budgets based on several factors, including the need to develop new products, the availability of governmental and other funding, competition and the general availability of resources. As we continue to expand our international operations, we expect research and development spending levels in markets outside of the U.S. will become increasingly important to us.

Research and development budgets fluctuate due to changes in available resources, spending priorities, general economic conditions, institutional and governmental budgetary limitations and mergers of pharmaceutical and biotechnology companies. Our business could be seriously harmed by any significant decrease in life science and high technology research and development expenditures by our customers. In particular, a small portion of our sales have been to researchers whose funding is dependent on grants from government agencies such as the U. S. National Institute of Health, the National Science Foundation, the National Cancer Institute and similar agencies or organizations. Government funding of research and development is subject to the political process, which is often unpredictable. Other programs, such as Homeland Security or defense, or general efforts to reduce the U.S. federal budget deficit could be viewed by the government as a higher priority. Any shift away from funding of life science and high technology research and development or delays surrounding the approval of governmental budget proposals may cause our customers to delay or forego purchases of our products and services, which could seriously damage our business.

Some of our customers receive funds from approved grants at a particular time of year, many times set by government budget cycles. In the past, such grants have been frozen for extended periods or have otherwise become unavailable to various institutions without advance notice. The timing of the receipt of grant funds may affect the timing of purchase decisions by our customers and, as a result, cause fluctuations in our sales and operating results.

Due to heavy reliance on manufacturing and related operations to produce, package and distribute the products we sell, our business could be adversely affected by disruptions of these operations.

We rely upon our manufacturing operations to produce approximately 60% of our sales. Our quality control, packaging and distribution operations support all sales. Any significant disruption of those operations for any reason, such as labor unrest, power interruptions, fire, or other events beyond our control could adversely affect our sales and customer relationships and therefore adversely affect our business. While insurance coverage may reimburse us, in whole or in part, for profits lost from such disruptions, our ability to provide these products in the longer term may affect our sales growth expectations and results.

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We are subject to regulation by various federal, state and foreign agencies that require us to comply with a wide variety of regulations, including those regarding the manufacture of products, the distribution of our products and environmental matters.

Some of our operations are subject to regulation by various U.S. federal agencies and similar state and international agencies, including the U. S. Department of Commerce, U.S. Food and Drug Administration, the U.S. Department of Transportation, the U.S. Department of Agriculture and other comparable state and international agencies. These regulations govern a wide variety of product activities, from design and development to labeling, manufacturing, handling, sales and distribution of products. If we fail to comply with any or all of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales.

We are subject to regulations that govern the handling of hazardous substances.

We are subject to various federal, state, local and international laws and regulations that govern the handling, transportation, manufacture, use and sale of substances that are or could be classified as toxic or hazardous substances. Some risk of environmental damage is inherent in our operations and the products we manufacture, sell or distribute. Any failure by us to comply with the applicable government regulations could also result in product recalls or impositions of fines and restrictions on our ability to carry on with or expand in a portion or possibly all of our operations. If we fail to comply with any or all of these regulations, we may be subject to fines or penalties, have to recall products and/or cease their manufacture and distribution, which would increase our costs and reduce our sales.

Changes in worldwide tax rates or tax benefits will impact our tax expense and our profits.

We are subject to a variety of taxes in numerous local, regional, national and international jurisdictions. The laws regulating the taxes which we are subject to may change. We have no control over these changes and their impact, if any, on our results. Additionally, results of tax audit activity may also impact our tax provision and our profits. We reflect changes in our actual or forecast income tax rates as relevant facts and circumstances are known to us. Variations to our forecast tax rate and forecast diluted EPS in the future are possible due in part to tax rate changes and changes in the status of tax uncertainties pursuant to Financial Accounting Standards Board (“FASB”) Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,” (FIN 48).

Litigation may harm our business.

Substantial, complex or extended litigation could cause us to incur significant costs and distract our management. For example, lawsuits by employees, stockholders, collaborators, distributors, customers, or competitors or others with protected intellectual property could be very costly and substantially disrupt our business. Disputes from time to time with such companies, organizations or individuals are not uncommon, and we cannot assure you that we will always be able to resolve such disputes or on terms favorable to us. For example, we are currently defending a class action complaint related to an explosion at one of our production facilities. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, therefore impacting profits.

Potential product liability claims could affect our earnings and financial condition and harm our reputation.

We face potential liability claims based on our products and/or services. We carry product liability insurance coverage, generally available in the market, but which is limited in scope and amount. Our products are generally to be used by trained scientists and operators, however, there is no assurance that they will be used in accordance with our terms and conditions of sale. As a result, we could be held liable in connection with these products or services. For example, we are defending a large number of lawsuits relating to various vaccines manufactured at pharmaceutical companies, for which we provided a product for use in research activities in developing such vaccines.

Although we seek to reduce our potential liability through measures such as contractual indemnification provisions with customers and/or suppliers, we cannot assure you that such measures will be enforced or effective. We could be materially and adversely affected if we were required to pay damages or incur defense costs in connection with a claim that is outside the scope of the indemnification agreements, if the indemnity, although applicable, is not executed in accordance with its terms or if our liability exceeds the amount of applicable insurance or indemnification. There can be no assurance that our insurance coverage will be adequate or that insurance coverage will continue to be available on terms acceptable to us. Unexpected results could cause us to have financial exposure in these matters in excess of recorded reserves and insurance coverage, requiring us to provide additional reserves to address these liabilities, impacting profits.

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If we fail to maintain adequate quality standards for our products and services, our business may be adversely affected and our reputation harmed.

Our life science and high technology customers are often subject to rigorous quality standards to obtain and maintain regulatory approval of their products and the manufacturing processes that generate them. A failure to maintain, or in some instances, upgrade our quality standards to meet our customers’ needs, could result in the loss of a customer’s regulatory license and potentially substantial sales losses to us.

We heavily rely on third party air cargo carriers and other package delivery services, and a significant disruption in these services or significant increases in prices may disrupt our ability to ship products or import materials, increase our costs and lower our profitability and harm our reputation.

We emphasize our prompt service and shipment of products as a key element of our sales and marketing strategy. We ship a significant number of products to our customers through independent package delivery companies. In addition, we transport materials between our worldwide facilities and import raw materials from worldwide sources. Consequently, we heavily rely on air cargo carriers and other third party package delivery providers. If any of our key third party providers were to experience a significant disruption such that any of our products, components or raw materials could not be delivered in a timely fashion or we would incur additional costs that we could not pass on to our customers, our costs may increase and our relationships with certain customers may be adversely affected. In addition, if these third party providers increase prices, and we are not able to find comparable alternatives or make adjustments to our selling prices, our profitability could be adversely affected.

If we fail to attract and retain key personnel, our business could be adversely affected.

Most of our products and services are highly technical in nature. In general, only highly qualified and trained scientists have the necessary skills to develop and market our products and provide our services. In addition, some of our manufacturing, quality control, safety and compliance, information technology, sales, and e-commerce related positions are highly technical as well. Our success depends in large part upon our ability to identify, hire, retain and motivate highly skilled professionals. We face intense competition for these professionals from our competitors, customers, marketing partners and other companies throughout the industries in which we compete. Any failure on our part to hire, train, and retain a sufficient number of qualified professionals would seriously damage our business.

We depend heavily on the services of our senior management. We believe that our future success depends on the continued services of such management. Our business may be harmed by the loss of a significant number of our senior management members in a short period of time.

If the expected benefit of our supply chain initiative is not realized, our future profitability may be adversely affected.

During the third quarter of 2007, we implemented an initiative to improve how we procure goods and services, manage inventory and execute other supply chain activities that are key to our customer centric approach. The purpose of this initiative is to reduce our overall manufacturing and procurement costs and expand margins over the next five years. Due to the scope and complexity of this initiative there are certain risks associated with its implementation. If unexpected costs or delays are encountered, our margins may not benefit as much or as quickly as we had anticipated. The global economic slow down and the cost of energy could also impact the savings which will be achieved.

Our business may be adversely affected by a decrease in the availability of commercial paper.

We had $378.7 million of commercial paper outstanding at December 31, 2008. If, as a result of the global economic crisis, the market for commercial paper becomes restricted or unavailable, our business could be adversely affected including our consolidated results of operations, our financial condition and our cash flows.

Our sales and operating results may vary from period to period.

Our sales and operating results may vary significantly from quarter to quarter and from year to year, depending on a variety of factors including:

• competitive conditions,

• exchange rate fluctuations,

• changes in tax laws, the results of tax audits or the measurement of tax uncertainties,

• the level and timing of our customers’ research and development and manufacturing efforts and activities,

• the timing of our customers’ government funding,

• the timing of our research and development, sales and marketing expenses,

• the timing of significant custom sales orders, typically associated with our SAFC and Research Biotech businesses,

• the expected higher level of sales growth in SAFC creating downward pressure on overall gross margins,

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• the introduction of new products by us or our competitors,

• the success of identifying, acquiring and integrating businesses that complement our product offering, add new technologies or add presence in a market,

• customer demand for our products due to changes in purchasing requirements and research needs, and

• general economic conditions.

Our expense levels are based in part on our future sales expectations. Consequently, sales or profits may vary significantly from quarter to quarter or from year to year, and sales and profits in any interim period may not necessarily be indicative of results in subsequent periods.

If we experience a significant disruption in our information technology systems or if we fail to implement new systems and software successfully, our business could be adversely affected.

We depend on information systems throughout our Company to control our manufacturing processes, process orders, manage inventory, process and bill shipments to and collect cash from our customers, respond to customer inquiries, contribute to our overall internal control processes, maintain records of our property, plant and equipment, and record and pay amounts due vendors and other creditors. Additionally, approximately 42% of the Company’s research sales originated through e-commerce. If we were to experience a prolonged disruption in our information systems that involve interactions with customers and suppliers, it could result in the loss of sales and customers and/or increased costs, which could adversely affect our business.

Technology innovations in the markets that we serve may create alternatives to our products and result in reduced sales.

Technology innovations, which our current and potential customers might have access to, could reduce or eliminate their need for our products. A new, competing or other disruptive technology that reduces or eliminates the use of one or more of our products could negatively impact the sale of those products. Our customers also constantly attempt to reduce their manufacturing costs and improve product quality. We may be unable to respond on a timely basis to any or all of the changing needs of our customer base. Our failure to develop, introduce or enhance products able to compete with new technologies in a timely manner could have an adverse effect on our business, results of operations and financial condition.

Demand for our products and services is subject to the commercial success of our customers’ products, which may vary for reasons outside our control.

Even if we are successful in securing utilization of our products in a customer’s manufacturing process, sales of many of our products and services remain dependent on the timing and volume of the customer’s production, over which we have no control. The demand for our products depends on regulatory approvals and frequently depends on the commercial success of the customer’s supported product. Regulatory processes are complex, lengthy, expensive and can often take years to complete. Commercial success of a customer’s product, which would drive demand in their production and commensurate demand for our products and services, is dependent on many factors, some of which can change rapidly, despite early positive indications.

Rapid changes in the healthcare industry could directly or indirectly adversely affect our business.

The healthcare industry has undergone significant changes in an effort to control costs. These changes include:

• development of large and sophisticated group purchasing organizations,

• healthcare reform legislation,

• consolidation of pharmaceutical companies,

• increased outsourcing of certain activities, including to low-cost offshore locations,

• lower reimbursements for research and development, and

• legislative limitations on healthcare research.

We expect the healthcare industry to continue to change in the future. Some of these potential changes, such as a reduction in governmental support of healthcare services or adverse changes in legislation or regulations governing the ability to perform healthcare related research and the delivery or pricing of healthcare services or mandated benefits, may cause healthcare industry customers to purchase fewer of our products and services or to reduce the prices they are willing to pay for our products or services.

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Our strategic equity investments may result in losses.

We have made and expect to continue to make strategic equity investments in complementary businesses and technology. We regularly review the carrying value of these investments for impairment, considering factors such as the current stock price, book values from recent financial statements and forecasts and expectations of the investee. The results of these evaluations may fluctuate due to market conditions and other conditions over which we have no control. Estimating the fair value of non-public equity investments in life science or high technology companies is inherently subjective. If actual events differ from our assumptions and other than temporary unfavorable fluctuations in the valuations of the investments are indicated, it could require a reduction in the value of the investment. This could materially impact our results of operations. Realization of any benefit from these strategic investments is uncertain.

We may be unable to establish and to maintain collaborative development and marketing relationships with business partners, which could result in a decline in sales or slower than anticipated growth rates.

As a part of our business strategy, we have formed, and intend to continue to form, strategic alliances and distribution arrangements with partners relating to the development and commercialization of certain of our existing and potential products to increase our sales and to leverage our product and service offerings. Our success will depend, in part, on our ability to maintain these relationships and to cultivate additional, acceptable, strategic alliances with such companies.

In addition, we cannot ensure that parties with which we have established, or will establish, collaborative relationships will not, either directly or in collaboration with others, pursue alternative technologies or develop alternative products in addition to, or instead of, products offered as a result of these collaborations. Our business partners may also experience financial or other difficulties that lessen their value to us and to our customers. Our results of operations and opportunities for growth may be adversely affected by our failure to establish and maintain successful collaborative relationships.

Lack of early success with our pharmaceutical and biotechnology customers can shut us out of future business with those customers.

A number of the products we sell to pharmaceutical and biotechnology customers are incorporated into the customers’ drug manufacturing processes. In some cases, once a customer chooses a particular product for use in a drug manufacturing process, it is unlikely that the customer will later switch to a competing alternative. In many cases, the regulatory license for the product will specify the products qualified for use in the process. Obtaining the regulatory approvals needed for a change in the manufacturing process is time consuming, expensive and uncertain. Accordingly, if a pharmaceutical or biotechnology customer does not select our products early in its manufacturing design phase for any number of reasons, including, but not limited to, cost, ease of use, ability to supply large quantities or similar reasons, we may lose the opportunity to participate in the customer’s manufacturing of such product. Because we face competition in this market from other companies, we run the risk that our competitors could win significant early business with a customer making it difficult for us to recover that late stage commercialization opportunity.

Disruption in our distribution capability could adversely affect our business and operations.

We have an automated warehouse in Germany, which handles a significant amount of our international distribution in our global supply chain. The efficiency and effectiveness of our global distribution network would be significantly compromised if this warehouse was impacted by a natural disaster or other local disruption. If a disruption occurs, we may not be able to secure alternate distribution and replace the compromised inventory in a timely manner, causing a deterioration in our current service levels. Failure to do so could have a material adverse effect on our business and results of operations.

We have significant inventories on hand.

We maintain significant inventories and have an allowance for slow-moving and obsolete inventory. Any significant unanticipated changes in future product demand or market conditions, including the current uncertainty in the global market, could also have an impact on the value of inventory and adversely impact our results of operations. Additionally, if it would become necessary to rework product to make it saleable, this additional effort would impact the cost and impact our operating results.

Fluctuation in the price and supply of raw fetal bovine serum could affect our business.

The supply of raw fetal bovine serum (FBS) is sometimes limited because serum collections tend to be cyclical. In addition, any discovery of bovine spongiform encephalopathy (popularly referred to as “mad cow disease”), particularly in Australia, may

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cause an interruption to our primary supply of FBS. These factors can cause the price of raw FBS to fluctuate. The profit margins we achieve on finished FBS have been unstable in the past because of the fluctuations in the price of raw FBS, and any increase in the price could adversely affect those profit margins in the short-term. In addition, if we are unable to obtain an adequate supply of FBS, or if we are unable to meet demand for FBS from our suppliers, we may lose market share.

We expect to continue to implement various process improvement initiatives that may not achieve the desired results.

We have implemented a number of changes designed to improve operating efficiencies and reduce costs. We expect to continue to identify opportunities for operational efficiencies and cost reduction and implement changes to achieve these efficiencies. Such improvements may lead to, among other things, the consolidation and integration of products, brands, facilities, functions, systems and processes, any or all of which might present significant management challenges. There can be no assurance that such actions will be accomplished as rapidly as anticipated or that the full extent of expected cost reductions will be achieved.

Risks Related to Growth of Our Business

Acquisitions are an important part of our growth strategy.

We have acquired or invested in several businesses and technologies and routinely review additional opportunities. Certain risks exist including the potential for:

• the acquisition or investment failing to provide the benefits originally anticipated by our management,

• difficulties in integrating the operations and systems of the acquired businesses and in realizing operating synergies,

• difficulties in assimilating and retaining employees and customers of the acquired companies,

• management’s attention being diverted to the integration of the acquired businesses or acceptance of the acquired technology, and

• unanticipated contract or regulatory issues.

None of these difficulties have been historically significant, but if they were to be in the future, we may be unable to achieve expectations from our acquisition strategy. In addition, we compete with other companies for suitable acquisition targets and may not be able to acquire certain targets that we seek. Also, certain businesses we have acquired or invested in may not generate the cash flow and/or earnings or other benefits that we anticipated at the time of their acquisition. If we are unable to successfully complete and integrate acquisitions in a timely manner, acquisitions may adversely affect our profitability. In addition, if we are unable to hire and retain key management personnel, we may not be able to execute our acquisition strategy.

We must continually offer new products and technologies.

Our success depends in large part on continuous and timely development and introduction of new products that address evolving customer needs and changes in the market. We also believe that because of the initial time investment required by our customers to reach a purchasing decision for a new product, it may be difficult to regain that customer once the customer purchases a product from a competitor.

These facts have led us to focus significant efforts and resources on the development and identification of new technologies and products. As a result, we have a very broad product line and are continually seeking to develop, license or acquire new technologies and products to further broaden our offering. If we fail to achieve that, our customers will likely purchase products from our competitors, significantly harming our business. Once we develop or obtain a technology, to the extent that we fail to timely introduce new and innovative products that are accepted by our markets, we could fail to obtain an adequate return on our research and development, licensing and acquisition investments and could lose market share to our competitors, which would be difficult or impossible to regain and could seriously damage our business. Some of the factors affecting market acceptance of our products include:

• availability, quality and price as compared to competitive products,

• the functionality of new and existing products,

• the timing of introduction of our products compared to competitive products,

• scientists’ opinions of the product’s utility and our ability to incorporate their feedback into future products,

• citation of the products in published research, and

• general trends in life sciences research.

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Risks Related to International Operations

Foreign currency exchange rate fluctuations may adversely affect our business.

Since we are a multinational corporation that sells and sources products in many different countries, changes in exchange rates have in the past, and could in the future, adversely affect our cash flows and results of operations. For example, the effect of translating foreign currency sales into U.S. dollars increased the 2008, 2007, and 2006 sales growth by 2.7%, 4.8% and 0.4%, respectively. Furthermore, reported sales and purchases made and expenses incurred in non-U.S. currencies by our international businesses, when translated into U.S. dollars for financial reporting purposes, fluctuate due to exchange rate movement. Due to the number of currencies involved, the variability of currency exposures and the potential volatility of currency exchange rates, we cannot predict the effect of exchange rate fluctuations on future sales and operating results.

We are subject to economic, political and other risks associated with our significant international business, which could adversely affect our financial results.

We operate internationally primarily through wholly-owned subsidiaries located in North and South America, Europe, the Far East, the Middle East, Australia and Africa. Sales outside the United States were in excess of 60% of total sales in 2008. We expect that sales from international operations will continue to represent a growing portion of our sales. During 2008, approximately 10% of the Company’s United States operations’ chemical and equipment purchases were from international suppliers. In addition, many of our manufacturing facilities, employees and suppliers to our international operations are located outside the United States. Our sales and earnings could be adversely affected by a variety of factors resulting from our international operations, including:

• future fluctuations in exchange rates,

• complex regulatory requirements and changes in those requirements,

• trade protection measures, tariff, royalties or taxes, and import or export licensing requirements or restrictions,

• multiple jurisdictions and differing tax laws, as well as changes in those laws,

• restrictions on our ability to repatriate investments and earnings from foreign operations,

• changes in the political or economic conditions in a country or region, particularly in developing or emerging markets,

• difficulty in staffing and managing worldwide operations,

• changes in shipping costs, and

• difficulties in collecting on accounts receivable.

If any of these risks materialize, we could face the loss of sales, and/or substantial increases in costs, which could adversely affect our results of operations.

Risks Related to Intellectual Property

We may become involved in disputes regarding our patents and other intellectual property rights, which could result in prohibition of the use of certain technology in current or planned products, exposure of the business to significant liability and diversion of management’s focus.

We and our major competitors spend substantial time and resources developing and patenting new and improved products and technologies. Many of our products are based on complex, rapidly developing technologies. Further, while we make every effort to respect others’ intellectual property, we may not have identified each and every instance where our products may infringe or utilize intellectual property rights held by others. Thus, we cannot provide assurance that others will not claim that we are infringing their intellectual property rights or that we do not in fact infringe those rights.

We have been and may in the future be sued by third parties alleging that we are infringing upon their intellectual property rights. Any claims, with or without merit, could:

• be expensive,

• take significant time and divert management’s focus from other business concerns,

• if successful, require us to stop the infringing activity, redesign our product or process or license the intellectual property in question, thereby resulting in delays and loss or deferral of sales,

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• require us to pay substantial damage awards, and/or

• require us to enter into royalty or licensing agreements which may not be available on acceptable terms, if at all.

If we are unable to obtain a royalty agreement or license on acceptable terms, or are unable to redesign to avoid conflicts with any third party patent, we may be unable to offer some of our products, which could result in reduced sales.

Our failure to protect our intellectual property may significantly harm our results of operations.

Our success and ability to compete is dependent in part on our ability to protect and maintain our proprietary rights to our intellectual property, particularly trade secrets and proprietary know-how. We generally enter into confidentiality and proprietary information agreements with our employees, consultants and advisors. These agreements may not provide meaningful protection for or adequate remedies to protect the Company’s technology in the event of unauthorized use or disclosure of information. Efforts to address any infringement of our proprietary rights could result in significant litigation costs, and any failure to adequately protect our proprietary rights could result in our competitors offering similar services, potentially resulting in the loss of one or more competitive advantages and decreased sales.

Despite efforts to protect our proprietary rights, existing trade secret, copyright, patent and trademark laws afford us only limited protection. Others may attempt to copy or reengineer aspects of our products or obtain and use information that we regard as proprietary. Accordingly, we may not be able to prevent misappropriation of our products or to deter others from developing similar products. Further, monitoring the unauthorized use of our products and other proprietary rights is difficult. Litigation may be necessary to enforce our intellectual property rights or to determine the validity and scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of resources and could significantly harm our results of operations and reputation.

We may incur impairment charges on our goodwill and other intangible assets with indefinite lives that would reduce our earnings.

We are subject to Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,”(SFAS 142) which requires that goodwill and other intangible assets that have an indefinite life be tested at least annually for impairment. Goodwill and other intangible assets with indefinite lives must also be tested for impairment between the annual tests if a triggering event occurs that would likely reduce the fair value of the asset below its carrying amount. As of December 31, 2008, goodwill and other intangible assets with indefinite lives represented approximately 15% of our total assets. If we determine that there has been an impairment, our financial results for the relevant period would be reduced by the amount of the impairment, net of tax effects, if any.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The following table shows the location, land area, building area and function of the properties the Company owns or leases at December 31, 2008.

Country	Land Area (Acres)	Building Area (Sq. Ft) (in thousands)	Function
United States	1,641	4,177	admin., production, warehousing, distrib.
Germany	46	646	admin., production, warehousing, distrib.
Switzerland	13	422	admin., production, warehousing, distrib.
United Kingdom	251	452	admin., production, warehousing, distrib.
Israel	6	132	admin., production, warehousing, distrib.
All Other	62	885	admin., production, warehousing, distrib.
Total	2,019	6,714
Percent Owned Property	81%
Percent Leased Property	19%

The Company considers the properties to be well maintained, in sound condition and repair, and adequate for its present needs. The Company expects to continue to expand its production, warehousing and distribution capabilities in selected markets.

On average during 2008, the Company used approximately 65% of its manufacturing capacity and expects to increase the utilization of its plants in the future while continuing to make capital investments in plants to support specific business opportunities.

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Item 3. Legal Proceedings

The information contained in Note 10 - Contingent Liabilities and Commitments - on pages 37-38 of the 2008 Annual Report is incorporated herein by reference.

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted by the Company to the stockholders for a vote during the fourth quarter of 2008.

PART II

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

Information concerning the market price of the Company’s Common Stock and related shareholder information for the years ended December 31, 2008 and 2007 is located on page 19 of the 2008 Annual Report under the caption “Common Stock Data,” which is incorporated herein by reference.

See Item 12 for information concerning securities authorized for issuance under equity compensation plans.

The following table represents share repurchases by the Company for the year ended December 31, 2008 (in millions except per share amounts):

Issuer Purchases of Equity Securities

Period	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
Total at Dec. 31, 2007		$		84.0	6.0
Jan. 1, 2008 – Jan. 31, 2008	—		—	84.0	6.0
Feb. 1, 2008 – Feb. 29, 2008	0.7	$	54.25	84.7	5.3
Mar. 1, 2008 – Mar. 31, 2008	0.2	$	54.99	84.9	5.1
Apr. 1, 2008 – Apr. 30, 2008	—		—	84.9	5.1
May 1, 2008 – May 31, 2008	2.8	$	58.58	87.7	2.3
Jun. 1, 2008 – Jun. 30, 2008	0.3	$	57.87	88.0	2.0
Jul. 1, 2008 – Jul. 31, 2008	0.5	$	60.17	88.5	1.5
Aug. 1, 2008 – Aug. 31, 2008	0.5	$	60.81	89.0	1.0
Sep. 1, 2008 – Sep. 30, 2008	—		—	89.0	1.0
Oct. 1, 2008 – Oct. 31, 2008	2.9	$	38.75	91.9	8.1
Nov. 1, 2008 – Nov. 30, 2008	0.4	$	44.45	92.3	7.7
Dec. 1, 2008 – Dec. 31, 2008	—	$	—	92.3	7.7
Total at Dec. 31, 2008	8.3	$	50.74	92.3	7.7

On November 14, 2006, the Board of Directors authorized a two-for-one stock split effected in the form of a 100 percent stock dividend to shareholders of record on December 15, 2006. Shareholders of record received an additional share on January 2, 2007 for each share they owned. The par value of the Company’s common stock remains $1.00 per share. Except as otherwise noted, all share and per share information presented herein has been retroactively adjusted to reflect the common stock split.

On October 20, 2008 the Board of Directors authorized the repurchase of up to an additional 10 million shares, to be available for purchase within the next three years, bringing the total repurchase authorization to 100 million shares. The timing of these future repurchases, if any, will depend on market conditions and other factors.

Items 6 through 8. Selected Financial Data, Management’s Discussion and Analysis of Financial Condition and Results of Operations, Quantitative and Qualitative Disclosures about Market Risk and Financial Statements and Supplementary Data

The information required by Items 6 through 8 is incorporated herein by reference to pages 19–46 of the 2008 Annual Report. See Index to Financial Statements on page F-1 of this Report. Those pages of the Company’s 2008 Annual Report listed in the Index or referred to in Items 1 through 4 are incorporated herein by reference.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

None

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Item 9A. Controls and Procedures

Controls and Procedures

The Company’s management, under the supervision and with the participation of the Company’s Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as of December 31, 2008. Based upon their evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)) are effective as of that date to provide reasonable assurance that the information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. They have also determined in their evaluation that there was no change in the Company’s internal controls over financial reporting during the quarter ended December 31, 2008 that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm

The information contained in Management’s Report on Internal Control over Financial Reporting and Report of Independent Registered Public Accounting Firm on page 46 of the 2008 Annual Report is incorporated herein by reference.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information under the captions “Nominees for Board of Directors” and “Section 16(a) Beneficial Ownership Reporting Compliance” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

Audit Committee Financial Expert

Information under the caption “Audit Committee” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

Code of Ethics

The Company has a Code of Ethics applicable to the principal executive officer, principal financial officer and principal accounting officer of the Company. A copy of the Code of Ethics is available on our website at sigma-aldrich.com or may be obtained without charge by writing to the Secretary, Sigma-Aldrich Corporation, P.O. Box 14508, St. Louis, Missouri 63178. The content on our website does not constitute part of this Report.

Item 11. Executive Compensation

Information under the captions “Director Compensation and Transactions” and “Information Concerning Executive Compensation” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

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

Information under the captions “Security Ownership of Directors, Executive Officers and Principal Beneficial Owners”, “Information Concerning Executive Compensation” and “Equity Compensation Plan Information” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions and Director Independence

Information, if any, under the captions “Director Compensation and Transactions,” “Principal Beneficial Owners and Transactions” and “Related Party Disclosure” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

- 18 -

Item 14. Principal Accountant Fees and Services

Information under the caption “Audit Firm Fee Summary” of the 2009 Proxy Statement, which will be filed within 120 days after December 31, 2008, is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Documents Filed as Part of this Report

1. Financial Statements

See Index to Financial Statements on page F-1 of this Report. Those pages of the Company’s 2008 Annual Report listed in such Index are hereby incorporated by reference.

2. Financial Statement Schedules.

All schedules are omitted as they are not applicable, not required or the information is included in the consolidated financial statements or related notes to the consolidated financial statements.

3. Exhibits

See Index to Exhibits on page F-2 of this Report.

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SIGNATURES

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

SIGMA-ALDRICH CORPORATION (Registrant)
By	/s/    Karen J. Miller	February 27, 2009
	Karen J. Miller, Vice President-Strategy & Corporate Development (formerly Controller)	Date

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

By	/s/    Jai P. Nagarkatti	February 27, 2009
	Jai P. Nagarkatti, President and Chief Executive Officer (Principal Executive Officer)	Date
By	/s/    Karen J. Miller	February 27, 2009
	Karen J. Miller, Vice President-Strategy& Corporate Development (formerly Controller) (Principal Accounting Officer)	Date
By	/s/    Rakesh Sachdev	February 27, 2009
	Rakesh Sachdev, Vice President and Chief Financial Officer (Principal Financial Officer)	Date
By	/s/    David R. Harvey	February 27, 2009
	David R. Harvey, Chairman of the Board	Date
By	/s/    Rebecca M. Bergman	February 27, 2009
	Rebecca M. Bergman, Director	Date
By	/s/    W. Lee McCollum	February 27, 2009
	W. Lee McCollum, Director	Date
By
	Avi M. Nash, Director	Date
By	/s/    Steven M. Paul	February 27, 2009
	Steven M. Paul, Director	Date
By
	J. Pedro Reinhard, Director	Date
By	/s/    Timothy R.G. Sear	February 27, 2009
	Timothy R.G. Sear, Director	Date
By	/s/    D. Dean Spatz	February 27, 2009
	D. Dean Spatz, Director	Date
By	/s/    Barrett A. Toan	February 27, 2009
	Barrett A. Toan, Director	Date

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SIGMA-ALDRICH CORPORATION AND SUBSIDIARIES

INDEX TO FINANCIAL STATEMENTS AND RELATED INFORMATION

	Page Number Reference Annual Report to Shareholders (Filed as Exhibit 13 Hereto)
Selected financial data, including Common Stock Data and related stockholder information, Annual Financial Data for the five years ended December 31, 2008 and Quarterly Financial Data for the quarterly periods in 2008 and 2007	19
Management’s Discussion and Analysis	21-27
Market risk disclosure	27
FINANCIAL STATEMENTS:
Consolidated Balance Sheets December 31, 2008 and 2007	29
Consolidated statements for the years ended December 31, 2008, 2007 and 2006
Income	28
Stockholders’ Equity	30
Cash Flows	31
Notes to consolidated financial statements	32-45
Management’s report on internal control over financial reporting	46
Report of independent registered public accounting firm	46

F - 1

INDEX TO EXHIBITS

These Exhibits are numbered in accordance with the Exhibit Table of Item 601 of Regulation S-K:

Exhibits
2.1	Purchase and Sale Agreement, dated as of January 18, 2005, by and among CSL Limited, CSL International Pty Ltd., and CSL UK Holdings Limited. — Incorporated by reference to Exhibit 2.1 of Form 8-K filed March 1, 2005, Commission File Number 0-8135.
3      (a)	Certificate of Incorporation and Amendments — Incorporated by reference to Exhibit 3(a) of Form 10-Q filed for the quarter ended June 30, 2004, Commission File Number 0-8135.
(b)	By-Laws, as amended — Incorporated by reference to Exhibit 3(b) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
4	Instruments Defining the Rights of Shareholders, Including Indentures:
(a)	Certificate of Incorporation and Amendments See Exhibit 3(a) above.
(b)	By-Laws, as amended November 14, 2006 See Exhibit 3(b) above.
(c)	Rights Agreement, dated as of August 8, 2000 between Sigma-Aldrich Corporation and Computershare Investor Services, LLC, as Rights Agent, which includes the form of Right Certificate as Exhibit A and the Summary of Common Stock Purchase Rights as Exhibit B. — Incorporated by reference to Exhibit 1 of Form 8-A12(g) filed on August 10, 2000, Commission File number 0-8135.
(d)	The Company agrees to furnish to the Securities and Exchange Commission upon request pursuant to Item 601(b)(4)(iii) of Regulation S-K copies of any instruments defining the rights of holders of long-term debt of the Company and its consolidated subsidiaries where such instrument has not been filed as an exhibit hereto and the total amount of securities authorized thereunder does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis.
10	Material Contracts:
(a)	Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(d) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135.
(b)	First Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(e) of Form 10-K filed for the year ended December 31, 1992, Commission File Number 0-8135.
(c)	Second Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(f) of Form 10-K filed for the year ended December 31, 1994, Commission File Number 0-8135.
(d)	Third Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(e) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(e)	Fourth Amendment to Share Option Plan of 1987* — Incorporated by reference to Exhibit 10(f) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(f)	Employment Agreement with Chairman of the Board David R. Harvey effective January 1, 2006* — Incorporated by reference to Exhibit 10.1 of Form 8-K filed January 19, 2006, Commission File Number 0-8135.
(g)	Amendment to the Employment Agreement effective as of May 4, 2007 by and between the Sigma-Aldrich Corporation and David R. Harvey. * Incorporated by reference to Exhibit 10.1 of Form 8-K filed May 4, 2007, Commission File Number 0-8135.
(h)	Amendment to the Employment Agreement effective as of May 6, 2008 by and between the Sigma-Aldrich Corporation and David R. Harvey. * Incorporated by reference to Exhibit 10.1 of Form 8-K filed May 8, 2008, Commission File Number 0-8135.
(i)	Share Option Plan of 1995* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy statement filed March 30, 1995, Commission File Number 0-8135.
(j)	First Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(i) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(k)	Second Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(j) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(l)	Third Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(k) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.

F - 2

(m)	Fourth Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(l) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(n)	Fifth Amendment to Share Option Plan of 1995* — Incorporated by reference to Exhibit 10(m) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(o)	Directors’ Nonqualified Share Option Plan of 1998* — Incorporated by reference to Exhibit A of the Company’s Definitive Proxy Statement filed March 27, 1998, Commission File Number 0-8135.
(p)	First Amendment to Directors’ Nonqualified Share Option Plan of 1998* — Incorporated by reference to Exhibit 10(o) of Form 10-K filed for the year ended December 31, 2000, Commission File Number 0-8135.
(q)	Share Option Plan of 2000* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed March 30, 2000, Commission File Number 0-8135.
(r)	Form of Employment Agreement (Similar Employment Agreements also exist with Gilles A. Cottier, David W. Julien, Richard A. Keffer, Karen J. Miller, Douglas W. Rau, Kirk A. Richter, David A. Smoller, Carl S. Turza, Gerrit J.C. van den Dool, Steven G. Walton and Franklin D. Wicks)* — Incorporated by reference to Exhibit 10(p) of Form 10-K filed March 14, 2006, Commission File Number 0-8135.
(s)	Form of Change in Control Agreement (Similar Employment Agreements also exist with Gilles A. Cottier, David W. Julien, Richard A. Keffer, Karen J. Miller, Jai Nagarkatti, Douglas W. Rau, Rakesh Sachdev, David A. Smoller, Carl S. Turza, Gerrit J.C. van den Dool and Franklin D. Wicks)* — Incorporated by reference to Exhibit 10(a) of Form 8-K filed December 31, 2008, Commission File Number 0-8135.
(t)	2003 Long-Term Incentive Plan, as amended and restated* — Incorporated by reference to Appendix A of the Company’s Definitive Proxy Statement filed March 14, 2006, Commission File Number 0-8135.
(u)	Cash Bonus Plan* — Incorporated by reference to Appendix B of the Company’s Definitive Proxy Statement filed March 29, 2003, Commission File Number 0-8135.
(v)	Summary description of the compensation of Non-Employee Directors of Sigma-Aldrich Corporation — See Exhibit 10(v).
(w)	Summary description of the compensation for the Executive Officers of Sigma-Aldrich Corporation — See Exhibit 10(w).
(x)	Employment Agreement with President and Chief Executive Officer Jai P. Nagarkatti effective January 1, 2006* Incorporated by reference to Exhibit 10.2 of Form 8-K filed January 19, 2006, Commission File Number 0-8135.
(y)	Letter Regarding Terms of Employment by and between Sigma-Aldrich Corporation and Rakesh Sachdev, dated October 23, 2008 — Incorporated by reference to Exhibit 10(a) of Form 8-K filed November 5, 2008, Commission File Number 0-8135.
(z)	Note Purchase Agreement dated September 12, 2000. Incorporated by reference to Exhibit 10(x) of Form 10-K filed for the year ended December 31, 2007, Commission File Number 0-8135.
(aa)	Credit Agreement dated February 23, 2005 with Sigma-Aldrich Corporation and a syndicate of banks, including Wells Fargo, National Association and Wachovia Capital Markets, LLC, which served as joint lead arrangers, and other lenders named therein. Incorporated by reference to Exhibit 10.1 of Form 8-K filed February 25, 2005, Commission File Number 0-8135.
(ab)	Amendment No. 1 to Credit Agreement dated December 11, 2006 with Sigma-Aldrich Corporation and a syndicate of banks – Incorporated by reference to Exhibit 10.1 of Form 8-K filed December 13, 2006, Commission File Number 0-8135.
(ac)	Note Purchase Agreement dated December 5, 2006 – Incorporated by reference to Exhibit 10(z) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
(ad)	Credit Facility Agreement dated March 13, 2007 with Sigma-Aldrich Corporation and a syndicate of banks – Incorporated by reference to Exhibit 10.1 of Form 8-K filed March 14, 2007, Commission File Number 0-8135.
(ae)	Flexible Deferral Plan* – Incorporated by reference to Exhibit 10(aa) of Form 10-K filed for the year ended December 31, 2006, Commission File Number 0-8135.
11	Statement Regarding Computation of Net Earnings Per Share — Incorporated by reference to the information on net earnings per share included in Note 15 to the Company’s 2008 consolidated financial statements filed as Exhibit 13 below.
13	Pages 19-46 of the Annual Report to Shareholders for the year ended December 31, 2008.

F - 3

21	Subsidiaries of Registrant – See Exhibit 21.
23	Consent of Independent Registered Public Accounting Firm – See Exhibit 23.
31.1	Certification of Chief Executive Officer required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act – See Exhibit 31.1.
31.2	Certification of Chief Financial Officer required by Rule 13a-15(e) and 15d-15(e) under the Exchange Act – See Exhibit 31.2.
32.1	CEO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 – See Exhibit 32.1.
32.2	CFO Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002 – See Exhibit 32.2.

* Represents management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 15(c) of Form 10-K.

F - 4

EX-10.(V)

Exhibit 10(v)

The following table provides information relating to total compensation amounts paid to directors in 2008:

Director Compensation Table

Name	Year	Fees Earned or Paid in Cash (1)		Stock Awards (2)		Option Awards (3) (4)		Non-Equity Incentive Plan Comp.		Change in Pension Value and Nonqualified Deferred Comp. Earnings		All Other Comp.		Total
Rebecca M. Bergman (5)	2008	$	40,172	$	—	$	228,444	$	—	$	—	$	—	$	268,616
David R. Harvey (6)	2008		250,000		—		113,190		—		—		—		363,190
W. Lee McCollum (7)	2008		96,102		65,520		113,190		—		—		—		274,812
Avi M. Nash (8)	2008		75,147		65,520		113,190		—		—		—		253,857
William C. O’Neil, Jr. (9)	2008		34,747		65,520		—		—		—		—		100,267
Steven M. Paul (10)	2008		67,758		65,520		113,190		—		—		—		246,468
J. Pedro Reinhard (11)	2008		85,446		65,520		113,190		—		—		—		264,156
Timothy R.G. Sear (12)	2008		65,759		65,520		113,190		—		—		—		244,469
D. Dean Spatz (13)	2008		81,315		65,520		113,190		—		—		—		260,025
Barrett A. Toan (14)	2008		70,500		65,520		113,190		—		—		—		249,210

(1) Amounts listed represent payments for meeting attendance and annual retainer, which are described below under “Cash Compensation,” and the reimbursement of travel expenses.

(2) Amounts listed represent the compensation cost for shares of our common stock that were awarded to non-employee directors on January 2, 2008. Each non-employee director as of January 2, 2008 received 1,200 shares of stock with a total fair value of $65,520 on the award date.

(3) Represents the compensation cost of option awards, before reflecting assumed forfeitures, over the requisite vesting period, as described in Statement of Financial Accounting Standards No. 123(R), “Accounting for Stock-Based Compensation” (SFAS 123(R)). Options granted to directors vest over a three-month period. Amounts reflected within the table are different than the amounts recognized in the consolidated financial statements due to the assumed forfeiture rate reflected in the consolidated financial statements.

(4) On May 6, 2008, Ms. Bergman received 20,000 options that had a total grant date fair value of $228,444. On May 7, 2008, Dr. Harvey and Messrs. McCollum, Nash, Paul, Reinhard, Sear, Spatz and Toan each received 10,000 options that each had a total grant date fair value of $113,190.

(5) As of December 31, 2008, Ms. Bergman had 20,000 option awards outstanding.

(6) Dr. Harvey received $250,000 as part of his employment agreement in 2008, which is discussed in further detail on pages 34-35. As of December 31, 2008, Dr. Harvey had 190,000 option awards outstanding.

(7) As of December 31, 2008, Mr. McCollum had 76,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(8) As of December 31, 2008, Mr. Nash had 40,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(9) Mr. O’Neil retired from the Board of Directors in May 2008.

(10) As of December 31, 2008, Dr. Paul had 30,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(11) As of December 31, 2008, Mr. Reinhard had 76,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(12) As of December 31, 2008, Mr. Sear had 50,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(13) As of December 31, 2008, Mr. Spatz had 72,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

(14) As of December 31, 2008, Mr. Toan had 76,000 option awards outstanding and retained ownership of the 1,200 shares of common stock awarded to him on January 2, 2008.

Exhibit 10(v) (continued)

Cash Compensation

Directors who are employed by the Company receive no compensation or fees for serving as a director or for attending board or committee meetings. Directors who are not employed by the Company receive cash and stock compensation, as described below.

Except for Rebecca M. Bergman, each non-employee director received retainer fees of $45,000 in 2008 for being a member of the Board and its Committees. In May 2008, the Board voted to increase the retainer fee to $50,000 from $40,000, thus the retainer fee for the second half of 2008 was $25,000. Ms. Bergman, who was elected to the Board in May 2008, received reduced retainer fees of $25,000 in 2008. In addition, each non-employee director also received a fee for his or her participation in Board and Committee meetings. The following table provides information related to the meeting fees paid to non-employee directors:

	Board of Directors		Audit Committee (1)		Compensation Committee (2)		Corporate Governance Committee (2)
Participation in person (3)	$	3,000	$	1,000	$	1,000	$	1,000
Participation via conference call	$	1,500	$	500	$	500	$	500

(1) During 2008, the Audit Committee Chairman received $4,000 for every meeting attended in person and $2,000 for every conference call in which he participated.

(2) During 2008, the Compensation and Corporate Governance Committee Chairmen each received $2,000 for every meeting attended in person and $1,000 for every conference call in which they participated.

(3) Non-employee directors participating in person at meetings also received reimbursement of travel expenses.

Stock Compensation

Pursuant to the Company’s 2003 Long-Term Incentive Plan, the Company currently provides non-employee directors with stock compensation as follows:

• Newly elected directors will be granted options to acquire 20,000 shares of common stock upon the date of his or her initial election to the Board;

• Eligible directors serving on the Board on the day after any annual shareholder meeting, who have served on the Board for at least six months prior to the annual meeting, will be granted options to acquire 10,000 shares of common stock on such date; and

• Each non-employee director is awarded 1,200 shares of common stock on January 1^st of each fiscal year.

Seven of the eight existing non-employee directors received options to purchase 10,000 shares of common stock in 2008. Ms. Bergman received options to purchase 20,000 shares of common stock immediately after being elected to the Board in May 2008. If elected at the 2009 annual meeting, all eight continuing non-employee directors will receive options to purchase 10,000 shares of common stock the day after the meeting. The option exercise price per share is equal to the fair market value, or the closing stock price, of the common stock on the date the option is granted. No option will vest or may be exercised to any extent until the holder has continually served as a director for at least three months from the date of grant, provided that such options will vest and become exercisable upon termination of service by reason of death, disability or retirement, subject to the terms and conditions of the plan. The options expire ten years from the date of grant.

Except for Ms. Bergman, each existing non-employee Director received 1,200 shares of common stock on January 2, 2008. Each existing non-employee Director received 1,200 shares of common stock on January 2, 2009.

EX-10.(W)

Exhibit 10(w)

INFORMATION CONCERNING EXECUTIVE COMPENSATION

The following table presents details of compensation information previously discussed within the Compensation Discussion and Analysis for the Principal Executive Officer, the Principal Financial Officer and the three other most highly compensated executive officers, based on total compensation in 2008, 2007 and 2006:

SUMMARY COMPENSATION TABLE

	Year	Salary		Bonus (1)		Stock Awards (2)		Option Awards (3)		Nonequity Incentive Plan Comp. (4)		Change in Pension Value and Nonqualified Deferred Comp. Earnings (5)		All Other Comp. (6)		Total
Jai P. Nagarkatti President & CEO	2008 2007 2006	$	750,000 660,000 600,000	$	—   —   —	$	434,976 397,678 129,259	$	927,969 858,906 514,301	$	356,625 439,105 416,874	$	79,672 40,069 80,269	$	196,171 195,000 191,590	$	2,745,413 2,590,758 1,932,293
David R. Harvey (7) Chairman	2006		250,000		500,000		—		868,068		500,000		56,718		9,235		2,184,021
Rakesh Sachdev (8) Vice President & CFO	2008		59,375		—		37,667		37,677		—		932		2,077		137,728
Michael R. Hogan (8) Chief Administrative Officer & CFO	2008 2007 2006		394,167 430,000 430,000		—   —   —		85,950 133,412 51,704		433,979 328,637 313,127		124,951 213,495 222,955		10,913 4,965 12,201		34,680 42,000 41,820		1,084,640 1,152,509 1,071,807
Franklin D. Wicks President, Research Specialties & Research Essentials	2008 2007 2006		350,000 340,000 330,000		—   —   —		112,273 133,412 51,704		263,519 328,637 313,127		122,045 156,570 177,375		45,489 6,544 54,713		44,774 42,810 41,586		938,100 1,007,973 968,505
David W. Julien President, Supply Chain	2008 2007 2006		340,000 330,000 320,000		—   —   —		112,273 133,412 51,704		263,519 328,637 313,127		118,558 163,845 165,920		30,256 5,551 32,124		45,269 43,382 42,592		909,875 1,004,827 925,467
Gilles A. Cottier (7) President, SAFC	2008 2007		300,000 290,000		—   —		112,273 133,412		242,264 264,832		104,610 143,985		15,219 11,469		41,191 40,333		815,557 884,031

(1) Represents the amount paid to Dr. Harvey on January 3, 2006 pursuant to the terms of his prior employment agreement based on his continued employment through that date. Effective January 3, 2006, we entered into a new agreement with Dr. Harvey, described under “Employment Agreements” on page 33.

(2) Amounts listed represent the amount of expense recognized for financial reporting purposes in 2008, 2007 and 2006 for performance shares, before reflecting assumed forfeitures, in accordance with SFAS 123(R). Assumptions used in the calculation of these targeted amounts are included in Note 11 “Common Stock” to our consolidated financial statements for 2008 included in our Annual Report on Form 10-K filed with the SEC on February 27, 2009. The performance shares were granted pursuant to our 2003 LTIP. Dividends are not paid on these performance shares. The ultimate number of shares earned, pursuant to these grants, depends upon our performance over the three-year periods ending December 31 of each year, beginning with 2008. These shares are awarded after the results for the performance period have been determined. Amount shown for Mr. Hogan reflects the forfeiture of 1/36^th of the 2006 grant, 13/36ths of the 2007 grant and 25/36ths of the 2008 grant due to his retirement on November 30, 2008.

(3) Represents the amount of expense recognized for financial reporting purposes in 2008, 2007 and 2006, before reflecting assumed forfeitures, as described in SFAS 123(R), and thus includes amounts from awards granted in and prior to 2007 based on the vesting of these awards. Assumptions used in the calculation of these amounts are included in Note 11 “Common Stock” to our consolidated financial statements for 2008 included in our Annual Report on Form 10-K filed with the SEC on February 27, 2009.

(4) Amounts are earned and accrued during the fiscal year indicated and are paid subsequent to the end of the fiscal year pursuant to our cash bonus plan, discussed beginning on page 18, except for Dr. Harvey, who earned the amount paid to him on January 3, 2006 pursuant to the terms of his prior employment agreement based on the achievement of targeted financial performance for 2003, 2004 and 2005. The amount paid to Mr. Hogan was prorated based on the number of months employed during the current calendar year prior to his retirement on November 30, 2008.

(5) Amounts represent the change in the present value of accrued benefits under our defined benefit pension plan, discussed beginning on page 29, from November 30, 2007 to December 31, 2008. Effective with the 2008 calendar year, the Company was required to change the plan’s measurement date used for financial reporting purposes from November 30 to December 31. The change in the pension values is the change for the calendar year, rather than the thirteen months elapsed since the previous measurement date. There are no above-market or preferential investment earnings on nonqualified deferred compensation arrangements for any of our named executive officers or any other employees.

(6) Components of this column are described in the All Other Compensation table on page 27.

(7) Mr. Cottier qualified as a named executive officer in 2007 for purposes of compensation presentations. Dr. Harvey qualified as a named executive officer in 2006 only.

(8) Mr. Hogan retired on November 30, 2008. Mr. Sachdev replaced Mr. Hogan as CFO on November 17, 2008.

The components of all other compensation for 2008 are as follows:

ALL OTHER COMPENSATION

Name	Year	401(k) Retirement Savings Plan		Supplemental Retirement Plan		Personal Use of Company Vehicle		Total
Jai P. Nagarkatti	2008	$	8,880	$	182,300	$	4,991	$	196,171
Rakesh Sachdev	2008		—		—		2,077		2,077
Michael R. Hogan	2008		8,880		25,800		—		34,680
Franklin D. Wicks	2008		8,880		28,500		7,394		44,774
David W. Julien	2008		8,880		27,900		8,489		45,269
Gilles A. Cottier	2008		8,880		25,500		6,811		41,191

EX-13

Exhibit 13

Selected Financial Data

(Unaudited)

Common Stock Data (per share):

	2008 Price Range				2007 Price Range				Dividends
	High		Low		High		Low		2008		2007
First Quarter	$	60.04	$	47.13	$	42.91	$	37.40	$	0.13	$	0.115
Second Quarter		63.04		53.75		43.82		40.87		0.13		0.115
Third Quarter		62.74		50.02		50.98		42.61		0.13		0.115
Fourth Quarter		54.13		34.33		56.59		47.92		0.13		0.115

The Company’s common stock is traded in the National Association of Securities Dealers Automated Quotation System (“NASDAQ”) Global Select Market. The trading symbol is SIAL.

On January 31, 2009, there were 764 record holders of the Company’s common stock.

See Management’s Discussion and Analysis related to items affecting the comparability of results and accounting changes for the financial data presented below.

Annual Financial Data ($ In Millions, except per share data):

	2008		2007		2006		2005		2004
Net sales	$	2,200.7	$	2,038.7	$	1,797.5	$	1,666.5	$	1,409.2
Net income from continuing operations		341.5		311.1		276.8		258.3		232.9
Per share:
Net income from continuing operations — Basic		2.70		2.38		2.08		1.90		1.69
Net income from continuing operations — Diluted		2.65		2.34		2.05		1.88		1.67
Dividends		0.52		0.46		0.42		0.38		0.34
Total assets		2,556.5		2,629.1		2,334.3		2,131.3		1,745.0
Long-term debt		200.1		207.0		337.9		283.2		177.1
Pension obligations — Long term		53.1		20.0		29.4		7.7		7.0
Post-retirement medical benefit plans		39.5		36.9		38.5		54.3		54.5
Quarterly Financial Data ($ In Millions, except per share data):
			2008 Quarter Ended
			March 31		June 30		Sept. 30		Dec. 31
Net sales			$	569.6	$	580.7	$	540.6	$	509.8
Gross profit				292.2		294.9		277.9		264.9
Net income				84.5		90.8		81.9		84.3
Net income per share — Basic				0.65		0.71		0.65		0.68
Net income per share — Diluted				0.64		0.70		0.64		0.68
			2007 Quarter Ended
			March 31		June 30		Sept. 30		Dec. 31
Net sales			$	495.9	$	507.5	$	503.2	$	532.1
Gross profit				254.4		260.5		255.9		265.2
Net income				74.9		79.7		71.6		84.9
Net income per share — Basic				0.57		0.61		0.55		0.66
Net income per share — Diluted				0.56		0.60		0.54		0.64

All per share and common stock information presented above prior to 2007 has been retroactively adjusted to reflect the December 2006 common stock split.

19

Exhibit 13 (continued)

Sigma-Aldrich

2008 Financial Report

Table of Contents

Management’s Discussion And Analysis	21
Consolidated Statements of Income	28
Consolidated Balance Sheets	29
Consolidated Statements of Stockholders’ Equity	30
Consolidated Statements of Cash Flows	31
Notes To Consolidated Financial Statements	32
Management’s Report On Internal Control Over Financial Reporting	46
Report Of Independent Registered Public Accounting Firm	46

20

Exhibit 13 (continued)

Management’s Discussion And Analysis

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

INTRODUCTION

Sigma-Aldrich Corporation (“the Company”) is a leading Life Science and High Technology company. The Company develops, manufactures, purchases and distributes the broadest range of high quality chemicals, biochemicals and equipment available throughout the world. These chemical products and kits are used in scientific research, including genomic and proteomic research, biotechnology, pharmaceutical development and as key components in pharmaceutical, diagnostic and other high technology manufacturing. The Company operates in 37 countries, manufacturing 46,000 of the 100,000 chemical products it offers. The Company also offers 30,000 equipment products. The Company sells into nearly 160 countries, servicing over 88,000 accounts representing over one million individual customers.

The Company has four business units featuring the Research units of Essentials, Specialties and Biotech and the Fine Chemicals unit, SAFC. The units are closely interrelated in their activities and share services such as order entry, billing, technical services, Internet, purchasing and inventory control and share production and distribution facilities. Additionally, these units are supported by centralized functional areas such as finance, human resources, quality, safety and compliance and information technology.

Research Essentials, representing 19% of sales, provides customized, innovative solutions for our economic buyers. Research Specialties, representing 38% of sales, facilitates accelerated research by lab scientists through information and innovation in services and new products. Research Biotechnology, representing 15% of sales, provides innovative first-to-market products and technologies for the Life Science researcher. SAFC, representing 28% of sales, drives commercial project managers’ success through rapid delivery of custom projects.

The Company has a broad customer base of commercial laboratories, pharmaceutical companies, industrial companies, universities, diagnostics companies, biotechnology companies, electronics companies, hospitals, governmental institutions and non-profit organizations located in the United States and internationally, and would not be significantly impacted by the loss of any one customer. However, economic conditions and government research funding in the United States and internationally do impact demand from our customers.

The current uncertainty in the global markets reduces future visibility, making it difficult to forecast sales with a desirable level of certainty. Demand from several of the Company’s key markets is expected to decline in 2009, but with new program launches, global sales initiatives and market share gains, the Company expects to be able to achieve low single digit organic sales growth in 2009.

HIGHLIGHTS

Reported sales increased 7.9% to $2,200.7 in 2008 from $2,038.7 in 2007. Organic sales growth, excluding currency impacts and the contribution from the acquisition of Epichem, Ltd. (Epichem), was 5.0% in 2008. The impact of changes in currency rates increased otherwise reportable sales growth by 2.7%.

Reported net income in 2008 increased 9.8% to $341.5 from $311.1 in 2007. The increase in net income in 2008 resulted from an improved gross profit margin reflecting the benefits of pricing actions and favorable currency, selling, general and administrative expenses that were consistent with 2007 due to successful efforts to control costs to offset losses on equity investments and a litigation settlement, and lower net interest expense due primarily to lower interest rates.

Diluted earnings per share in 2008 increased 13.2% to $2.65 from $2.34 in 2007. The increase in diluted earnings per share resulted from items identified in the discussion of net income and benefits from share repurchase activity during 2008.

Reported sales increased 13.4% to $2,038.7 in 2007 from $1,797.5 in 2006. Organic sales growth, excluding currency impacts and the contribution from the acquisition of Epichem, Ltd. (Epichem), was 6.5% in 2007. The impact of changes in currency rates increased otherwise reportable sales growth by 4.8%. The acquisition of Epichem in February 2007 added 2.1% to sales growth.

Reported net income in 2007 increased 12.4% to $311.1 from $276.8 in 2006. The increase in net income in 2007 resulted from organic sales growth in each of the Company’s four business units, lower selling, general and administrative expense levels and lower net interest costs. A higher effective tax rate partially offset net income improvement.

Diluted earnings per share in 2007 increased 14.1% to $2.34 from $2.05 in 2006. The increase in diluted earnings per share resulted from items previously identified in the discussion of net income, with additional benefits from share repurchase activity.

NON-GAAP FINANCIAL MEASURES

The Company uses certain non-GAAP financial measures to supplement its GAAP disclosures. The Company does not, and does not suggest investors should, consider such non-GAAP financial measures in isolation from, or as a substitute for, GAAP financial information. These non-GAAP measures may not be consistent with the presentation by similar companies in the Company’s industry. Whenever the Company uses such non-GAAP measures, it provides a reconciliation of such measures to the most closely applicable GAAP measure.

With over 60% of sales denominated in currencies other than the U.S. dollar, management uses currency adjusted growth, and believes it is useful to investors, to judge the Company’s controllable, local currency performance. Organic sales growth data presented herein excludes currency, and where indicated, acquisition impacts. While we are able to report currency impacts after the fact, we are unable to estimate changes that may occur in 2009 to applicable exchange rates and are thus unable to reconcile the projected non-GAAP, currency adjusted internal growth rates to reported GAAP growth rates for the year 2009 as required by Regulation G adopted by the Securities and Exchange Commission. Any significant changes in currency exchange rates would likely have a significant impact on our reported growth rates due to the volume of our sales denominated in foreign currencies.

The Company also reports both GAAP and adjusted sales and income amounts and comparisons to reflect what it believes is ongoing and/or comparable operating results excluding currency impacts and the sales benefit from acquisitions. The Company excludes these other items in judging its historical performance and in assessing its expected future performance. Management also uses free cash flow, a non-GAAP measure, to judge its performance. Management believes this non-GAAP information is useful to investors as well.

21

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

CRITICAL ACCOUNTING ESTIMATES

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the years presented. Actual results could differ from those estimates under different assumptions or conditions.

The following accounting policies are based on, among other things, judgments and assumptions made by management that include inherent risks and uncertainties. Management’s estimates are based on the relevant information available at the end of each period.

Inventories Inventories are valued at the lower of cost or market. The Company regularly reviews inventories on hand and records a provision for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The provision for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories.

Long-Lived Assets Long-lived assets, including intangibles with definite lives, are amortized over their expected useful lives. Goodwill and other intangibles with indefinite lives are not amortized against earnings. Goodwill is assessed annually for impairment. All long-lived assets are assessed whenever events and changes in business conditions indicate that the carrying amount of an asset may not be fully recoverable. If impairment is indicated, the asset value is written down to its fair market value. Any significant unanticipated changes in business or market conditions that vary from current expectations could have an impact on the fair market value of these assets and any potential associated impairment.

Pension and Other Post-Retirement Benefits The determination of the obligation and expense for pension and other post-retirement benefits is dependent on the Company’s selection of certain assumptions used by actuaries to calculate such amounts. Those assumptions are described in Note 13 to the consolidated financial statements and include, among others, the discount rates, expected return on plan assets and rates of increase in compensation and health care costs.

In accordance with U.S. generally accepted accounting principles, actual results that differ from the assumptions are accumulated and amortized over future periods and therefore, generally affect the recognized expense and recorded obligation in such future periods. While the Company believes that the assumptions are appropriate, significant differences in actual experience or significant changes in the assumptions may materially affect the Company’s pension and other post-retirement benefit obligations and the Company’s future expense. A 1% increase in the discount rate assumption would have reduced the net periodic benefit cost by $0.8 for the U.S. plans and $2.3 for the International plans. A 1% reduction in the discount rate assumption would have increased the net periodic benefit cost by $0.8 for the U.S. plans and $5.5 for the International plans. A 1% change in the expected return on plan assets would have an impact on the Company’s pension expense of $2.7.

Stock Options The Company accounts for stock-based compensation in accordance with Statement of Financial Accounting Standards No. 123 (Revised 2004), “Share-Based Payment” (SFAS 123(R)). Under the provisions of SFAS 123(R), stock-based compensation cost for stock options is estimated at the grant date based on the award’s fair value as calculated by the Black-Scholes option-pricing model and is recognized as expense ratably over the requisite service period. The Black-Scholes model requires the input of various estimates including volatility, forfeiture rates and expected option life. Those inputs to the Black-Scholes model are described in Note 11 to the consolidated financial statements. If any of the assumptions in future periods used in the Black-Scholes model vary significantly from current expectations, future stock-based compensation expense may also change significantly. Therefore, current year stock-based compensation expense is not necessarily indicative of future results.

Taxes The Company operates within multiple taxing jurisdictions and is subject to audit in these jurisdictions. These audits can involve complex issues, which may require an extended period of time to resolve. The Company regularly reviews its potential tax liabilities for tax years subject to audit. Changes in the Company’s tax provision and liability occurred in 2008, 2007 and 2006 and may occur in the future as its assessments change based on the progress of tax examinations in various jurisdictions and/or changes in worldwide tax regulations. In management’s opinion, adequate provisions for income taxes have been made for all years presented.

Deferred tax assets and liabilities are recognized for the future tax benefits or liabilities attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates would be recognized in income in the period that includes the enactment date. The Company regularly reviews its deferred tax assets for recoverability and establishes a valuation allowance when it believes that such assets may not be recovered, taking into consideration historical operating results, expectations of future earnings, changes in its operations and the expected timing of the reversals of existing temporary differences.

22

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS

Sales Sales increased 7.9%, 13.4%, and 7.9% in 2008, 2007 and 2006, respectively. Sales increases were primarily attributable to improved unit volume growth, price increases, currency benefits and acquisitions. The Company’s pricing strategy changed in 2008 to reflect the pressure that the Company was facing from its vendors, including products dependant on petroleum. The 2008 price increase was responsible for approximately 2% of the indicated sales increase. New product sales, while not material in the year introduced, do contribute to sales growth in subsequent years. The effect of translating foreign currency sales into U.S. dollars increased the 2008, 2007 and 2006 sales growth by 2.7%, 4.8%, and 0.4%, respectively.

Reported sales growth, currency benefits, sales increases from acquisitions and the adjusted sales changes are as follows:

	Year Ended December 31, 2008
	Reported		Currency Benefit		Acquisition		Adjusted
Research Essentials	7.7	%	2.8	%	—	%	4.9	%
Research Specialties	9.4	%	3.0	%	—	%	6.4	%
Research Biotech	10.0	%	3.0	%	—	%	7.0	%
Research Chemicals	9.1	%	2.9	%	—	%	6.2	%
SAFC	5.2	%	2.0	%	0.7	%	2.5	%
Total	7.9	%	2.7	%	0.2	%	5.0	%
	Year Ended December 31, 2007
	Reported		Currency Benefit		Acquisition		Adjusted
Research Essentials	10.0	%	5.0	%	—	%	5.0	%
Research Specialties	12.5	%	5.0	%	—	%	7.5	%
Research Biotech	9.1	%	4.5	%	—	%	4.6	%
Research Chemicals	11.1	%	4.9	%	—	%	6.2	%
SAFC	19.5	%	4.4	%	7.6	%	7.5	%
Total	13.4	%	4.8	%	2.1	%	6.5	%
	Year Ended December 31, 2006
	Reported		Currency Benefit		Acquisition		Adjusted
Research Essentials	4.2	%	0.4	%	—	%	3.8	%
Research Specialties	6.9	%	0.4	%	—	%	6.5	%
Research Biotech	5.6	%	—	%	—	%	5.6	%
Research Chemicals	5.9	%	0.3	%	—	%	5.6	%
SAFC	13.4	%	0.7	%	4.3	%	8.4	%
Total	7.9	%	0.4	%	1.1	%	6.4	%

Currency and acquisition adjusted sales growth in Research Essentials, Research Specialties, Research Biotech and SAFC for 2008 was 4.9%, 6.4%, 7.0% and 2.5%, respectively. Research Essentials sales growth was due to solid demand in all world areas with the strongest growth in CAPLA (Canada, Asia Pacific and Latin America). Customer segments primarily driving the unit’s growth were commercial labs and industrial companies. Research Specialties sales growth was due to gains in biotechnology, hospital and academic accounts. Product initiatives driving this growth were Analytical and Lab equipment. Europe was the strongest driver of growth from a geography perspective. Research Biotech had its strongest growth in CAPLA followed closely by the U.S. customer segments. Contributing to this growth were commercial, industrial and diagnostics companies. Molecular biology was the strongest initiative in terms of growth over the prior year. SAFC growth in 2008 was driven by strong demand in biotechnology, diagnostics, commercial labs and academic customer segments. Demand for SAFC products in CAPLA showed the strongest growth over the prior year compared to Europe and the U.S. Hitech was the initiative with the most momentum during 2008.

Currency and acquisition adjusted sales growth in Research Essentials, Research Specialties, Research Biotech and SAFC for 2007 was 4.6%, 8.3%, 3.7% and 7.1%, respectively. Research Essentials’ sales growth was due to strong demand in all customer segments and all geographies, with particularly strong growth in the industrial and pharmaceutical customer segments and the cell culture and lab essentials product initiatives. Research Specialties delivered sales growth that was helped by increased sales to pharmaceutical and academic accounts in Europe, the U.S. and CAPLA. Better product availability from intentional inventory increases and new supplier relationships in CAPLA markets continued to fuel double-digit organic growth in CAPLA. Customer-centric marketing programs aimed at serving pharmaceutical customers and their contract research organizations wherever located around the globe continued to gain traction. Research Biotech growth was driven by strong spending by academic customers in Europe and by growth in molecular biology and peptide products in both the U.S. and Europe in the latter part of the year. 2007 growth was impacted by softness in demand for synthetic DNA products. The addition of sales specialists and ongoing expansion of product offerings through internal development and technology licenses contributed to resurgent growth during the last half of 2007. Hitech products, including sales from Epichem, helped SAFC drive double-digit growth with commercial and industrial customers in European and CAPLA markets. Strong sales to pharmaceutical customers in the U.S. also contributed to this unit’s growth. Demand for industrial cell culture products declined during the second half of 2007.

Our goal to accelerate growth in our non-European international markets was achieved, increasing sales in these markets to approximately 22%, which includes 2% from export sales from other global regions, of total sales for 2008. Our focus countries of China, India and Brazil collectively increased reported sales at a double-digit rate in 2008. Our initiative to build on our Internet superiority continued to drive sales growth. Web-based sales increased to 42% of total Research based sales in 2008 from 40% in 2007.

Full year 2009 currency and acquisition adjusted sales are expected to grow modestly at a low single-digit rate. At 2008 year-end rates, currency is expected to negatively impact sales in 2009 versus providing a benefit as it has in 2006 and 2007. The current economic environment makes predicting future sales particularly challenging. We believe some business units will be more impacted by the global economic slowdown, specifically SAFC with its larger dependence on the pharmaceutical industry. There is also uncertainty about the funding of biotech companies which may also impact our Research businesses. Academic spending is also uncertain.

23

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS (continued)

Gross Profit Margin Gross profit margin was 51.3%, 50.8%, and 51.2% of sales in 2008, 2007 and 2006, respectively. The following table reflects the significant contributing factors to the net change in gross profit margin for the years ended December 31, 2008, 2007 and 2006, respectively, as a percentage of sales compared to the same period in the prior year:

	Year Ended December 31,
Contributing Factors	2008		2007		2006
Inventory purchase accounting charges	—	%	0.2	%	0.9	%
Unfavorable product mix	(1.3	)	—		(0.7	)
Favorable pricing	0.9		0.6		0.7
Higher unit sales volume	0.4		0.6		0.8
Higher manufacturing and distribution costs	(0.9	)	(1.8	)	(1.8	)
Lower margin acquired business	(0.1	)	(0.7	)	—
Favorable/(unfavorable) currency impact	1.8		1.1		(0.3	)
Other impacts	(0.3	)	(0.4	)	0.7
Net (decline)/improvement in gross profit margin as a percentage of sales	0.5	%	(0.4	)%	0.3	%

The increase in gross profit margin as a percent of sales of 0.5% in 2008 was primarily due to currency benefits, favorable pricing and higher unit volumes. These were offset by unfavorable product mix and higher manufacturing and distribution costs.

The decrease in gross profit margin as a percent of sales of 0.4% in 2007 is primarily due to higher manufacturing and distribution costs partially offset by favorable pricing, increased unit sales volume and favorable currency benefits. There was also downward pressure on gross profit margin from a lower margin acquired business in 2007.

We have various cost containment initiatives underway including a supply chain initiative, which we expect to provide benefits in 2009. We expect currency to have a negative impact on the gross profit margin in 2009.

Selling, General and Administrative Expenses Selling, general and administrative expenses were 25.5%, 25.4%, and 25.8% of sales in 2008, 2007 and 2006, respectively. Losses on equity investments and a legal settlement were the primary drivers of the increase in selling general and administrative expenses in 2008 representing a 0.5% increase as a percent of sales. These amounts were primarily offset by decreases in salaries and wages and legal and professional consulting expenses, aggregating 0.4% of sales. Insurance expense decreased by 0.6% of sales in 2007 as compared to 2006 as a result of decreased claims activity and other recoveries. No other expense category was individually significant as a percent of sales in explaining the change from 2006 to 2007.

Research and Development Expenses Research and development expenses were 2.9% of sales in 2008, 2007 and 2006. The research and development expenses relate primarily to efforts to add new manufactured products. All manufactured products currently account for approximately 60% of total sales.

Interest Expense, Net Net interest expense reduced pretax earnings by $14.3, $22.0, and $24.0 in 2008, 2007 and 2006, respectively. Lower interest rates in 2008 reduced net interest expense compared to 2007, partially offset by higher debt levels in 2008. Lower interest rates during 2007 and shifting debt from higher rate to lower rate world areas reduced net interest expense in 2007 compared to 2006, even with consistently higher debt levels during 2007 as compared to 2006.

Income Taxes Income taxes, which include federal, state and international taxes were 30.2%, 28.9%, and 26.9% of pretax income in 2008, 2007 and 2006, respectively. The higher effective tax rate for the full year of 2008 compared to the same period in 2007 is primarily due to a decrease in the U.S. manufacturing deduction in 2008. The higher effective tax rate for the full year of 2007 compared to the same period in 2006 reflects the absence of a net benefit from audit activity in 2007 and expiring U.S. export tax benefits in 2006, partially offset by increases in the U.S. manufacturing deduction and net international taxes benefits in 2007.

Our effective tax rate for 2009 is expected to be in the range of 31–32%, due to a reduction in net international taxes benefit and an increased charge for tax audit and related contingencies.

Accounting Changes In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158). SFAS 158 requires companies to recognize, on a prospective basis, the funded status of their defined benefit pension and other post-retirement benefit plans in the Consolidated Balance Sheets and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of net periodic benefit costs. SFAS 158 also requires additional disclosures in the notes to the consolidated financial statements and the use of a company’s fiscal year-end as the measurement date for plan assets and benefit obligations, eliminating the use of earlier measurement dates that were previously permissible. The Company adopted all provisions of SFAS 158 as of December 31, 2006, except the measurement date requirement. The net impact of applying SFAS 158 on the Company’s 2006 consolidated financial statements was a $31.7 reduction of stockholders’ equity. The new measurement date requirement is effective for fiscal years ending after December 15, 2008. The adoption of the measurement date provision did not have a significant impact on the consolidated financial statements.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an acquiring entity recognizes and measures in its financial statements the assets acquired and liabilities assumed. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. SFAS 141(R) is effective for fiscal years beginning after December 15, 2008, and will be applied prospectively to acquisitions beginning January 1, 2009. As this adoption impacts prospective acquisitions, the adoption of SFAS 141(R) is not expected to have a significant impact on the Company’s consolidated financial statements.

In December 2007, the EITF reached a consensus on EITF Issue No. 07-1, “Accounting for Collaborative Arrangements” (EITF 07-1). EITF 07-1 addresses the accounting for activities of collaborative arrangements outside of an established separate legal entity, such as those to jointly develop and commercialize intellectual property. Under EITF 07-1, revenues and costs incurred with third parties in connection with the collaborative arrangement should be presented gross or net based on the criteria in EITF Issue No. 99-19, “Reporting Revenue Gross as Principal versus Net as an Agent” and other applicable accounting literature. The consensus is effective for fiscal years beginning after December 15, 2008, and will be applied to using a retrospective method that requires reclassification in all periods presented for those arrangements still in effect at January 1, 2009. The adoption of EITF 07-1 is not expected to have a significant impact on the Company’s consolidated financial statements.

24

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OPERATING RESULTS (continued)

In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). The intent of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R). FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The Company does not expect the impact of FSP FAS 142-3 on its consolidated financial statements to be significant.

In December 2008, the FASB issued FASB Staff Position (FSP) No.132 (R)-1, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (FSP 132(R)-1). FSP 132(R)-1 provides additional guidance regarding disclosures about plan assets of defined benefit pension or other postretirement plans. FSP 132(R)-1 is effective for fiscal years ending after December 15, 2009. The Company does not expect the impact of FSP FAS 132(R)-1 on its consolidated financial statements to be significant.

LIQUIDITY AND CAPITAL RESOURCES

The Company’s cash flows from operating, investing and financing activities, as reflected in the Consolidated Statements of Cash Flows, are summarized in the following table:

	Years Ended December 31,
	2008			2007			2006
Net cash provided by (used in):
Operating activities	$	404.0		$	417.0		$	328.8
Investing activities		(86.7	)		(149.0	)		(102.8	)
Financing activities		(273.9	)		(212.0	)		(156.2	)

Operating Activities Net cash provided by operating activities decreased $13.0 or 3.1% in 2008 compared to 2007. This decrease results primarily from higher pension plan contributions and investments in working capital to support current year growth which were partially offset by increased net income and net changes in income taxes.

Net cash provided by operations increased $88.7 or 26.8% in 2007 compared to 2006. The increase relates primarily to higher net income from operations, including the $19.0 non-cash impact of stock-based compensation expense. The most significant offset to operating cash inflows was the impact of higher inventory balances at December 31, 2007 as compared to 2006 when high accounts receivable balances were the significant impact. Higher inventory balances are due to intentional international inventory increases to improve service to customers in CAPLA markets. Income taxes paid in 2007 were impacted by the timing of international payments resulting in an increase in accrued income taxes at December 31, 2007.

Investing Activities Cash used in investing activities decreased $62.3 primarily due to lower levels of acquisition activity in 2008 as compared to 2007. Capital expenditures increased $12.3, or 15.9%, from 2007 to $89.9 in 2008, to expand our business systems and website capabilities, as well as increasing production and warehousing capacity at certain locations.

Investing activities in 2007 were focused on capital expenditures to upgrade our website, continuing to expand our business systems utilizing SAP software, and providing incremental production capacity for material science and pharmaceutical customers. These activities are included in the $77.6 of capital expenditures in 2007. Acquisitions used another $67.6 of cash in 2007.

For 2009, capital spending is expected to be approximately $110.0.

Financing Activities In 2008, cash used in financing activities increased $61.9 from 2007. This increase is due primarily to payments for treasury stock purchases of $421.2 compared to $184.3 in 2007, as well as repayment of $90.0 in long-term debt. These cash outflows were partially offset by an increase in short-term debt, net of repayments, of $270.5 in 2008 compared to $61.8 in 2007.

In 2007, financing cash outflows included the repayment of long-term debt of $69.7 and payment of dividends of $60.0. The most significant outflow was for the purchase of treasury stock at $184.3. Cash inflows of $94.2 were received from the exercise of stock options and the issuance of short-term debt.

In March 2007, the Company entered into a $200.0 seven-year multi-currency European revolving credit facility with a syndicate of banks having a maturity date of March 13, 2014. Borrowings of $135.9 and $56.5 were outstanding at December 31, 2008 and 2007, respectively.

Long-term debt at December 31, 2008 was $200.1 compared to $207.0 in 2007. Total debt as a percentage of total capitalization was 34.6% and 25.0% at December 31, 2008 and 2007, respectively. The significant change in the percentage primarily relates to the stock repurchase of $421.2 which (1) decreased equity and therefore increased the total debt as a percentage of total capitalization and (2) also contributed to the $197.5 increase in short-term debt.

For a description of the Company's material debt covenants, see Notes 5 and 6 to the consolidated financial statements.

Share Repurchases At December 31, 2008 and December 31, 2007, the Company had repurchased a total of 92.3 million shares and 84.0 million shares, respectively. On October 20, 2008, the Board of Directors authorized the repurchase of up to an additional 10.0 million shares under the existing repurchase program, to be available for purchase within three years, bringing the total authorization to 100.0 million shares. There were 122.1 million shares outstanding as of December 31, 2008. The Company expects to acquire the remaining 7.7 million authorized shares; however, the timing of these future repurchases, if any, will depend upon market conditions and other factors.

Liquidity and Risk Management Liquidity risk refers to the risk that the Company might be unable to meet potential cash outflows promptly and cost effectively. Factors that could cause such risk to arise might be disruption to the securities market, downgrades in the Company’s credit rating or the unavailability of funds. In addition to the Company’s cash flows from operations, the Company utilizes commercial paper, its credit facilities and long-term debt as funding sources. The Company maintains committed bank lines of credit to support its commercial paper borrowings, term loans and local bank lines of credit to support international operations. Downgrades in the Company’s credit rating or other limitations on the ability to access short-term financing, including the ability to refinance short-term debt as it becomes due, would increase interest costs and adversely affect profitability.

The Company continues to assess the potential impact of recent trends in the global economic environment on its liquidity and overall financial condition, particularly with respect to the Company’s availability of and access to short-term credit, including the market for commercial paper. Management does not believe that a significant risk exists of commercial paper or other credit becoming unavailable within the next 12 months. Management believes that the Company’s financial condition is such that internal and external resources are sufficient and available to satisfy the Company’s requirements for debt service, capital expenditures, acquisitions, dividends, share repurchases, funding of pension and other post-retirement benefit plan obligations, and working capital presently and for the next 12 months.

25

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

OTHER MATTERS

The Company is involved in legal proceedings generally incidental to its business, as described below:

Insurance and Other Contingent Liabilities and Commitments The Company is a defendant in several lawsuits and claims related to the normal conduct of its business, including lawsuits and claims related to product liability and personal injury matters. The Company accrues for such liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. The Company has self-insured retention limits and has obtained insurance to provide coverage above the self-insured limits for product liability and personal injury claims, subject to certain limitations and exclusions. Reserves have been provided to cover expected payments for these self-insured amounts at December 31, 2008 and 2007.

In one group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing similar products, is a defendant in multiple claims alleging injuries from exposure to various chemicals by a limited number of employees of one electronics manufacturer. These claims have been filed in three states. A global settlement has been reached for all cases, which will be submitted to the court for approval. The settlement is not significant to the Company’s consolidated financial statements.

In another group of lawsuits and claims, the Company provided a product for use in research activities in developing various vaccines at pharmaceutical companies. The Company, together with other manufacturers and distributors offering the same product and several pharmaceutical companies, has been named as a defendant and served in 294 lawsuits, of which 59 lawsuits have been dismissed to date. Several of the outstanding suits have been stayed by various state and federal courts pending a decision on coverage available under a U.S. federal government relief program. No definite date has been set for this decision. In all cases, the Company believes its products in question were restricted to research use and that proper information for safe use of the products was provided to the customer.

In another group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing flavoring products, is a defendant in multiple claims alleging personal injuries from exposure to the products. The Company has been named as a defendant and served in 14 lawsuits, 2 of which have been dismissed. These claims have been filed in four states. On November 4, 2008 a settlement, which was not material to the Company’s consolidated financial condition, results of operations or liquidity, was reached in one case. Additionally, the Company believes the settlement reached does not change its position as it relates to other claims in this group. The Company is vigorously defending its rights as to the remaining claims. The Company believes it is covered by insurance for the above matters, subject to its self-insurance retention limits.

A class action complaint was filed against a subsidiary of the Company in the Montgomery County, Ohio Court of Common Pleas related to a 2003 explosion in a column at the Company’s Isotec facility in Miamisburg, Ohio. The case was separated into the following four phases: phase one — existence of liability, phase two — quantification of any compensatory damages, phase three — existence of any punitive damages and phase four — quantification of any punitive damages. Class certification was granted to phases one, three and four, but denied to phase two. Compensatory damages for all plaintiffs must be established before the case can proceed to the punitive damages phases. The Company has accepted responsibility for phase one, existence of liability. The case is currently in the compensatory damages phase, where, because no class status exists, each plaintiff must individually establish actual damages. The initial phase two, compensatory damages trial, for 31 plaintiffs was completed on April 27, 2007 with a jury verdict establishing actual damages of approximately two hundred dollars per plaintiff. The plaintiffs filed an appeal staying further action on the case until the appeal has been resolved. The appellate court granted in part and denied in part plaintiffs’ appeal on evidentiary rulings and jury instructions, and the Company has appealed some elements of that decision to the Ohio Supreme Court. The Company continues to believe it has substantial legal defenses to the allegations, which it will vigorously assert.

The Company believes its reserves and insurance are sufficient to provide for claims outstanding at December 31, 2008. While the outcome of the current claims cannot be predicted with certainty, the possible outcome of the claims is reviewed at least quarterly and reserves adjusted as deemed appropriate based on these reviews. Based on current information available, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Future claims related to the use of these categories of products may not be covered in full by the Company’s insurance program.

At December 31, 2008, there were no other known contingent liabilities that management believes could have a material adverse effect on the Company’s consolidated financial condition or results of operations, nor were there any material commitments outside of the normal course of business. Material commitments in the normal course of business include notes payable, long-term debt, lease commitments and pension and other post-retirement benefit obligations which are disclosed in Note 5, Note 6, Note 8 and Note 13, respectively, to the consolidated financial statements for the year ended December 31, 2008.

INFLATION

Management recognizes that inflationary pressures may have an adverse effect on the Company through higher asset replacement costs and higher material and other operating costs. The Company tries to minimize these effects through cost reductions and productivity improvements as well as price increases to maintain reasonable profit margins. It is management’s view, however, that inflation has not had a significant impact on operations in the three years ended December 31, 2008.

26

Exhibit 13 (continued)

Management’s Discussion And Analysis (continued)

($ In Millions, Except Per Share Data)

The following should be read in conjunction with the consolidated financial statements and related notes.

MARKET RISK SENSITIVE INSTRUMENTS AND POSITIONS

The market risk inherent in the Company’s financial instruments and positions represents the potential loss arising from adverse changes in interest rates and foreign currency exchange rates.

Interest Rates At December 31, 2008, the Company’s outstanding debt represents 34.6% of total capitalization. Approximately 28.4% of the Company’s outstanding debt at December 31, 2008 is at a fixed rate. Cash flows from operations and available credit facilities are sufficient to meet the working capital requirements of the Company. It is management’s view that market risk or variable interest rate risk will not significantly impact the Company’s results of operations.

Foreign Currency Exchange Rates The functional currency of the Company’s international subsidiaries is generally the dominant currency in the respective country of residence of the subsidiary. The translation from the functional currencies to the U.S. dollar for revenues and expenses is based on the average exchange rate during the period. Large increases or decreases in the spread between currencies have affected and may continue to affect the Company’s revenues, revenue growth rates, gross profit margins, net income and stockholders’ equity.

The Company transacts business in many parts of the world and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to minimize the impact of foreign currency exchange rate changes during the period of time between the original transaction date and its cash settlement. Accordingly, the Company uses forward exchange contracts to stabilize the value of certain receivables and payables denominated in foreign currencies. Most of the contracts are single currency. Gains and losses on these contracts, based on the difference in the contract rate and the spot rate at the end of each month for all contracts still in force, are typically offset either partially or completely by transaction gains and losses, with any net gains and losses included in selling, general and administrative expenses. The market risk of foreign currency rate changes represents the potential loss in fair value of net currency positions at year-end due to an adverse change in foreign currency exchange rates. The Company does not enter into foreign currency contracts for speculative trading purposes. The Company’s policy is to manage the risks associated with existing receivables, payables and commitments.

The Company continues to assess the potential impact of recent trends in the global economic environment on the availability of and its access to these forward currency exchange contracts in the open market, as well as the ability of the counterparties to meet their obligations. Based on the relative stability of the significant foreign currencies utilized by the Company, management does not believe that a significant risk exists of these forward contracts becoming unavailable in the global marketplace within the next 12 months.

The market risk of the Company’s foreign currency positions at December 31, 2008, assuming a hypothetical 10% change in foreign currency exchange rates, would be less than $3.5.

AGGREGATE CONTRACTUAL OBLIGATIONS

The following table represents contractual obligations of the Company at December 31, 2008:

	Payments due by period
Contractual Obligations	Total		Less than 1 year		1–3 years		3–5 years		More than 5 years
Long-term debt	$	207.0	$	6.9	$	200.1		—		—
Interest payments related to long-term debt		25.6		12.8		12.8		—		—
Operating lease obligations		117.5		30.8		39.7		22.7		24.3
Purchase obligations		194.3		115.9		35.6		36.2		6.6
Total	$	544.4	$	166.4	$	288.2	$	58.9	$	30.9

See Notes 6 and 8 to the consolidated financial statements for additional disclosures related to long-term debt and lease commitments, respectively. See Note 13 to the consolidated financial statements for the Company’s obligations with respect to its pension and post-retirement medical benefit plans.

FORWARD-LOOKING STATEMENTS

Management’s Discussion and Analysis and other sections of this Annual Report to shareholders should be read in conjunction with the consolidated financial statements and notes thereto. Except for historical information, the statements in this discussion may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 that involve risk and uncertainty, including financial, business environment and projections, as well as statements that are preceded by, followed by, or that include the words “believes,” “expects,” “plans,” “anticipates,” “should” or similar expressions, and other statements contained herein regarding matters that are not historical facts. Additionally, this Annual Report to shareholders contains forward-looking statements relating to future performance, goals, strategic actions and initiatives and similar intentions and beliefs, including without limitation, statements regarding the Company’s expectations, goals, beliefs, intentions and the like regarding future sales, earnings, return on equity, cash flow, share repurchases, capital expenditures, acquisitions and other matters. These statements involve assumptions regarding the Company operations, investments, acquisitions and conditions in the markets the Company serves. Although the Company believes its expectations are based on reasonable assumptions, such statements are subject to risks and uncertainties, including, among others, certain economic, political and technological factors. Actual results could differ materially from those stated or implied in this Annual Report to shareholders, due to, but not limited to, such factors as (1) declining global economic conditions, (2) changes in pricing and the competitive environment and the global demand for our products, (3) fluctuations in foreign currency exchange rates, (4) changes in research funding and the success of research and development activities, (5) dependence on uninterrupted manufacturing operations, (6) changes in the regulatory environment in which the Company operates, (7) changes in worldwide tax rates or tax benefits from domestic and international operations, including the matters described in Note 9 – Income Taxes to the consolidated financial statements, (8) exposure to litigation, including product liability claims, (9) the ability to maintain adequate quality standards, (10) reliance on third party package delivery services, (11) the impact of acquisitions and success in integrating and obtaining projected results from the acquisitions, (12) other changes in the business environment in which the Company operates, and (13) the outcome of the matters described in Note 10 – Contingent Liabilities and Commitments — to the consolidated financial statements. A further discussion of the Company’s risk factors can be found in Item 1A of the Company’s December 31, 2008 Form 10-K. The Company does not undertake any obligation to update these forward-looking statements.

27

Exhibit 13 (continued)

Consolidated Statements of Income

($ In Millions, Except Per Share Data)

	Years ended December 31,
	2008		2007		2006
Net sales	$	2,200.7	$	2,038.7	$	1,797.5
Cost of products sold		1,070.8		1,002.7		877.3
Gross profit		1,129.9		1,036.0		920.2
Selling, general and administrative expenses		561.6		517.1		464.6
Research and development expenses		64.5		59.3		52.9
Operating income		503.8		459.6		402.7
Interest, net		14.3		22.0		24.0
Income before income taxes		489.5		437.6		378.7
Provision for income taxes		148.0		126.5		101.9
Net income	$	341.5	$	311.1	$	276.8
Weighted average number of shares outstanding — Basic (in millions)		126.3		130.6		132.9
Weighted average number of shares outstanding — Diluted (in millions)		128.8		133.1		134.9
Net income per share — Basic	$	2.70	$	2.38	$	2.08
Net income per share — Diluted	$	2.65	$	2.34	$	2.05

The accompanying notes are an integral part of these statements.

28

Exhibit 13 (continued)

Consolidated Balance Sheets

($ In Millions, Except Per Share Data)

	December 31,
	2008			2007
ASSETS
Current assets:
Cash and cash equivalents	$	251.8		$	237.6
Accounts receivable, less allowance for doubtful accounts of $4.1 and $4.4, respectively		269.8			276.3
Inventories		661.8			653.6
Deferred taxes		45.9			57.7
Other current assets		79.9			57.3
Total current assets		1,309.2			1,282.5
Property, plant and equipment:
Land		49.0			51.8
Buildings and improvements		674.6			663.8
Machinery and equipment		757.5			734.8
Construction in progress		41.4			44.9
Less — accumulated depreciation		(862.1	)		(813.8	)
Property, plant and equipment, net		660.4			681.5
Goodwill, net		388.3			420.3
Intangibles, net		120.6			136.9
Other assets		78.0			107.9
Total assets	$	2,556.5		$	2,629.1
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Note payable and current maturities of long-term debt	$	528.8		$	331.3
Accounts payable		114.6			131.0
Accrued payroll and payroll taxes		58.6			55.0
Accrued income taxes		41.1			47.1
Other accrued expenses		50.8			70.6
Total current liabilities		793.9			635.0
Long-term debt		200.1			207.0
Deferred post-retirement benefits		39.5			36.9
Deferred taxes		18.6			42.3
Other liabilities		125.2			91.3
Total liabilities		1,177.3			1,012.5
Stockholders’ equity:
Common stock, $1.00 par value; 300.0 million shares authorized; 201.8 million shares issued at December 31, 2008 and 2007; 122.1 million and 129.4 million shares outstanding at December 31, 2008 and 2007, respectively		201.8			201.8
Capital in excess of par value		133.0			109.7
Common stock in treasury, at cost, 79.7 million and 72.4 million shares at December 31, 2008 and 2007, respectively		(1,935.3	)		(1,534.1	)
Retained earnings		2,954.4			2,679.3
Accumulated other comprehensive income		25.3			159.9
Total stockholders’ equity		1,379.2			1,616.6
Total liabilities and stockholders’ equity	$	2,556.5		$	2,629.1

The accompanying notes are an integral part of these statements.

29

Exhibit 13 (continued)

Consolidated Statements of Stockholders’ Equity

($ In Millions, Except Per Share Data)

	Common Stock		Capital in Excess of Par Value			Common Stock in Treasury			Retained Earnings			Accumulated Other Comprehensive Income/(Loss)			Total Stockholders’ Equity			Comprehensive Income
Balance, December 31, 2005	$	100.9	$	59.0		$	(1,264.4	)	$	2,304.5		$	33.4		$	1,233.4
Net income		—		—			—			276.8			—			276.8		$	276.8
Other comprehensive income —
Foreign currency translation		—		—			—			—			75.6			75.6			75.6
Unrealized gain on securities, net		—		—			—			—			3.4			3.4			3.4
Comprehensive income		—		—			—			—			—			—		$	355.8
Adjustment to initially apply Statement of Financial
Accounting Standards No. 158, net of tax		—		—			—			—			(31.7	)		(31.7	)
Dividends ($.84 per share)		—		—			—			(55.7	)		—			(55.7	)
Shares exchanged for stock options		—		(1.7	)		—			—			—			(1.7	)
Exercise of stock options		—		11.2			25.6			—			—			36.8
Restricted stock grant		—		(0.4	)		1.6			—			—			1.2
Stock-based compensation expense		—		11.0			—			—			—			11.0
Stock repurchases		—		—			(138.2	)		—			—			(138.2	)
Common stock split		100.9		—			—			(100.9	)		—			—
Balance, December 31, 2006		201.8		79.1			(1,375.4	)		2,424.7			80.7			1,410.9
Net income		—		—			—			311.1			—			311.1		$	311.1
Other comprehensive income —
Foreign currency translation		—		—			—			—			71.5			71.5			71.5
Pension and Post Retirement		—		—			—			—			8.4			8.4			8.4
Unrealized gain (loss) on securities, net		—		—			—			—			(0.7	)		(0.7	)		(0.7	)
Comprehensive income		—		—			—			—			—			—		$	390.3
Dividends ($.46 per share)		—		—			—			(60.0	)		—			(60.0	)
Shares exchanged for stock options		—		(0.9	)		—			—			—			(0.9	)
Exercise of stock options		—		17.3			24.0			—			—			41.3
Restricted stock grant		—		0.7			1.6			—			—			2.3
Stock-based compensation expense		—		13.5			—			—			—			13.5
Stock repurchases		—		—			(184.3	)		—			—			(184.3	)
Adjustment to initially apply FIN 48		—		—			—			3.5			—			3.5
Balance, December 31, 2007		201.8		109.7			(1,534.1	)		2,679.3			159.9			1,616.6
Net income		—		—			—			341.5			—			341.5		$	341.5
Other comprehensive income —
Foreign currency translation		—		—			—			—			(86.4	)		(86.4	)		(86.4	)
Pension and Post Retirement		—		—			—			—			(42.2	)		(42.2	)		(42.2	)
Unrealized gain (loss) on securities, net		—		—			—			—			(6.0	)		(6.0	)		(6.0	)
Comprehensive income		—		—			—			—			—			—		$	206.9
Adjustment to initially apply the measurement date features of Statement of Financial Accounting Standards No. 158, net of tax		—		—			—			(1.0	)		—			(1.0	)
Dividends ($.52 per share)		—		—			—			(65.4	)		—			(65.4	)
Shares exchanged for stock options		—		(0.6	)		—			—			—			(0.6	)
Exercise of stock options		—		15.0			18.1			—			—			33.1
Restricted stock grant		—		1.6			1.9			—			—			3.5
Stock-based compensation expense		—		7.3			—			—			—			7.3
Stock repurchases		—		—			(421.2	)		—			—			(421.2	)
Balance, December 31, 2008	$	201.8	$	133.0		$	(1,935.3	)	$	2,954.4		$	25.3		$	1,379.2

Common stock shares issued and common stock shares in treasury are summarized below (in millions):	Common Stock Issued	Common Stock in Treasury
Balance, December 31, 2005	100.9	33.7
Exercise of stock options	—	(0.8	)
Stock repurchases	—	2.0
Common stock split	100.9	34.9
Balance, December 31, 2006	201.8	69.8
Exercise of stock options	—	(1.4	)
Stock repurchases	—	4.0
Balance, December 31, 2007	201.8	72.4
Exercise of stock options	—	(1.0	)
Stock repurchases	—	8.3
Balance, December 31, 2008	201.8	79.7

The accompanying notes are an integral part of these statements.

The share information presented above prior to the December 2006 common stock split has not been restated.

30

Exhibit 13 (continued)

Consolidated Statements of Cash Flows

($ In Millions)

	Years Ended December 31,
	2008			2007			2006
Cash flows from operating activities:
Net income	$	341.5		$	311.1		$	276.8
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		98.6			97.8			90.9
Deferred income taxes		18.1			(21.7	)		(44.1	)
Stock-based compensation expense		12.2			19.0			13.3
Loss on equity investments, net		5.3			0.2			1.8
Other		1.7			(2.6	)		4.4
Changes in assets and liabilities:
Increase in accounts receivable		(4.0	)		(7.3	)		(25.2	)
Increase in inventories		(37.5	)		(25.2	)		(11.5	)
Increase/(decrease) in accrued income taxes		(0.1	)		25.0			(5.4	)
Increase/(decrease) in accrued pension obligation		(20.6	)		2.6			19.6
Other		(11.2	)		18.1			8.2
Net cash provided by operating activities		404.0			417.0			328.8
Cash flows from investing activities:
Property, plant and equipment additions		(89.9	)		(77.6	)		(72.9	)
Proceeds from sales of property, plant and equipment		1.1			1.3			2.8
Proceeds from sale of equity investments		11.6			8.8			—
Acquisitions of businesses, net of cash acquired		(6.1	)		(67.6	)		(20.0	)
Other, net		(3.4	)		(13.9	)		(12.7	)
Net cash used in investing activities		(86.7	)		(149.0	)		(102.8	)
Cash flows from financing activities:
Net issuance of short-term debt		270.5			61.8			45.3
Issuance of long-term debt		—			—			100.0
Repayment of long-term debt		(90.0	)		(69.7	)		(142.8	)
Payment of dividends		(65.4	)		(60.0	)		(55.7	)
Treasury stock purchases		(421.2	)		(184.3	)		(138.2	)
Exercise of stock options		23.8			32.4			30.9
Excess tax benefits from stock-based compensation		8.4			7.8			4.3
Net cash (used in) provided by financing activities		(273.9	)		(212.0	)		(156.2	)
Effect of exchange rate changes on cash		(29.2	)		7.8			5.4
Net change in cash and cash equivalents		14.2			63.8			75.2
Cash and cash equivalents at beginning of year		237.6			173.8			98.6
Cash and cash equivalents at end of year	$	251.8		$	237.6		$	173.8
Supplemental disclosures of cash flow information:
Income taxes paid	$	120.2		$	113.9		$	120.5
Interest paid, net of capitalized interest		23.1			29.6			34.7

The accompanying notes are an integral part of these statements.

31

Exhibit 13 (continued)

Notes To Consolidated Financial Statements

($ In Millions, Except Per Share Data)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Nature of Operations Sigma-Aldrich Corporation (“the Company”) develops, manufactures, purchases and distributes a broad range of high quality biochemicals and organic chemicals throughout the world. These chemical products and kits are used in scientific research, including genomic and proteomic research, biotechnology, pharmaceutical development and as key components in pharmaceutical, diagnostic and other high technology manufacturing.

Principles of Consolidation The consolidated financial statements include the accounts of the Company and all majority-owned subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Financial Instruments The Company has no financial instruments that have a materially different fair value than the respective instrument’s carrying value, except as described in Notes 6 and 7.

Revenue Revenue, which includes shipping and handling fees billed to customers, is recognized upon transfer of title of the product to the customer, which generally occurs upon shipment to the customer, and is not dependent upon any post-shipment obligations.

Research and Development Expenditures relating to the development of new products and processes, including significant improvements to existing products or processes, are expensed as incurred as research and development.

Cash and Cash Equivalents Cash and cash equivalents include cash on hand and investments with original maturities of less than three months.

Property, Plant and Equipment The cost of property, plant and equipment is depreciated over the estimated useful lives of the assets using the straight-line method with lives ranging from three to twelve years for machinery and equipment and fifteen to forty years for buildings and improvements. Depreciation expense was $87.1, $86.1, and $80.0 for the years ended December 31, 2008, 2007 and 2006, respectively. The Company capitalizes interest as part of the cost of constructing major facilities and equipment.

Goodwill Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” requires the Company to assess goodwill for impairment rather than to systematically amortize goodwill against earnings. The goodwill impairment test compares the fair value of a reporting unit to its carrying amount, including goodwill. The Company operates as one reporting unit and its fair value exceeds its carrying value, including goodwill. Therefore, the Company has determined that no impairment of goodwill existed at December 31, 2008 and 2007.

Long-Lived Assets Long-lived assets are reviewed for impairment whenever conditions indicate that the carrying value of assets may not be fully recoverable. Such impairment tests are based on a comparison of the undiscounted cash flows prior to income taxes to the recorded value of the asset. If impairment is indicated, the asset value is written down to its fair market value if readily determinable or using discounted cash flows. Any significant unanticipated changes in business or market conditions that vary from current expectations could have an impact on the fair market value of these assets and any potential associated impairment.

Foreign Currency Translation Assets and liabilities denominated in foreign currencies are translated at current exchange rates and profit and loss accounts are translated at weighted average exchange rates. Resulting translation gains and losses are included as a separate component of stockholders’ equity in accumulated other comprehensive income or loss.

Use of Estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the years presented. Actual results could differ from those estimates under different assumptions or conditions.

Common Stock Split In November 2006, the Board of Directors authorized a two-for-one stock split effected in the form of a 100 percent stock dividend to shareholders of record on December 15, 2006. Shareholders of record received an additional share on January 2, 2007 for each share they owned. The par value of the Company’s common stock remains $1.00 per share. The stock split is reflected in the Consolidated Statements of Stockholders’ Equity as a reclassification from Retained Earnings to Common Stock. Except as otherwise noted, all share and per share information presented prior to 2007 herein has been retroactively adjusted to reflect the common stock split.

Reclassifications The accompanying consolidated financial statements for prior years contain certain reclassifications to conform with the presentation used in 2008.

Effect of New Accounting Standards In September 2006, the FASB issued Statement of Financial Accounting Standards No. 158, “Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans” (SFAS 158). SFAS 158 requires companies to recognize, on a prospective basis, the funded status of their defined benefit pension and other post-retirement benefit plans in the Consolidated Balance Sheets and recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise during the period but are not recognized as components of the net periodic benefit costs. SFAS 158 also requires additional disclosures in the notes to the consolidated financial statements and the use of a company’s fiscal year-end as the measurement date for plan assets and benefit obligations, eliminating the use of earlier measurement dates that were previously permissible. The Company adopted all provisions of SFAS 158 as of December 31, 2006, except the measurement date requirement. The net impact of applying SFAS 158 on the Company’s 2006 consolidated financial statements was a $31.7 reduction of stockholders’ equity. The new measurement date requirement is effective for fiscal years ending after December 15, 2008. The adoption of the measurement date provision did not have a significant impact on the consolidated financial statements.

32

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), “Business Combinations” (SFAS 141(R)). SFAS 141(R) establishes principles and requirements for how an acquiring entity recognizes and measures in its financial statements the assets acquired and liabilities assumed. SFAS 141(R) also establishes disclosure requirements to enable the evaluation of the nature and financial effects of the business combination. The effective date for this statement is fiscal years beginning after December 15, 2008, and will be applied prospectively to acquisitions beginning January 1, 2009. The Company does not expect the impact of SFAS 141(R) on its consolidated financial statements to be significant.

In December 2007, the EITF reached a consensus on EITF Issue No. 07-1, “Accounting for Collaborative Arrangements” (EITF 07-1). EITF 07-1 addresses the accounting for activities of collaborative arrangements outside of an established separate legal entity, such as those to jointly develop and commercialize intellectual property. Under EITF 07-1, revenues and costs incurred with third parties in connection with the collaborative arrangement should be presented gross or net based on the criteria in EITF Issue No. 99-19, “Reporting Revenue Gross as Principal versus Net as an Agent” and other applicable accounting literature. The consensus is effective for fiscal years beginning after December 15, 2008, and will be applied to using a retrospective method that requires reclassification in all periods presented for those arrangements still in effect at January 1, 2009. The Company does not expect the impact of EITF 07-1 on its consolidated financial statements to be significant.

In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (FSP FAS 142-3). FSP FAS 142-3 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FASB Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (SFAS 142). The intent of FSP FAS 142-3 is to improve the consistency between the useful life of a recognized intangible asset under SFAS 142 and the period of expected cash flows used to measure the fair value of the asset under SFAS 141(R). FSP FAS 142-3 is effective for fiscal years beginning after December 15, 2008. The Company does not expect the impact of FSP FAS 142-3 on its consolidated financial statements to be significant.

In December 2008, the FASB issued FASB Staff Position (FSP) No.132 (R)-1, “Employers’ Disclosures about Pensions and Other Postretirement Benefits” (FSP 132(R)-1). FSP 132(R)-1 provides additional guidance regarding disclosures about plan assets of defined benefit pension or other postretirement plans. FSP 132(R)-1 is effective for fiscal years ending after December 15, 2009. The Company does not expect the impact of FSP FAS 132(R)-1 on its consolidated financial statements to be significant.

NOTE 2: ALLOWANCE FOR DOUBTFUL ACCOUNTS

Changes in the allowance for doubtful accounts for the years ended December 31, 2008, 2007 and 2006 are as follows:

	2008		2007
Balance, beginning of year	$	4.4	$	4.7
Additions to reserves		1.4		0.5
Deductions from reserves		1.7		0.8
Balance, end of year	$	4.1	$	4.4

NOTE 3: INVENTORIES

The principal categories of inventories at December 31, 2008 and 2007 are as follows:

	2008		2007
Finished goods	$	566.9	$	542.8
Work in process		27.2		29.1
Raw materials		67.7		81.7
Total	$	661.8	$	653.6

Inventories are valued at the lower of cost or market. Costs for 75% of inventories are determined using a weighted average actual cost method. Costs for 25% of inventories are determined using the last-in, first-out method. If the value of all last-in, first-out inventories had been determined using the weighted average actual cost method, inventories would have been $1.3, $0.7, and $0.4 higher than reported at December 31, 2008, 2007 and 2006, respectively.

The Company regularly reviews inventories on hand and records a provision for slow-moving and obsolete inventory, inventory not meeting quality standards and inventory subject to expiration. The provision for slow-moving and obsolete inventory is based on current estimates of future product demand, market conditions and related management judgment. Any significant unanticipated changes in future product demand or market conditions that vary from current expectations could have an impact on the value of inventories.

33

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 4: INTANGIBLE ASSETS

The Company’s amortizable and unamortizable intangible assets at December 31, 2008 and 2007 are as follows:

	Cost				Accumulated Amortization
	2008		2007		2008		2007
Amortizable intangible assets:
Patents	$	16.7	$	16.6	$	6.6	$	5.6
Licenses		20.1		19.1		5.8		4.6
Customer relationships		95.1		100.9		23.1		17.6
Technical knowledge		21.1		22.6		5.6		4.3
Other		12.5		12.7		11.4		11.0
Total amortizable intangible assets	$	165.5	$	171.9	$	52.5	$	43.1
Unamortizable intangible assets:
Goodwill	$	414.2	$	446.6	$	25.9	$	26.3
Trademarks and trade names		15.4		15.9		7.8		7.8
Total unamortizable intangible assets	$	429.6	$	462.5	$	33.7	$	34.1

The purchase price paid in cash for acquired intangible assets is based upon their estimated fair values at the date of acquisition. The Company added $2.2 of acquired amortizable intangible assets during 2008, including adjustments for the finalization of the purchase accounting allocation of various insignificant acquisitions.

The Company recorded amortization expense of $11.5, $11.7, and $10.9, for the years ended December 31, 2008, 2007 and 2006, respectively, related to amortizable intangible assets with estimated useful lives ranging from one to twenty years using a straight-line method. The Company expects to record annual amortization expense for all existing intangible assets in a range from approximately $10.0 to $11.0 from 2009 through 2013.

Changes in net goodwill for the years ended December 31, 2008 and 2007 are as follows:

	2008			2007
Balance, beginning of year	$	420.3		$	361.3
Acquisitions		(0.7	)		51.7
Impact of foreign exchange rates		(31.3	)		7.3
Balance, end of year	$	388.3		$	420.3

NOTE 5: NOTES PAYABLE

The Company has a $200.0 seven-year multi-currency European revolving credit facility with a syndicate of banks having a maturity date of March 13, 2014. The facility can be used for general purposes, including acquisitions, by certain European subsidiaries. At December 31, 2008, borrowings outstanding in U.S. dollars (USD) were $135.9 at a weighted average interest rate of 0.6%. At December 31, 2007, borrowings outstanding in USD were $56.5 at a weighted average interest rate of 3.2%. This facility contains financial covenants that require the maintenance of consolidated net worth of at least $750.0 and a consolidated ratio of debt to total capital of no more than 55.0%. The Company’s consolidated net worth and consolidated total debt as a percentage of total capitalization, as defined in the credit facility, were $1,286.9 and 36.2%, respectively, at December 31, 2008.

The Company has a $450.0 five-year revolving credit facility with a syndicate of banks in the U.S. under which $30.0 will mature on December 11, 2011 and $420.0 will mature on December 11, 2012. The facility supports the Company’s commercial paper program. At December 31, 2008 and 2007, the Company did not have any borrowings outstanding under this facility. The syndicated facility contains financial covenants that require the maintenance of consolidated net worth of at least $750.0 and a ratio of consolidated debt to total capitalization of no more than 55%. The Company’s consolidated net worth and total consolidated debt as a percentage of total capitalization, as defined in the credit facility, were $1,286.9 and 36.2%, respectively, at December 31, 2008.

At December 31, 2008, $378.7 of commercial paper was outstanding with a weighted average interest rate of 0.5%. At December 31, 2007, $171.2 of commercial paper was outstanding with a weighted average interest rate of 4.3%.

Sigma-Aldrich Korea Limited has a short-term credit facility denominated in Korean Won expiring on March 11, 2009. The total commitment converted into U.S. Dollars (USD) was $15.8 at December 31, 2008. The borrowings bear interest based on the Korean market rate plus an incremental margin based upon the Company’s credit rating. At December 31, 2008, borrowings outstanding in USD were $5.1 at an average interest rate of 6.2%. At December 31, 2007, borrowings outstanding in USD were $11.8 at an average interest rate of 6.4%.

The Company has provided guarantees for any outstanding borrowings from the European revolving credit facility and the short-term credit facility of the wholly-owned Korean subsidiary described above. There are no existing events of default that would require the Company to honor these guarantees. The borrowings subject to these guarantees are reflected in the consolidated financial statements.

The Company has other short-term credit facilities denominated in foreign currencies, excluding those mentioned above, with a total commitment converted into USD of $25.5 at December 31, 2008. Borrowings outstanding under the facilities were $2.2 and $1.8, with a weighted average interest rate of 1.5% and 1.4% at December 31, 2008 and 2007, respectively.

34

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 6: LONG-TERM DEBT

Long-term debt consists of the following at December 31, 2008 and 2007:

	2008			2007
7.687% Senior Notes, due September 12, 2010	$	100.0		$	100.0
5.11% Senior Notes, due December 5, 2011		100.0			100.0
Medium-Term Notes, due February 23, 2008		—			90.0
Other		7.0			7.0
Total		207.0			297.0
Less — Current maturities		(6.9	)		(90.0	)
	$	200.1		$	207.0

The Company, at its option, may redeem all or any portion of the $100.0 of 7.687% Senior Notes by notice to the holder and by paying a make whole amount to the holder as compensation for loss of future interest income. The 7.687% Senior Notes contain financial covenants that require the maintenance of consolidated net worth of at least $750.0, a ratio of consolidated debt to total capitalization of no more than 55% and an aggregate amount of all consolidated priority debt no more than 30% of consolidated net worth. Consolidated priority debt includes all unsecured debt of any subsidiary in which a majority of the voting shares are owned by the Company. The Company’s consolidated net worth, consolidated debt as a percentage of total capitalization and consolidated priority debt as a percentage of consolidated total net worth as defined in the 7.687% Senior Notes was $1,286.9, 36.2% and 10.4%, respectively, at December 31, 2008.

The Company, at its option, may redeem all or any portion of the $100.0 of 5.11% Senior Notes by notice to the holder and by paying a make whole amount to the holder as compensation for loss of future interest income. The 5.11% Senior Notes contain financial covenants that require a ratio of consolidated debt to total capitalization of no more than 60% and an aggregate amount of all consolidated priority debt no more than 30% of consolidated net worth. The Company’s consolidated debt as a percentage of total capitalization and consolidated priority debt as a percentage of total consolidated net worth as defined in the 5.11% Senior Notes was 34.6% and 9.8%, respectively, at December 31, 2008.

The Medium-Term Notes due February 23, 2008 were issued in February 2005 as a component of the $300.0 credit agreement entered into with a syndicate of banks in the U.S. to partially fund acquisitions and provide for working capital requirements. These notes were fully paid at maturity on February 25, 2008. At December 31, 2007, borrowings outstanding under the three-year term were $90.0 with a weighted average interest rate of 5.4%.

Total interest expense incurred on short-term and long-term debt, net of amounts capitalized, was $21.0, $28.9, and $31.4 in 2008, 2007, and 2006, respectively.

The fair value of long-term debt, including current maturities, was approximately $221.4 and $306.1 at December 31, 2008 and 2007, respectively, based upon a discounted cash flow analysis using current market interest rates.

NOTE 7: FINANCIAL DERIVATIVES AND RISK MANAGEMENT

The Company transacts business in many parts of the world and is subject to risks associated with changing foreign currency exchange rates. The Company’s objective is to minimize the impact of foreign currency exchange rate changes during the period of time between the original transaction date and its cash settlement. Accordingly, the Company enters into forward currency exchange contracts in order to stabilize the value of certain receivables and payables denominated in foreign currencies. The Company does not enter into foreign currency transactions for speculative trading purposes. The Company’s policy is to manage the risks associated with existing receivables, payables and commitments.

The principal forward currency exchange contracts are for the British pound, Euro, Swiss franc, Japanese yen, Indian rupee and Canadian dollar. These contracts are recorded at fair value and are included in other current assets. Resulting gains and losses are recorded in selling, general and administrative expenses and are partially or completely offset by changes in the value of related exposures. The duration of the contracts typically does not exceed six months.

The Company continues to assess the potential impact of recent trends in the global economic environment on the availability of and its access to these forward currency exchange contracts in the open market, as well as the ability of the counterparties to meet their obligations. Based on the relative stability of the significant foreign currencies utilized by the Company, management does not believe that a significant risk exists of these forward contracts becoming unavailable in the global marketplace within the next 12 months.

The notional amount, which approximates fair value, of open forward exchange contracts at December 31, 2008 and 2007 was $210.1 and $167.7, respectively.

NOTE 8: LEASE COMMITMENTS

The Company and its subsidiaries lease manufacturing, office and warehouse facilities and computer equipment under non-cancelable operating leases expiring at various dates. Rent charged to operations was $41.4, $36.6, and $32.9 in 2008, 2007 and 2006, respectively. Minimum rental commitments for non-cancelable leases in effect at December 31, 2008, are as follows:

2009	$	30.8
2010		22.7
2011		17.0
2012		12.4
2013		10.3
2014 and thereafter		24.3

35

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 9: INCOME TAXES

The components of income before income taxes consisted of the following for the years ended December 31:

	2008		2007		2006
United States operations	$	321.4	$	286.6	$	270.0
International operations		168.1		151.0		108.7
Total income before taxes	$	489.5	$	437.6	$	378.7

The provision for income taxes consists of the following for years ended December 31:

	2008			2007			2006
Current:
Federal	$	110.2		$	82.1		$	82.9
State and local		7.2			7.4			6.2
International		38.3			58.9			54.5
Total current		155.7			148.4			143.6
Deferred:
Federal		(9.2	)		(13.8	)		(24.8	)
State and local		0.7			(0.5	)		(1.1	)
International		0.8			(7.6	)		(15.8	)
Total deferred		(7.7	)		(21.9	)		(41.7	)
Provision for income taxes	$	148.0		$	126.5		$	101.9

The items accounting for the difference between income taxes computed at the U.S. federal statutory rate and the Company’s effective tax rate are as follows for years ended December 31:

	2008		2007		2006
Statutory tax rate	35.0	%	35.0	%	35.0	%
EIE benefit	—		—		(1.9	)
U.S. manufacturing deduction	(1.3	)	(2.1	)	(0.7	)
State and local income taxes, net of federal benefit	1.0		1.0		0.8
Research and development credits	(0.7	)	(0.8	)	(0.8	)
International taxes	(4.8	)	(4.9	)	(3.6	)
Tax audits and unrecognized tax positions	0.2		—		(2.3	)
Other, net	0.8		0.7		0.4
Total effective tax rate	30.2	%	28.9	%	26.9	%

The Extraterritorial Income Exclusion (EIE) on the Company’s U.S. export sales which provided a benefit in 2006 was eliminated for subsequent years as a result of the phase-out of this benefit in the American Jobs Creation Act of 2004 (AJCA). U.S. manufacturing deduction benefits in 2007 and in 2008 are the result of the phase-in of the new benefits on U.S. manufacturing income provided in the AJCA. The international taxes benefit is primarily the result of lower statutory tax rates for our international operations and international restructurings. The tax audits and unrecognized tax positions, which provided a net benefit from audit activity in 2006, reflects the absence of net benefits in 2007 and 2008.

Undistributed earnings of the Company’s international subsidiaries amounted to approximately $443.0 at December 31, 2008. Upon distribution of those earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes (subject to an adjustment for foreign tax credits) and withholding taxes payable to various foreign countries. The Company may periodically make distributions from its international subsidiaries to its U.S. parent. These distributions will only be made at such time that they are deemed to be tax efficient. The Company does not anticipate any significant increase to its U.S. tax liability above that which has been previously recorded.

Deferred income tax provisions reflect the effect of temporary differences between consolidated financial statement and tax reporting of income and expense items. The net deferred tax assets/liabilities at December 31, 2008 and 2007, respectively, result from the following temporary differences:

	2008			2007
Deferred tax assets:
Inventories	$	32.8		$	45.8
Net operating loss carryforwards		27.7			25.5
Post-retirement benefits and other employee benefits		39.3			32.8
Amortization		27.8			20.2
Pension benefits		11.4			3.4
Other		5.2			6.2
Total deferred tax assets		144.2			133.9
Deferred tax liabilities:
Property, plant and equipment		(74.8	)		(72.2	)
Total deferred tax liabilities		(74.8	)		(72.2	)
Net deferred tax assets (liabilities)	$	69.4		$	61.7

The net operating loss carryforwards relate to international operations. At December 31, 2008, $16.0 of these deferred tax assets expire in 2012 and the remainder of these assets have no expiration. The Company believes it will have sufficient taxable income to fully utilize the carryforwards prior to expiration.

Deferred tax assets and liabilities in the preceding table, netted by taxing jurisdiction, are included in the following captions in the Consolidated Balance Sheets at December 31:

	2008			2007
Deferred tax assets	$	45.9		$	57.7
Other assets		43.6			54.4
Other accrued expenses		(1.5	)		(8.1	)
Deferred tax liabilities		(18.6	)		(42.3	)
Net deferred tax assets (liabilities)	$	69.4		$	61.7

Uncertainty in Income Taxes The Company adopted the provisions of FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standard No. 109” (FIN 48) on January 1, 2007. As a result of adoption, the Company decreased its unrecognized tax positions by $3.5 with the offset to retained earnings resulting in a balance of $33.5 of unrecognized tax benefits in the consolidated financial statements as of January 1, 2007.

36

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 9: INCOME TAXES (continued)

The Company and its subsidiaries file income tax returns for U.S. federal taxes, and for various state, local and international taxes, as applicable. The Company is no longer subject to U.S. federal income tax examination for years prior to 2005 and, with limited exceptions, for any state, local and international income tax examinations prior to 2004 as of December 31, 2008.

The following table sets forth changes in our total gross unrecognized tax benefits, excluding interest and penalties, for the year ended December 31:

	2008			2007
Balance, beginning of year	$	32.1		$	33.5
Tax positions related to current year:
Additions		4.1			4.4
Reductions		(0.2	)		—
Tax positions related to prior year:
Additions		4.2			0.6
Reductions		(6.2	)		(4.4	)
Settlements		(1.8	)		—
Lapse in statutes of limitations		—			(2.0	)
Balance, end of year	$	32.2		$	32.1

Approximately $19.5 and $20.5 of the total gross unrecognized tax benefits reported as of December 31, 2008, and 2007, respectively, if recognized, would affect our effective tax rate in the future periods.

The Company believes it is reasonably possible that the unrecognized tax benefits at December 31, 2008 may decrease by approximately $5.0 due to the completion of examinations and the expiration of statutes in several jurisdictions within 12 months of December 31, 2008.

The Company recognizes interest accrued, net of tax, and penalties related to unrecognized tax benefits as components of our income tax provision as applicable. The Company had accrued approximately $6.3 and $6.5 for payment of interest, net of tax, and penalties as of December 31, 2008 and 2007, respectively.

NOTE 10: CONTINGENT LIABILITIES AND COMMITMENTS

The Company is involved in legal proceedings generally incidental to its business, as described below:

Insurance and Other Contingent Liabilities and Commitments The Company is a defendant in several lawsuits and claims related to the normal conduct of its business, including lawsuits and claims related to product liability and personal injury matters. The Company accrues for such liabilities when it is probable that future costs (including legal fees and expenses) will be incurred and such costs can be reasonably estimated. The Company has self-insured retention limits and has obtained insurance to provide coverage above the self-insured limits for product liability and personal injury claims, subject to certain limitations and exclusions. Reserves have been provided to cover expected payments for these self-insured amounts at December 31, 2008.

In one group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing similar products, is a defendant in multiple claims alleging injuries from exposure to various chemicals by a limited number of employees of one electronics manufacturer. These claims have been filed in three states. A global settlement has been reached for all cases, which will be submitted to the court for approval. The settlement is not significant to the Company’s consolidated financial statements.

In another group of lawsuits and claims, the Company provided a product for use in research activities in developing various vaccines at pharmaceutical companies. The Company, together with other manufacturers and distributors offering the same product and several pharmaceutical companies, has been named as a defendant and served in 294 lawsuits, of which 59 lawsuits have been dismissed to date. Several of the outstanding suits have been stayed by various state and federal courts pending a decision on coverage available under a U.S. federal government relief program. No definite date has been set for this decision. In all cases, the Company believes its products in question were restricted to research use and that proper information for safe use of the products was provided to the customer.

In another group of lawsuits and claims, the Company, as well as others engaged in manufacturing and distributing flavoring products, is a defendant in multiple claims alleging personal injuries from exposure to the products. The Company has been named as a defendant and served in 14 lawsuits, 2 of which have been dismissed. These claims have been filed in four states. On November 4, 2008 a settlement, which was not material to the Company’s consolidated financial condition, results of operations or liquidity, was reached in one case. Additionally, the Company believes the settlement reached does not change its position as it relates to other claims in this group. The Company is vigorously defending its rights as to the remaining claims. The Company believes it is covered by insurance for the above matters, subject to its self-insurance retention limits.

A class action complaint was filed against a subsidiary of the Company in the Montgomery County, Ohio Court of Common Pleas related to a 2003 explosion in a column at the Company’s Isotec facility in Miamisburg, Ohio. The case was separated into the following four phases: phase one — existence of liability, phase two — quantification of any compensatory damages, phase three — existence of any punitive damages and phase four — quantification of any punitive damages. Class certification was granted to phases one, three and four, but denied to phase two. Compensatory damages for all plaintiffs must be established before the case can proceed to the punitive damages phases.

The Company has accepted responsibility for phase one, existence of liability. The case is currently in the compensatory damages phase, where, because no class status exists, each plaintiff must individually establish actual damages. The initial phase two, compensatory damages trial, for 31 plaintiffs was

37

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 10: CONTINGENT LIABILITIES AND COMMITMENTS (continued)

completed on April 27, 2007 with a jury verdict establishing actual damages of approximately two hundred dollars per plaintiff. The plaintiffs filed an appeal staying further action on the case until the appeal has been resolved. The appellate court granted in part and denied in part plaintiffs’ appeal on evidentiary rulings and jury instructions, and the Company has appealed some elements of that decision to the Ohio Supreme Court. The Company continues to believe it has substantial legal defenses to the allegations, which it will vigorously assert.

The Company believes its reserves and insurance are sufficient to provide for claims outstanding at December 31, 2008. While the outcome of the current claims cannot be predicted with certainty, the possible outcome of the claims is reviewed at least quarterly and reserves adjusted as deemed appropriate based on these reviews. Based on current information available, the Company believes that the ultimate resolution of these matters will not have a material adverse effect on its consolidated financial condition, results of operations or liquidity. Future claims related to the use of these categories of products may not be covered in full by the Company’s insurance program.

At December 31, 2008, there were no other known contingent liabilities that management believes could have a material adverse effect on the Company’s consolidated financial condition or results of operations, nor were there any material commitments outside of the normal course of business. Material commitments in the normal course of business include notes payable, long-term debt, lease commitments and pension and other post-retirement benefit obligations which are disclosed in Note 5, Note 6, Note 8 and Note 13, respectively, to the consolidated financial statements for the year ended December 31, 2008.

NOTE 11: COMMON STOCK

The Company’s 2003 Long-Term Incentive Plan (2003 LTIP), permits the granting of incentive or nonqualified stock options as well as stock appreciation rights, performance shares, restricted stock and other stock-based awards. The 2003 LTIP permits the distribution of up to 11,000,000 shares of the Company’s common stock, subject to increase for any shares forfeited under the other plans after the effective date of the 2003 LTIP. Shares issued under the 2003 LTIP may be authorized and unissued shares or treasury shares. This plan permits the award of non-qualified stock options to those members of the Board of Directors who are not employees of the Company. Under this plan, a non-employee Director will receive an initial option to purchase 20,000 shares of common stock on the date of his or her initial election as a Director. Additional awards of options to purchase 10,000 shares are made to each eligible Director on the day after each annual shareholders’ meeting if the non-employee Director has served on the Board of Directors for at least six months. Under this plan, incentive stock options may only be granted to employees of the Company or its subsidiaries, and a participant may not hold incentive stock options with a fair market value, determined as of the grant date, in excess of $0.1 in the year in which they are first exercisable if this limitation is necessary to qualify the option as an incentive stock option. Incentive and nonqualified stock options may not have an option price of less than the fair market value of the shares at the date of the grant. Options generally become exercisable from three months to three years following the grant date and expire ten years after the grant date. Including shares forfeited or swapped, 4,085,547 shares of the Company’s common stock remain to be awarded at December 31, 2008 under this plan.

As of December 31, 2008, the Company expects $17.3 of unrecognized expense related to nonvested stock-based compensation arrangements granted to be incurred in future periods. This expense is expected to be recognized over a weighted average period of 1.4 years.

Stock-based compensation expense charged against income is included in selling, general and administrative expenses. The stock-based compensation expense, net of tax of $3.1 and $4.1 for the years ended December 31, 2008 and 2007 was $9.1 and $14.9, respectively.

Stock Options The Company measures the total fair value of options on the grant date using the Black-Scholes option-pricing model. The Company then recognizes each grant’s total cost over the period that the options vest based on its calculated fair value. During the year ended December 31, 2008, the Company granted a total of 507,350 stock options under the 2003 LTIP.

The weighted-average assumptions under the Black-Scholes option-pricing model for stock option grants are as follows:

	2008		2007		2006
Expected term (years)	4.7		5.9		6.0
Expected volatility	19.19	%	25.12	%	27.84	%
Risk-free interest rate	2.72	%	4.68	%	5.01	%
Dividend yield	1.03	%	1.18	%	1.22	%

Expected term — The expected term of the options represents the period of time between the grant date of the options and the time the options are either exercised or forfeited, including an estimate of future forfeitures for outstanding options. In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 107, the Company has used the “simplified” method for “plain vanilla” options to estimate the expected term of options granted prior to 2008.

Expected volatility — The expected volatility is calculated based on an average of the historical volatility of the Company’s stock price for a period approximating the expected term.

Risk-free interest rate — The risk-free interest rates are based on the U.S. Treasury yield curve in effect at the time of grant and a maturity that approximates the expected term.

Dividend yield — The dividend yield is based on the Company’s authorized quarterly dividend, approved by the Board of Directors during the respective periods noted above, and the Company’s expectation for dividend yields over the expected term.

38

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 11: COMMON STOCK (continued)

The following table presents activity for the Company’s stock option plans, including the 2003 LTIP, the Stock Option Plan of 2000, the 1998 Directors’ Non-Qualified Share Option Plan, the Share Option Plan of 1995 and the Stock Option Plan of 1987. A summary of the combined stock option activity and other data for the Company’s stock option plans for the year ended December 31, 2008 is as follows:

	Number of Stock Options		Wtd. Avg. Exercise Price Per Share		Wtd. Avg. Remaining Contractual Life	Aggregate Intrinsic Value
Stock Options outstanding, January 1, 2008	7,212,496		$	28.66	—		—
Granted	507,350			52.89	—		—
Exercised	(1,058,500	)		23.07	—		—
Forfeited	(84,565	)		32.44	—		—
Stock Options outstanding, December 31, 2008	6,576,781		$	31.38	68.93 months	$	77.06
Stock Options exercisable at December 31, 2008	5,295,252		$	28.66	61.81 months	$	73.75

The aggregate intrinsic value of options exercised during the year ended December 31, 2008, 2007 and 2006 was $35.6, $31.9, and $20.2, respectively. The weighted average grant date fair value of options granted during the year ended December 31, 2008, 2007 and 2006 was $9.96, $12.58, and $11.25 per share, respectively.

Performance Units Performance Unit awards in 2008, 2007, and 2006 were 319,845, 193,580, and 174,480 units, respectively. The Performance Units awarded in 2008, 2007, and 2006 contain a three-year service period and vest beginning on the grant date and ending on December 31, 2010, 2009, and 2008, respectively. The actual Performance Units awarded are determined at the end of the performance period with possible payouts ranging from 0% to 150% of the target amount based upon the achievement of specified performance criteria. One-half of the awards issued are based upon the Company’s three-year average return on equity ratio calculation and one-half of the awards are based upon the Company’s three-year average sales growth (adjusted for currency, but including acquisitions). Each Performance Unit paid will include one-half share of the Company’s common stock and the cash equivalent of one-half share of the Company’s common stock, except that the Company will direct that any fractional shares of stock be paid in cash. The value of the equity portion of a Performance Unit is equivalent to the closing market price of the Company’s stock on the grant date. The Company will expense the expected cost of the equity portion over the vesting period beginning on the grant date and ending on December 31 of the third subsequent fiscal year. The value of the Performance Unit to be paid in cash is determined based on the closing market price of the Company’s stock at each quarter-end and ratably expensed during the remaining performance period. Therefore, the related stock-based compensation expense will fluctuate with the value of the Company’s stock. The expense for the entire number of Performance Units awarded is dependant upon the probability of achieving the specific financial targets and is recorded ratably over the vesting period.

A summary of the Company’s nonvested Performance Units as of December 31, 2008, and changes during the year then ended, is reflected in the table below. The Weighted Average Grant Date Fair Value includes both the fair value at grant date for the equity portion of the Performance Unit and the fair value of the cash portion of the Performance Unit.

	Number of Performance Units		Wtd. Avg. Grant Date Fair Value
Nonvested Performance Units outstanding, January 1, 2008	313,243		$	46.00
Granted	319,845			57.24
Vested (1)	(99,243	)		36.94
Forfeited (2)	(99,818	)		43.87
Nonvested Performance Units outstanding, December 31, 2008	434,027			47.43

(1) Represents the entire amount of performance units which vested during the year ended December 31, 2008, all of which were outstanding as of December 31, 2008.

(2) Includes the reduction to the number of units for the expected payout based on the specified performance criteria at the end of the performance period, December 31, 2008, for the 2006 and 2007 awards at less than 100%.

The weighted average grant date fair value of performance units granted during the year ended December 31, 2008, 2007, and 2006 was $57.24, $40.45 and $32.50, respectively.

Stock Awards On January 2, 2009, 2008, and 2007 each non-employee Director received an additional 1,200 shares of Company stock. The 2009 stock award will be expensed in the first quarter of 2009 based on the fair market value of the Company’s common stock at December 31, 2008. The 2008 stock award was expensed in the first quarter of 2008 based on the fair market value of the Company’s common stock at December 31, 2007. The 2007 stock award was expensed in the first quarter of 2007 based on the fair market value of the Company’s common stock at December 31, 2006.

Restricted Stock Awards On November 17, 2008, the Company issued to certain executives 18,632 shares of restricted stock with a weighted average grant date fair value of $39.58, based on the fair market value of the Company’s common stock at November 17, 2008. These shares will be expensed over a three-year vesting period beginning on the date of grant.

Common Stock Purchase Rights The Company has outstanding one common share purchase right (a “Right”) for each outstanding share of common stock of the Company. Generally, if any person or group acquires 15% or more of the Company’s outstanding voting stock without prior written consent of the Company’s Board of Directors, these Rights become exercisable (except for rights held by the acquiring person).

39

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 12: COMPANY OPERATIONS BY BUSINESS UNIT

The Company is organized into four business units featuring the Research units of Essentials, Specialties and Biotech and the Fine Chemicals unit, SAFC, to align the Company with the customers it serves. The business unit structure is the Company’s approach to serving customers and reporting sales rather than any internal division used to allocate resources. Net sales for the Company’s business units are as follows:

	2008	2007		2006
Research Essentials	420.9	$	390.7	$	355.3
Research Specialties	824.1		753.5		669.7
Research Biotech	332.2		302.0		276.8
Research Chemicals	1,577.2		1,446.2		1,301.8
SAFC	623.5		592.5		495.7
Total	2,200.7	$	2,038.7	$	1,797.5

Sales are attributed to countries based upon the location of product shipped. The United States sales to unaffiliated customers presented in the summary below include sales to international markets as follows:

Year	Amount		Year	Amount		Year	Amount
2008	$	31.5	2007	$	30.5	2006	$	35.0

Geographic financial information is as follows:

	2008		2007		2006
Net sales to unaffiliated customers:
United States	$	794.6	$	756.3	$	715.4
United Kingdom		176.6		212.7		187.6
Germany		225.0		187.6		160.9
Other International		1,004.5		882.1		733.6
Total	$	2,200.7	$	2,038.7	$	1,797.5
Long-lived assets at December 31:
United States	$	470.6	$	466.3	$	433.1
International		259.1		268.7		257.9
Total	$	729.7	$	735.0	$	691.0

NOTE 13: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS

The Company maintains several retirement plans covering substantially all U.S. employees and employees of certain international subsidiaries. Pension benefits are generally based on years of service and compensation. The Company also maintains post-retirement medical benefit plans covering some of its U.S. employees. Benefits are subject to deductibles, co-payment provisions and coordination with benefits available under Medicare. The Company has made a determination regarding the effects of the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) that the prescription drug benefits it provides will be actuarially equivalent to the benefits provided under the Act. This determination was based on an analysis of the benefits and participant contributions for a particular participant group and comparing them to the benefits and contributions for the Medicare Part D standard benefit package. Retiree groups were assumed to be actuarially equivalent where the actuarial net value of the benefit/contribution package was greater than the Medicare Part D standard benefit package. The estimated benefit of the subsidy resulting from the Act was incorporated as an actuarial gain into the measurement of the Plan obligation as of the November 30, 2007 measurement date and updated as of the new December 31, 2008 measurement date. The impact of the Act was not significant on the Company’s post-retirement benefit expense in any year presented. The Company may amend any of the plans periodically to reflect legislative or other benefit changes.

40

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 13: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

The following chart summarizes the Consolidated Balance Sheet impact, as well as the benefit obligations, assets and funded status of the pension and post-retirement medical benefit plans:

	Pension Plans												Post-Retirement
	United States						International						Medical Benefit Plans
	2008			2007			2008			2007			2008			2007
Reconciliation of funded status of the plans and the amounts included in the Company’s Consolidated Balance Sheets at December 31:
Change in benefit obligations
Beginning obligations	$	99.2		$	95.8		$	186.7		$	173.2		$	38.9		$	40.6
Adjustments due to adoption of FAS 158		0.3			n/a			1.2			n/a			0.2			n/a
Service cost		5.8			5.4			8.0			8.8			1.0			1.1
Interest cost		6.0			5.1			7.9			6.3			2.4			2.2
Plan participant contributions		—			—			2.6			2.4			0.7			0.7
Benefits and expenses paid		(4.6	)		(5.6	)		(3.1	)		(3.7	)		(2.7	)		(3.4	)
Actuarial loss (gain)		1.9			(1.5	)		(11.5	)		(10.2	)		1.3			(2.3	)
Exchange rate changes		—			—			(11.0	)		9.9			—			—
Ending obligations	$	108.6		$	99.2		$	180.8		$	186.7		$	41.8		$	38.9
Changes in plans assets
Beginning fair value	$	98.9		$	93.7		$	168.3		$	145.6		$	—		$	—
Adjustments due to adoption of FAS 158		(0.7	)		n/a			0.1			n/a			(0.1	)		n/a
Actual return on plan assets		(31.0	)		7.4			(22.2	)		5.3			—			—
Employer contributions		29.7			3.4			9.2			10.7			2.1			2.7
Plan participant contributions		—			—			2.6			2.4			0.7			0.7
Benefits and expenses paid		(4.6	)		(5.6	)		(3.1	)		(3.7	)		(2.7	)		(3.4	)
Exchange rate changes		—			—			(11.3	)		8.0			—			—
Ending fair value	$	92.3		$	98.9		$	143.6		$	168.3		$	—		$	—
Reconciliation of funded status
Funded status	$	(16.3	)	$	(0.3	)	$	(37.2	)	$	(18.4	)	$	(41.8	)	$	(38.9	)
Contributions and distributions made by Company from measurement date to fiscal year end		—			—			—			0.3			—			0.1
Net Consolidated Balance Sheet asset/(liability)	$	(16.3	)	$	(0.3	)	$	(37.2	)	$	(18.1	)	$	(41.8	)	$	(38.8	)
Amounts recognized in the Consolidated Balance Sheets:
For years after adoption of the funded status provisions of SFAS 158
Noncurrent assets	$	—		$	—		$	—		$	1.9		$	—		$	—
Current liabilities		—			—			(0.4	)		(0.3	)		(2.3	)		(1.9	)
Noncurrent liabilities		(16.3	)		(0.3	)		(36.8	)		(19.7	)		(39.5	)		(36.9	)
Net amount recognized	$	(16.3	)	$	(0.3	)	$	(37.2	)	$	(18.1	)	$	(41.8	)	$	(38.8	)
Reconciliation of amounts recognized in the Consolidated Balance Sheets
Initial net (obligation)	$	—		$	—		$	(0.3	)	$	(0.3	)	$	—		$	—
Prior service (cost) credit		(1.4	)		(1.9	)		(1.1	)		(1.4	)		8.5			9.6
Net (loss) gain		(62.7	)		(22.3	)		(38.4	)		(21.7	)		4.0			5.4
Accumulated other comprehensive (loss) income	$	(64.1	)	$	(24.2	)	$	(39.8	)	$	(23.4	)	$	12.5		$	15.0
Accumulated contributions in excess of net periodic benefit cost		47.8			23.9			2.6			5.3			(54.3	)		(53.8	)
Net amount surplus (deficit) recognized in statement of financial position	$	(16.3	)	$	(0.3	)	$	(37.2	)	$	(18.1	)	$	(41.8	)	$	(38.8	)

41

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 13: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

	Pension Plans																		Post-Retirement Medical Benefit Plans
	United States									International
	2008			2007			2006			2008			2007			2006			2008		2007			2006
Changes recognized in other comprehensive income
Changes due to minimum liability and intangible assest recognition prior to adoption of SFAS 158
Decrease in additional minimum liability		n/a			n/a		$	—			n/a			n/a		$	(0.1	)		n/a		n/a		$	—
Decrease in intangible asset		n/a			n/a			—			n/a			n/a			0.4			n/a		n/a			—
Other comprehensive loss		n/a			n/a		$	—			n/a			n/a		$	0.3			n/a		n/a		$	—
Changes in plan assets and benefit obligations recognized in other comprehensive income
Net loss (gain) arising during the year	$	41.5		$	(1.4	)	$	n/a		$	21.1		$	(7.8	)	$	n/a		$	1.3	$	(2.3	)	$	n/a
Effect of exchange rates on amounts included in AOCI		—			—			n/a			(4.1	)		1.2			n/a			—		—			n/a
Amounts recognized as a component of net periodic benefit cost
Amortization or curtailment recognition of prior service credit (cost)		(0.5	)		(0.4	)		n/a			(0.3	)		(0.2	)		n/a			1.1		1.0			n/a
Amortization or settlement recognition of net gain (loss)		(1.1	)		(1.0	)		n/a			(0.3	)		(1.3	)		n/a			0.1		—			n/a
Total recognized in other comprehensive loss (income)	$	39.9		$	(2.8	)		n/a		$	16.4		$	(8.1	)	$	0.3		$	2.5	$	(1.3	)	$	—
Total recognized in net periodic benefit cost and other comprehensive loss (income)	$	45.2		$	1.7		$	5.1		$	23.4		$	0.9		$	7.9		$	4.8	$	1.0		$	2.0
Increase in accumulated other comprehensive (loss) income, before taxes), to reflect the adoption of SFAS 158		n/a			n/a		$	(27.0	)		n/a			n/a		$	(30.7	)		n/a		n/a		$	13.7
Estimated amounts that will be amortized from accumulated other comprehensive income over the next fiscal year
Initial net (obligation)	$	—		$	—		$	—		$	—		$	—		$	—		$	—	$	—		$	—
Prior service (cost) credit		(0.4	)		(0.4	)		(0.4	)		(0.2	)		(0.3	)		(0.3	)		1.0		1.0			1.0
Net (loss) gain		(4.5	)		(1.1	)		(1.0	)		(2.4	)		(0.3	)		(1.2	)		—		0.1			—
Total estimated amortization	$	(4.9	)	$	(1.5	)	$	(1.4	)	$	(2.6	)	$	(0.6	)	$	(1.5	)	$	1.0	$	1.1		$	1.0

The components of the net periodic benefit costs are as follows:

	Pension Plans																		Post-Retirement Medical Benefit Plans
	United States									International
	2008			2007			2006			2008			2007			2006			2008			2007			2006
Service cost	$	5.8		$	5.4		$	5.1		$	8.0		$	8.8		$	7.4		$	1.0		$	1.1		$	1.1
Interest cost		6.0			5.1			4.9			7.9			6.3			5.6			2.4			2.2			2.1
Expected return on plan assets		(7.9	)		(7.4	)		(6.8	)		(9.5	)		(7.6	)		(6.9	)		—			—			—
Amortization		1.4			1.4			1.9			0.6			1.5			1.5			(1.1	)		(1.0	)		(1.2	)
Net periodic benefit cost	$	5.3		$	4.5		$	5.1		$	7.0		$	9.0		$	7.6		$	2.3		$	2.3		$	2.0

42

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 13: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

The rate assumptions associated with the pension and post-retirement medical benefit plans to determine benefit obligations and additional year-end information are as follows:

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2008			2007			2008			2007			2008			2007
Assumptions to determine benefit obligations
Discount rate		6.35	%		6.30	%		4.16	%		4.35	%		6.25	%		6.45	%
Compensation rate increase		3.60	%		3.60	%		2.98	%		3.50	%		n/a			n/a
Measurement date		Dec-31			Nov-30			Dec-31			Nov-30			Dec-31			Nov-30
Additional year-end information
Accumulated benefit obligation	$	96.8		$	88.1		$	163.1		$	161.7			n/a			n/a
Plans with accumulated benefit obligations in excess of plan assets:
Projected benefit obligation	$	108.6		$	—		$	131.9		$	13.5			n/a			n/a
Accumulated benefit obligation		96.8			—			118.1			10.9			n/a			n/a
Fair value of plan assets		92.3			—			96.8			—			n/a			n/a
Plans with projected benefit obligations in excess of plan assets:
Projected benefit obligation	$	108.6		$	99.2		$	180.8		$	122.4		$	41.8		$	38.9
Fair value of plan assets		92.3			98.9			143.6			102.2			—			—

The rate assumptions associated with the pension and post-retirement medical benefit plans to determine periodic pension costs are as follows:

	Pension Plans												Post-Retirement Medical Benefit Plans
	United States						International
	2008		2007		2006		2008		2007		2006		2008		2007		2006
Discount rate	6.30	%	5.55	%	5.65	%	4.35	%	3.60	%	3.88	%	6.45	%	5.55	%	5.65/6.15	%(1)
Expected rate of return on plan assets	8.25	%	8.25	%	8.25	%	5.66	%	5.08	%	5.46	%	n/a		n/a		n/a
Compensation rate increase	3.60	%	3.25	%	3.25	%	3.50	%	3.31	%	3.48	%	n/a		n/a		n/a

(1) Due to plan changes, the Post-Retirement Medical Plan expense was remeasured at May 31, 2006, using a discount rate of 6.15%.

The expected employer contributions and benefit payments are shown in the following table for the pension and post-retirement medical benefit plans:

		Pension Plans				Post-Retirement Medical Benefit Plans(2)		Expected Medicare Subsidy Receipts
	Year Ending	United States		International
Cash Flows
Expected employer contributions	2009	$	—	$	4.6	$	2.3	n/a
Expected benefit payments for fiscal year ending	2009		12.7		3.2		2.3	0.2
	2010		8.9		4.2		2.5	0.2
	2011		7.9		3.7		2.7	0.3
	2012		9.0		3.9		2.9	0.3
	2013		9.2		4.3		3.1	0.4
	Next 5 years		55.2		35.0		17.7	2.6

(2) Expected payments for Post-Retirement Medical Benefit Plans payments are shown net of the expected Medicare subsidy receipts.

The Pension Protection Act of 2006 (“PPA”) was effective on August 17, 2006. While the PPA will have some effect on specific plan provisions in the United States retirement program, its primary effect was to change the minimum funding requirements for plan years beginning in 2008. The changes in the timing and amount of our required contributions are not expected to be materially different than current projections.

43

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 13: PENSION AND OTHER POST-RETIREMENT BENEFIT PLANS (continued)

Pension Plans For determination of the discount rate, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. The plans are assumed to continue in force for as long as the assets are expected to be invested. In estimating the expected long-term rate of return on assets, appropriate consideration is given to historical performance for the major asset classes held or anticipated to be held by the Plan and to current forecasts of future rates of return for those asset classes. Cash flow and expenses are taken into consideration to the extent that the expected return would be affected by them. Because assets are held in qualified trusts, expected returns are not reduced for taxes.

The assets of the pension plans are invested in institutionally acceptable investments to produce a diversified portfolio. The Company believes the investments are sufficiently diversified to maintain a reasonable level of risk without sacrificing return. Target asset allocations and weighted average asset allocations at December 31, 2008 are as follows:

	Target Allocations				Weighted Average Asset Allocations
	U.S. Plans		International Plans		U.S. Plans		International Plans
Equity Securities	75–85	%	38–50	%	55	%	36	%
Real Estate	—		6–12	%	—		9	%
Debt Securities	15–30	%	36–57	%	19	%	41	%
Other	0–10	%	0–10	%	26	%	14	%

The trustee has engaged an investment manager for the U.S. Plan that has the responsibility of selecting investment fund managers with demonstrated experience and expertise and funds with demonstrated historical performance meeting the Plan’s investment guidelines. The investment manager considers both actively and passively managed investment strategies and allocates funds across the asset classes to develop an efficient investment structure.

The trustees of the International Plans have engaged institutions that are believed to be reputable to invest the Plan’s assets in funds with demonstrated historical performance and manage the Plan’s assets in accordance with investment guidelines developed by the trustees.

Post-Retirement Medical Benefit Plans For determination of the discount rate, the present value of the cash flows as of the measurement date is determined using the spot rates from the Mercer Yield Curve, and based on the present values, a single equivalent discount rate is developed. This rate is the single uniform discount rate that, when applied to the same cash flows, results in the same present value of the cash flows as of the measurement date. Assumed health care cost trend rates have a significant effect on the amounts reported for the post-retirement medical benefit plans. Medical costs were assumed to increase at an annual rate of 10% in 2008, decreasing ratably to a growth rate of 5.0% in 2014 and remaining at 5.0% per year thereafter. The effects of a one-percentage point decrease in the assumed health care cost trend rates on the aggregate service and interest cost components and on the post-retirement benefit obligations are decreases of $0.1 and $0.9, respectively. The effects of a one-percentage point increase on the aggregate service and interest cost components and on the post-retirement benefit obligations are increases of $0.1 and $0.9, respectively. Benefits are funded as claims are paid.

401(k) Retirement Savings Plan The Company’s 401(k) retirement savings plan provides retirement benefits to eligible U.S. employees in addition to those provided by the pension plan. The plan permits participants to voluntarily defer a portion of their compensation, subject to Internal Revenue Code limitations. The Company also contributes a fixed amount per year to the account of each eligible employee plus a percentage of the employee’s salary deferral. The Company’s policy is to fully fund this plan. The cost for this plan was $9.2, $8.3, and $7.7 for the years ended December 31, 2008, 2007 and 2006, respectively.

44

Exhibit 13 (continued)

Notes To Consolidated Financial Statements (continued)

($ In Millions, Except Per Share Data)

NOTE 14: EARNINGS PER SHARE

A reconciliation of basic and diluted earnings per share, together with the related shares outstanding for the years ended December 31 are as follows:

	2008		2007		2006
Net income available to common shareholders	$	341.5	$	311.1	$	276.8
Weighted average shares ($ In Millions)
Basic shares		126.3		130.6		132.9
Effect of dilutive securities — options outstanding		2.5		2.5		2.0
Diluted shares		128.8		133.1		134.9
Net income per share — Basic	$	2.70	$	2.38	$	2.08
Net income per share — Diluted	$	2.65	$	2.34	$	2.05

Potential common shares comprised of 0.3 million stock options were excluded from the calculation of weighted average shares for the year ended December 31, 2008, respectively, because their effect was considered to be antidilutive.

NOTE 15: SHARE REPURCHASES

At December 31, 2008 and December 31, 2007, the Company had repurchased a total of 92.3 million shares and 84.0 million shares, respectively. On October 20, 2008, the Board of Directors authorized the repurchase of up to an additional 10.0 million shares under the existing repurchase program, to be available for purchase within three years, bringing the total authorization to 100.0 million shares. There were 122.1 million shares outstanding as of December 31, 2008. The Company expects to acquire the remaining 7.7 million authorized shares, however, the timing of these future repurchases, if any, will depend upon market conditions and other factors.

NOTE 16: ACCUMULATED OTHER COMPREHENSIVE INCOME

Components of accumulated other comprehensive income, net of tax are as follows:

	Foreign Currency Translation Adjustment			Unrealized Gain (Loss) on Securities			Pension and Post-Retirement Benefit Plans			Accumulated Other Comprehensive Income
Balance, December 31, 2005	$	31.7		$	0.7		$	1.0		$	33.4
Current period change		75.6			3.4			(31.7	)		47.3
Balance, December 31, 2006		107.3			4.1			(30.7	)		80.7
Current period change		71.5			(0.7	)		8.4			79.2
Balance, December 31, 2007		178.8			3.4			(22.3	)		159.9
Current period change		(86.4	)		(6.0	)		(42.2	)		(134.6	)
Balance, December 31, 2008	$	92.4		$	(2.6	)	$	(64.5	)	$	25.3

The 2008 activity for unrealized loss on securities is net of tax of $3.2. The 2008 pension and post-retirement benefit plans activity is net of tax of $18.2. Deferred taxes are not provided on foreign currency translation adjustment.

45

Exhibit 13 (continued)

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in the Securities Exchange Act Rule 13a-15 (f)). Under the supervision and with the participation of our management, including our principal executive officer and our principal financial officer, we assessed the effectiveness of our internal control over financial reporting as of December 31, 2008. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in the Internal Control-Integrated Framework. Our management has concluded that, as of December 31, 2008, our internal control over financial reporting is effective based on these criteria.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders

Sigma-Aldrich Corporation:

We have audited the accompanying consolidated balance sheets of Sigma-Aldrich Corporation and subsidiaries (the Company) as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2008. We also have audited the Company’s internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on these consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

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

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Sigma-Aldrich Corporation and subsidiaries as of December 31, 2008 and 2007, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2008, in conformity with U.S. generally accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2008, based on criteria established in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the recognition and disclosure provision as required by Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans as of December 31, 2006.

As discussed in Note 9 to the consolidated financial statements, effective January 1, 2007, the Company adopted Financial Accounting Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an Interpretation of Statement of Financial Accounting Standard No. 109.

/s/ KPMG LLP

St. Louis, Missouri

February 26, 2009

46

EX-21

Exhibit 21

SIGMA-ALDRICH CORPORATION

SUBSIDIARIES

Sigma-Aldrich Corporation (Delaware), the Registrant:

1) Sigma-Aldrich Co. (Illinois)

(A) Sigma-Aldrich Israel, Ltd. (Israel)

(B) Aldrich Chemical Company, Inc. (Delaware)

(C) Sigma-Aldrich B.V. (Netherlands)

(1) Sigma-Aldrich Chemie Holding GmbH (Germany)

(a) Sigma-Aldrich Chemie GmbH (Germany)

(b) Sigma-Aldrich Produktions GmbH (Germany)

(c) Sigma-Aldrich Biochemie Verwaltungs GmbH (Germany)

i. Sigma-Aldrich Biochemie GmbH (Germany)

a. Sigma-Aldrich Laborchemikalien GmbH (Germany)

(D) Sigma-Aldrich Chemie Verwaltungs GmbH (Germany)

(E) Sigma-Aldrich GrundsteucksVerwaltungs GmbH & Co. KG (Germany)¹

(F) Sigma-Aldrich Holding Sarl (France)²

(1) Aldrich Chemical Foreign Holding LLC³

(a) Sigma-Aldrich Chimie SNC Partnership (France)

i. Sigma-Aldrich Chimie S.a.rl. (France)

(2) Sigma Chemical Foreign Holding LLC³

(G) Supelco, Inc. (Delaware)

(1) Advanced Separation Technologies, Inc. (New Jersey)

(H) Sigma-Aldrich Biotechnology Holding Co., Inc. (Missouri)

(I) Sigma-Aldrich Biotechnology Investment LLC (Missouri)

(J) Sigma-Aldrich Biotechnology LP (Missouri)⁴

(K) Sigma-Genosys of Texas, Inc. (Texas)

(L) Sigma-Genosys Holdings LLC (Missouri)

(M) Sigma-Genosys LP (Texas)⁵

(N) Sigma-Aldrich Business Holdings, Inc. (Delaware)

(1) Sigma-Aldrich Research Biochemicals, Inc. (Massachusetts)

(O) Sigma-Aldrich Lancaster, Inc. (Missouri)

(1) Techcare Systems, Inc. (California)

(P) KL Acquisition Corp (Missouri)

(1) Chemical Trade, Limited (Russia)

(2) MedChem, Limited (Russia)

(a) SAF-LAB (Russia)

(3) Sigma-Aldrich Rus (Russia)

(Q) Sigma-Aldrich China, Inc. (Missouri)

(R) Sigma-Aldrich Logistik GmbH (Germany)

(S) Sigma-Aldrich Manufacturing, LLC (Missouri)

2) Sigma-Aldrich, Inc. (Wisconsin)

Exhibit 21 (continued)

3) Sigma-Aldrich Finance Co. (Missouri)

4) SAFC Hitech, Inc. (Delaware)

5) Sigma-Aldrich (Switzerland) Holding AG (Switzerland)

(A) Sigma-Aldrich Chemie GmbH (Switzerland)

(B) Sigma-Aldrich Production GmbH (Switzerland)

(1) Sigma-Aldrich GmbH (Switzerland)

(C) Sigma-Aldrich N.V./S.A. (Belgium)

(1) Sigma-Aldrich Chemie B.V. (Netherlands)

(D) Sigma-Aldrich Italia S.r.l. (Italy)

(1) Sigma-Aldrich S.r.l. (Italy)

(2) Sigma-Aldrich Handels GmbH (Austria)

(E) Sigma-Aldrich (Shanghai) Trading Co. Ltd. (China)

(F) Sigma-Aldrich Denmark A/S (Denmark)

(G) Sigma-Aldrich Finland Oy (Finland)

(H) Sigma-Aldrich Norway AS (Norway)

(I) Sigma-Aldrich Sweden AB (Sweden)

(J) Sigma-Aldrich Hong Kong Holding Limited (Hong Kong)

(1) Sigma-Aldrich (Wuxi) Life Science & Technology Co. Ltd. (China)

6) Sigma-Aldrich Company, Ltd. (UK)

(A) SAFC Biosciences Limited (UK)

(B) Epichem Group Ltd. (UK)

(1) SAFC Hitech Ltd. (UK)

(2) SAFC Hitech Taiwan Co., Ltd. (Taiwan)

(3) SAFC Hitech (Shanghai) Co., Ltd. (China)

(4) SAFC Hitech Korea Ltd. (South Korea)

7) Sigma-Aldrich Foreign Holding Co. (Missouri)

(A) Sigma-Aldrich spol.s.r.o. (Czech Republic)

(B) Sigma-Aldrich (O M) Ltd. (Greece)

(C) Sigma-Aldrich Kft (Hungary)

(D) Sigma-Aldrich Financial Services Limited (Ireland)

(E) Sigma-Aldrich Sp. z.o.o. (Poland)

(F) Sigma-Aldrich Quimica S.A. (Spain)

(G) Sigma-Aldrich de Argentina S.A. (Argentina) ⁶

(H) Sigma-Aldrich Pty., Limited (Australia)

(1) SAFC Biosciences Pty. Ltd. (Australia)

(2) Proligo Australia Pty. Ltd. (Australia)

(I) Sigma-Aldrich Oceania Pty. Limited (Australia)

(J) Sigma-Aldrich Australia General Partnership (Australia) ⁷

Exhibit 21 (continued)

(1) Sigma-Aldrich New Zealand Ltd. (New Zealand)

(K) Sigma-Aldrich Quimica Brasil Ltda. (Brazil)

(L) Sigma-Aldrich Canada Ltd. (Canada)

(M) Sigma-Aldrich Chemicals Private Ltd. (India)

(N) Sigma-Aldrich Japan KK (Japan) ⁸

(O) Sigma-Aldrich Holding Ltd. (Korea)

(1) Sigma-Aldrich Korea Ltd. (Korea)

(P) Sigma-Aldrich Quimica S.A. de C.V. (Mexico)

(Q) Sigma-Aldrich Pte. Ltd. (Singapore)

(1) Sigma-Aldrich (M) Sdn. Bhd. (Malaysia)

(R) Sigma-Aldrich Pty. Ltd. (South Africa)

(S) Silverberry Limited (Ireland)

(1) Shrawdine Limited (Ireland)

(a) Sigma-Aldrich Ireland Ltd. (Ireland)

i. SAFC Arklow Limited (Ireland)

8) Sigma-Aldrich Insurance Company Ltd. (Bermuda)

9) SAFC, Inc. (Wisconsin)

10) SAFC-JRH Holding Company, Inc. (Delaware)

(A) SAFC Biosciences, Inc. (Delaware)

11) SAFC Carlsbad, Inc. (California)

¹ Ownership interest in Sigma-Aldrich GrunsteucksVerwaltungs GmbH & Co. KG (Germany) is Sigma-Aldrich Co.- 95% and Sigma-Aldrich Chemie Verwaltungs GmbH- 5%

² Ownership interest in Sigma-Aldrich Holding Sarl is Sigma-Aldrich (Switzerland) Holding AG 57.46% and Sigma-Aldrich Co. 42.54 %

³ Ownership interest in Sigma-Aldrich Chimie SNC is Aldrich Chemical Foreign Holding LLC—77% and Sigma Chemical Foreign Holding LLC- 23%

⁴ Ownership interest in Sigma-Aldrich Biotechnology LP is Sigma-Aldrich Biotechnology Investment LLC- 99% and Sigma-Aldrich Biotechnology Holding Co.- 1%

⁵ Ownership interest in Sigma-Genosys LP is Sigma-Genosys Holdings LLC- 99% and Sigma-Genosys of Texas, Inc.- 1%

⁶ Ownership interest in Sigma-Aldrich de Argentina S.A. is Sigma-Aldrich Foreign Holding Co. 95% and Sigma-Aldrich, Inc. 5%

⁷ Ownership interest in Sigma-Aldrich Australia General Partnership is Sigma-Aldrich Oceania Pty. Limited 99% and Sigma-Aldrich Pty. Limited 1%

⁸ Ownership interest in Sigma-Aldrich Japan KK is Sigma-Aldrich Foreign Holding Co. 78.9% and Sigma-Genosys of Texas, Inc. 21.1%

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors:

We consent to the incorporation by reference in the registration statement (No. 333-74163) on Form S-3 and registration statements (Nos. 333-49912, 33-24415, 33-62541, 333-64661, 333-30528 and 333-105033) on Form S-8 of Sigma-Aldrich Corporation (the Company) of our reports dated February 26, 2009, with respect to the consolidated balance sheets of Sigma-Aldrich Corporation as of December 31, 2008 and 2007, and the related consolidated statements of income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2008, and the effectiveness of internal control over financial reporting as of December 31, 2008, which report appears in the December 31, 2008 annual report on Form 10-K of Sigma-Aldrich Corporation.

As discussed in Note 1 to the consolidated financial statements, the Company adopted the recognition and disclosure provision as required by Statement of Financial Accounting Standards No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans as of December 31, 2006.

As discussed in Note 9 to the consolidated financial statements, effective January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes, an interpretation of Statement of Financial Accounting Standard No. 109.

/s/ KPMG LLP

St. Louis, Missouri

February 26, 2009

EX-31.1

Exhibit 31.1

CEO FORM 10-K CERTIFICATION

I, Jai P. Nagarkatti, certify that:

1. I have reviewed this annual report on Form 10-K of Sigma-Aldrich Corporation;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual 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: February 27, 2009

/s/    Jai P. Nagarkatti

Jai P. Nagarkatti

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CFO FORM 10-K CERTIFICATION

I, Rakesh Sachdev, certify that:

1. I have reviewed this annual report on Form 10-K of Sigma-Aldrich Corporation;

2. Based on my knowledge, this annual 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 annual report;

3. Based on my knowledge, the financial statements, and other financial information included in this annual 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 annual 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 annual 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 annual report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this annual 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: February 27, 2009

/s/    Rakesh Sachdev

Rakesh Sachdev

Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Sigma-Aldrich Corporation (the “Company”) on Form 10-K for the period ending December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jai P. Nagarkatti, Chief Executive Officer of the Company, certify, to the best of my knowledge, 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 condition and results of operations of the Company.

/s/    Jai P. Nagarkatti

Jai P. Nagarkatti

President and Chief Executive Officer

Sigma-Aldrich Corporation

February 27, 2009

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the annual report of Sigma-Aldrich Corporation (the “Company”) on Form 10-K for the period ending December 31, 2008 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Rakesh Sachdev, Chief Financial Officer of the Company, certify, to the best of my knowledge, 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 condition and results of operations of the Company.

/s/    Rakesh Sachdev

Rakesh Sachdev

Vice President and Chief Financial Officer

Sigma-Aldrich Corporation

February 27, 2009