UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

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

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

Commission file number 1-5353

TELEFLEX INCORPORATED

(Exact name of registrant as specified in its charter)

Delaware (State or other jurisdiction of		23-1147939 (I.R.S. employer identification no.)
incorporation or organization)

155 South Limerick Road, Limerick, Pennsylvania		19468
(Address of principal executive offices)		(Zip Code)

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

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

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

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

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

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

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

On October 16, 2009, 39,727,071 shares of the registrant’s common stock, $1.00 par value, were outstanding.

 

 

TELEFLEX INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 27, 2009

TABLE OF CONTENTS

		Page
PART I — FINANCIAL INFORMATION
Item 1: Financial Statements (Unaudited):
Condensed Consolidated Statements of Income for the three and nine months ended September 27, 2009 and September 28, 2008			2
Condensed Consolidated Balance Sheets as of September 27, 2009 and December 31, 2008			3
Condensed Consolidated Statements of Cash Flows for the nine months ended September 27, 2009 and September 28, 2008			4
Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 27, 2009 and September 28, 2008			5
Notes to Condensed Consolidated Financial Statements			6
Item 2: Management’s Discussion and Analysis of Financial Condition and Results of Operations			23
Item 3: Quantitative and Qualitative Disclosures About Market Risk			32
Item 4: Controls and Procedures			32
PART II — OTHER INFORMATION
Item 1: Legal Proceedings			33
Item 1A: Risk Factors			33
Item 2: Unregistered Sales of Equity Securities and Use of Proceeds			33
Item 3: Defaults Upon Senior Securities			33
Item 4: Submission of Matters to a Vote of Security Holders			33
Item 5: Other Information			33
Item 6: Exhibits			34
SIGNATURES			35
Exhibit 31.1
Exhibit 31.2
Exhibit 32.1
Exhibit 32.2

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

TELEFLEX INCORPORATED AND SUBSIDIARIES

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(Dollars and shares in thousands, except per share)
Net revenues		$	461,479			$	504,035			$	1,375,059			$	1,569,486
Materials, labor and other product costs			260,925				294,202				780,710				917,802
Gross profit			200,554				209,833				594,349				651,684
Selling, engineering and administrative expenses			126,151				137,527				381,132				432,833
Net loss on sales of businesses and assets			—				—				2,597				18
Goodwill impairment			—				—				6,728				—
Restructuring and other impairment charges			4,783				470				13,412				11,917
Income from continuing operations before interest and taxes			69,620				71,836				190,480				206,916
Interest expense			21,074				28,983				68,470				91,433
Interest income			(233	)			(492	)			(1,907	)			(1,861	)
Income from continuing operations before taxes			48,779				43,345				123,917				117,344
Taxes on income from continuing operations			13,740				13,718				29,262				39,443
Income from continuing operations			35,039				29,627				94,655				77,901
Operating (loss) income from discontinued operations (including (loss) gain on disposal of ($3,480) and $272,307 for the three and nine month periods in 2009, respectively and (loss) on disposal of ($4,808) for the nine month period in 2008)			(4,207	)			22,302				269,222				47,850
Taxes (benefit) on income from discontinued operations			(7,785	)			(17	)			92,881				(233	)
Income from discontinued operations			3,578				22,319				176,341				48,083
Net income			38,617				51,946				270,996				125,984
Less: Net income attributable to noncontrolling interest			305				196				843				642
Income from discontinued operations attributable to noncontrolling interest			—				9,431				9,860				25,137
Net income attributable to common shareholders		$	38,312			$	42,319			$	260,293			$	100,205
Earnings per share available to common shareholders:
Basic:
Income from continuing operations		$	0.87			$	0.74			$	2.36			$	1.95
Income from discontinued operations		$	0.09			$	0.33			$	4.19			$	0.58
Net income		$	0.96			$	1.07			$	6.55			$	2.53
Diluted:
Income from continuing operations		$	0.87			$	0.74			$	2.35			$	1.94
Income from discontinued operations		$	0.09			$	0.32			$	4.17			$	0.58
Net income		$	0.96			$	1.06			$	6.52			$	2.52
Dividends per share		$	0.34			$	0.34			$	1.02			$	1.00
Weighted average common shares outstanding:
Basic			39,724				39,645				39,711				39,553
Diluted			39,932				39,970				39,910				39,837
Amounts attributable to common shareholders:
Income from continuing operations, net of tax		$	34,734			$	29,431			$	93,812			$	77,259
Income from discontinued operations, net of tax			3,578				12,888				166,481				22,946
Net income		$	38,312			$	42,319			$	260,293			$	100,205

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

		September 27,				December 31,
		2009				2008
		(Dollars in thousands)
ASSETS
Current assets
Cash and cash equivalents		$	158,789			$	107,275
Accounts receivable, net			266,924				311,908
Inventories, net			395,234				424,653
Prepaid expenses and other current assets			20,099				21,373
Income taxes receivable			37,628				17,958
Deferred tax assets			58,609				66,009
Assets held for sale			9,010				8,210
Total current assets			946,293				957,386
Property, plant and equipment, net			327,014				374,292
Goodwill			1,466,829				1,474,123
Intangibles and other assets, net			1,055,329				1,090,852
Investments in affiliates			12,214				28,105
Deferred tax assets			—				1,986
Total assets		$	3,807,679			$	3,926,744
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Current borrowings		$	5,956			$	108,853
Accounts payable			85,834				139,677
Accrued expenses			101,720				125,183
Payroll and benefit-related liabilities			72,544				83,129
Derivative liabilities			18,240				27,370
Accrued interest			19,950				26,888
Income taxes payable			13,341				12,613
Deferred tax liabilities			8,254				2,227
Total current liabilities			325,839				525,940
Long-term borrowings			1,248,584				1,437,538
Deferred tax liabilities			344,197				324,678
Pension and postretirement benefit liabilities			169,868				169,841
Other liabilities			165,628				182,864
Total liabilities			2,254,116				2,640,861
Commitments and contingencies
Total common shareholders’ equity			1,549,092				1,246,455
Noncontrolling interest			4,471				39,428
Total equity			1,553,563				1,285,883
Total liabilities and equity		$	3,807,679			$	3,926,744

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

		Nine Months Ended
		September 27,				September 28,
		2009				2008
		(Dollars in thousands)
Cash Flows from Operating Activities of Continuing Operations:
Net income		$	270,996			$	125,984
Adjustments to reconcile net income to net cash provided by operating activities:
Income from discontinued operations			(176,341	)			(48,083	)
Depreciation expense			42,599				44,065
Amortization expense of intangible assets			32,917				34,255
Amortization expense of deferred financing costs			4,556				3,931
Impairment of long-lived assets			5,788				—
Impairment of goodwill			6,728				—
Stock-based compensation			6,793				6,447
Net loss on sales of businesses and assets			2,597				18
Other			257				16,901
Changes in operating assets and liabilities, net of effects of acquisitions and disposals:
Accounts receivable			12,491				(7,081	)
Inventories			7,455				(9,838	)
Prepaid expenses and other current assets			2,274				9,104
Accounts payable and accrued expenses			(45,493	)			8,032
Income taxes payable and deferred income taxes			(92,396	)			(135,591	)
Net cash provided by operating activities from continuing operations			81,221				48,144
Cash Flows from Financing Activities of Continuing Operations:
Proceeds from long-term borrowings			10,018				77,000
Reduction in long-term borrowings			(300,268	)			(185,345	)
(Decrease) increase in notes payable and current borrowings			(836	)			2,386
Proceeds from stock compensation plans			750				7,717
Payments to noncontrolling interest shareholders			(702	)			(739	)
Dividends			(40,521	)			(39,568	)
Net cash used in financing activities from continuing operations			(331,559	)			(138,549	)
Cash Flows from Investing Activities of Continuing Operations:
Expenditures for property, plant and equipment			(21,485	)			(25,546	)
Proceeds from sales of businesses and assets, net of cash sold			314,513				6,681
Payments for businesses and intangibles acquired, net of cash acquired			(1,730	)			(6,083	)
Investments in affiliates			—				(320	)
Net cash provided by (used in) investing activities from continuing operations			291,298				(25,268	)
Cash Flows from Discontinued Operations:
Net cash provided by operating activities			14,358				44,388
Net cash used in financing activities			(11,075	)			(32,340	)
Net cash used in investing activities			(1,173	)			(2,746	)
Net cash provided by discontinued operations			2,110				9,302
Effect of exchange rate changes on cash and cash equivalents			8,444				(3,574	)
Net increase (decrease) in cash and cash equivalents			51,514				(109,945	)
Cash and cash equivalents at the beginning of the period			107,275				201,342
Cash and cash equivalents at the end of the period		$	158,789			$	91,397

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

																		Accumulated
										Additional								Other				Treasury
		Common Stock								Paid in				Retained				Comprehensive				Stock								Noncontrolling				Total				Comprehensive
		Shares				Dollars				Capital				Earnings				Income				Shares				Dollars				Interest				Equity				Income
		(Dollars and shares in thousands, except per share)
Balance at December 31, 2007			41,794			$	41,794			$	252,108			$	1,118,053			$	56,919				2,343			$	(140,031	)		$	42,183			$	1,371,026
Net income															100,205																25,779				125,984			$	125,984
Split-dollar life insurance arrangements adjustment															(1,874	)																			(1,874	)			(1,874	)
Cash dividends ($1.00 per share)															(39,568	)																			(39,568	)
Financial instruments marked to market, net of tax of $(48)																			(64	)															(64	)			(64	)
Cumulative translation adjustment																			(14,126	)											(279	)			(14,405	)			(14,405	)
Pension liability adjustment, net of tax of $3,861																			(2,399	)															(2,399	)			(2,399	)
Distributions to noncontrolling interest shareholders																															(33,079	)			(33,079	)
Disposition of noncontrolling interest																															804				804
Comprehensive income																																						$	107,242
Shares issued under compensation plans			190				190				14,423												(15	)			657								15,270
Deferred compensation																							(8	)			332								332
Balance at September 28, 2008			41,984			$	41,984			$	266,531			$	1,176,816			$	40,330				2,320			$	(139,042	)		$	35,408			$	1,422,027
Balance at December 31, 2008			41,995			$	41,995			$	268,263			$	1,182,906			$	(108,202	)			2,311			$	(138,507	)		$	39,428			$	1,285,883
Net income															260,293																10,703				270,996			$	270,996
Cash dividends ($1.02 per share)															(40,521	)																			(40,521	)
Financial instruments marked to market, net of tax of $6,005																			13,858																13,858				13,858
Cumulative translation adjustment																			60,658												61				60,719				60,719
Pension liability adjustment, net of tax of $1,378																			764																764				764
Distributions to noncontrolling interest shareholders																															(702	)			(702	)
Disposition of noncontrolling interest																															(45,019	)			(45,019	)
Comprehensive income																																						$	346,337
Shares issued under compensation plans			20				20				6,261												(14	)			961								7,242
Deferred compensation																							(9	)			343								343
Balance at September 27, 2009			42,015			$	42,015			$	274,524			$	1,402,678			$	(32,922	)			2,288			$	(137,203	)		$	4,471			$	1,553,563

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

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

We prepared the accompanying unaudited condensed consolidated financial statements of Teleflex Incorporated on the same basis as our annual consolidated financial statements, with the exception of changes resulting from the adoption of new accounting guidance during the first nine months of 2009 as described in Note 2 below. As a result of this new accounting guidance, we reclassified certain prior year amounts.

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

We have evaluated the period from September 27, 2009, the date of the financial statements, through October 27, 2009, the date of the issuance and filing of the financial statements, and determined that no material subsequent events occurred that would affect the information presented in these financial statements or require additional disclosure.

In accordance with applicable accounting standards, the accompanying condensed financial statements do not include all of the information and footnote disclosures that are required to be included in our annual consolidated financial statements. The year-end condensed balance sheet data was derived from audited financial statements, but does not include all disclosures required by GAAP. Accordingly, our quarterly condensed financial statements should be read in conjunction with the consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2008.

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

The financial statements included in this report reflect changes resulting from the recent adoption of several accounting pronouncements. The subject matter of the changes, and the footnotes in which they appear, are as follows:

Evaluation period of subsequent events in Note 1;

Disclosure of derivative instruments and hedging activities in Note 8;

Fair value of long-term debt in Note 9; and

Fair value measurements in Note 9.

Described below are several accounting pronouncements that we either recently adopted (including those reflected in the footnotes referenced above) or will adopt in the near future:

The Company adopted the following new accounting standards as of January 1, 2009, the first day of its 2009 fiscal year:

Fair Value Measurements: In September 2006, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Codification (“ASC”) topic 820, “Fair Value Measurements and Disclosures.” This topic established a common definition of fair value, established a framework for measuring fair value, and expanded disclosure about such fair value measurements.

In February 2008, the FASB updated Fair Value Measurements and Disclosures allowing a deferral of the effective date of this topic for all nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually). The Company adopted the initial topic as of January 1, 2008 with respect to financial assets and financial liabilities and adopted the update to the topic as of January 1, 2009 with respect to nonfinancial assets and liabilities. While the topic and the related update did not have a material impact on the Company’s results of operations, cash flows or financial position upon adoption, the topic required additional disclosures regarding the Company’s assets and liabilities recorded at fair value which disclosures are included in Note 9.

Business Combinations: In December 2007, the FASB revised the accounting for business combinations (ASC topic 805, “Business Combinations”). The revised topic retained the fundamental requirement that the acquisition method of accounting (previously referred to as the purchase method) be used for all business combinations and that an acquirer be identified for each business combination. The revised topic defines the acquirer as the entity that obtains control of one or more businesses in the business combination and establishes the acquisition date as the date that the acquirer achieves control.

The revised topic replaces the cost-allocation process and requires an acquirer to recognize the assets acquired, the liabilities assumed, and any non-controlling interest in the acquired business at the acquisition date, measured at their fair values as of that date, with limited exceptions. In addition, the revised topic changes the allocation and treatment of acquisition-related costs, restructuring costs that the acquirer expected but was not obligated to incur, the recognition of assets acquired and liabilities assumed arising from contingencies and the recognition and measurement of goodwill.

The FASB issued an update to amend the Business Combinations topic on April 1, 2009. The amendment clarified issues that arose regarding initial recognition and measurement, subsequent measurement and accounting and disclosure of assets and liabilities arising from contingencies in a business combination.

The revised topic and the related update did not have an impact on the Company’s results of operations, cash flows or financial position upon their adoption.

Non-controlling Interests: In December 2007, the FASB issued an update to ASC topic 810, “Consolidation.” The update establishes accounting and reporting standards for the non-controlling interest in a subsidiary, sometimes referred to as minority interest, and for the deconsolidation of a subsidiary. The update clarifies that a non-controlling interest in a subsidiary is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. The update requires that a non-controlling interest in subsidiaries held by parties other than the parent be clearly identified, labeled, and presented in the consolidated statement of financial position within equity, but separate from the parent’s equity, that the amount of consolidated net income attributable to the parent and to the non-controlling interest be clearly identified and presented on the face of the consolidated statement of income, that the changes in a parent’s ownership interest while the parent retains its controlling financial interest in its subsidiary be accounted for consistently as equity transactions and that when a subsidiary is deconsolidated, any retained non-controlling equity investment in the former subsidiary be initially measured at fair value. The adoption changed the presentation of non-controlling interests on our income statement, balance sheet and changes in shareholders’ equity.

Disclosures about derivative instruments and hedging activities: In March 2008, the FASB issued an update to ASC topic 815, “Derivatives and Hedging,” which requires enhanced disclosures about (a) how and why a company uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for under the topic and related interpretations, and (c) how derivative instruments and related hedged items affect the Company’s financial position, financial performance, and cash flows. Refer to Note 8 for the enhanced disclosures related to the Company’s derivative instruments.

Determination of the Useful Life of Intangible Assets: In April 2008, the FASB issued an amendment to ASC topic 350, “Intangibles-Goodwill and Other,” that addresses the factors that should be considered in developing renewal or extension assumptions used to determine the useful lives for intangible assets. The amendment requires an entity to consider its own historical experience in renewing or extending similar arrangements, regardless of whether those arrangements have explicit renewal or extension provisions, when determining the useful life of an intangible asset. In the absence of such experience, an entity shall consider the assumptions that market participants would use about renewal or extension, adjusted for entity-specific factors. The amendment did not have a material impact on the Company’s results of operations, cash flows or financial position upon adoption.

The Company adopted the following new accounting standards in the second quarter of 2009:

Interim Disclosures about Fair Value of Financial Instruments: In April 2009, the FASB issued an update to ASC topic 470, “Debt,” which requires disclosures about fair value of financial instruments for interim reporting periods as well as in annual financial statements. The update also amends prior guidance under ASC topic 270, “Interim Reporting,” to require those disclosures in summarized financial information at interim reporting periods. The update requires that an entity disclose in the body or in the accompanying notes of its financial information the fair value of all financial instruments for which it is practicable to estimate that value, whether recognized or not recognized in the statement of financial position. In addition, an entity shall also disclose the method(s) and significant assumptions used to estimate the fair value of financial instruments.

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

The update does not require disclosures for earlier periods presented for comparative purposes at initial adoption. Refer to Note 9 for the interim fair value disclosures related to the Company’s financial instruments.

Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly: In April 2009, the FASB issued an update to ASC topic 820, “Fair Value Measurements and Disclosures,” that provides additional guidance for estimating fair value when the volume and level of activity for the asset or liability have significantly decreased. The update also includes guidance on identifying circumstances that indicate a transaction is not orderly.

The update does not require disclosures for earlier periods presented for comparative purposes at initial adoption. The adoption of the update did not have a material impact on the Company’s results of operations, cash flows or financial position.

Subsequent Events: In May 2009, the FASB issued ASC topic 855, “Subsequent Events,” which establishes reporting and disclosure requirements based on the existence of conditions at the date of the balance sheet for events or transactions that occurred after the balance sheet date but before the financial statements are issued or are available to be issued. Companies are required to disclose the date through which subsequent events have been evaluated and whether that date is the date the financial statements were issued or were available to be issued.

The Company adopted the following new accounting standard in the third quarter of 2009:

The FASB Accounting Standards Codification^TM and the Hierarchy of Generally Accepted Accounting Principles: In June 2009, the FASB issued an amendment to ASC topic 105, “Generally Accepted Accounting Principles.” The amendment identifies the sources of accounting principles and the framework for selecting the principles used in the preparation of financial statements of nongovernmental entities that are presented in conformity with GAAP in the United States (the GAAP hierarchy). The amendment establishes the Codification as the source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the SEC under federal securities laws are also sources of authoritative GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority.

The Company will adopt the following new accounting standards in the fourth quarter of 2009:

Employers’ Disclosures about Postretirement Benefit Plan Assets: In December 2008, the FASB issued an update to ASC topic 715, “Compensation-Retirement Benefits,” which requires additional disclosures regarding employers’ pension and other postretirement benefit plan assets. Disclosures regarding fair value measurements of pension and other postretirement benefit plan assets previously were not included within the scope of the topic. The update requires employers to disclose information about fair value measurements of plan assets that would be similar to the disclosures about fair value measurements required under ASC topic 820, “Fair Value Measurements and Disclosures,” the investment policies and strategies for the major categories of plan assets, and significant concentrations of risk within plan assets. The update is effective for the Company as of December 31, 2009. Since the update provides only disclosure requirements, the adoption will not have a material impact on the Company’s results of operations, cash flows or financial position.

Measuring Liabilities at Fair Value: In September 2009, the FASB issued an amendment to ASC topic 820, “Fair Value Measurements and Disclosures,” to clarify how an entity should measure the fair value of liabilities. The amendment also clarifies that restrictions which prevent the transfer of a liability should not be considered as separate inputs or adjustments in the measurement of the liability’s fair value. The amendment reaffirms the measurements concept of determining fair value based on an orderly transaction between market participants even though liabilities are infrequently transferred due to contractual or other legal restrictions. The amendment is not expected to have a material impact on the Company’s results of operations, cash flows or financial position.

The Company will adopt the following new accounting standards as of January 1, 2010, the first day of its 2010 fiscal year:

Accounting for Transfers of Financial Assets — an amendment of ASC topic 860, “Transfers and Servicing:” In June 2009, the FASB issued an amendment to ASC topic 860, “Transfers and Servicing,” to improve the information that is reported in financial statements about the transfer of financial assets and the effects of transfers of financial assets on financial position, financial performance and cash flows and a transferor’s continuing involvement, if any, with transferred financial assets. In addition, the amendment eliminates the concept of qualifying special purpose entities and limits the circumstances in which a financial asset or a portion of a financial asset should be derecognized in the financial statements being presented when the transferor has not transferred the entire original financial asset to an entity that is not consolidated with the transferor and/or when the transferor has continuing involvement with the transferred financial asset. Upon the adoption of this amendment in the first quarter of 2010 the accounts receivable that the Company had previously treated as sold and removed from the balance sheet will be included in accounts receivable, net and the amounts outstanding under the Company’s Accounts Receivable Securitization Program will be accounted for as a secured borrowing and reflected as short-term debt on our balance sheet (which as of September 27, 2009 is $39.7 million for both).

Amendment to ASC topic 810, “Consolidation:” In June 2009, the FASB issued an amendment to ASC topic 810, “Consolidation,” that requires an enterprise to perform an analysis to determine whether the enterprise’s variable interest or interests give it a controlling financial interest in a variable interest entity (which would result in the enterprise being deemed the primary beneficiary of that entity and, therefore, obligated to consolidate the variable interest entity in its financial statements); to require ongoing reassessments of whether an enterprise is the primary beneficiary of a variable interest entity; to revise guidance for determining whether an entity is a variable interest entity; and to require enhanced disclosures that will provide more transparent information about an enterprise’s involvement with a variable interest entity. The Company is currently evaluating the provisions of the amendment to determine the impact on the Company’s results of operations, cash flows and financial position.

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

The following table provides information relating to changes in the accrued liability associated with the Arrow integration plan during the nine months ended September 27, 2009:

		Balance at																Balance at
		December 31,				Adjustments to												September 27,
		2008				Reserve				Payments				Translation				2009
		(Dollars in millions)
Termination benefits		$	4.3			$	(0.3	)		$	(0.1	)		$	—			$	3.9
Facility closure costs			0.8				—				(0.2	)			—				0.6
Contract termination costs			4.8				0.1				(1.9	)			(0.3	)			2.7
Other integration costs			0.7				—				—				—				0.7
		$	10.6			$	(0.2	)		$	(2.2	)		$	(0.3	)		$	7.9

The termination benefits are expected to be paid in 2010. The facility closure costs consist of payments for leased facilities that will extend to 2013. Approximately $2.1 million of the contract termination costs will be paid in the next six months to terminate a European distributor agreement.

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

The amounts included in restructuring and other impairment charges in the condensed consolidated statement of income for the three and nine month periods ended September 27, 2009 and September 28, 2008 consisted of the following:

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(Dollars in thousands)
2008 Commercial Segment Restructuring Program		$	185			$	—			$	2,240			$	—
2007 Arrow Integration Program			1,284				432				5,384				11,212
2006 Restructuring Program			—				38				—				705
Impairment charges — intangibles and fixed assets			3,314				—				5,788				—
Restructuring and other impairment charges		$	4,783			$	470			$	13,412			$	11,917

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

The charges associated with the 2008 Commercial Segment restructuring program that are included in restructuring and other impairment charges in the condensed consolidated statements of income during the three and nine month periods ended September 27, 2009 were as follows:

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

The following table provides information relating to changes in the accrued liability associated with the 2008 Commercial Segment restructuring program during the nine months ended September 27, 2009:

		Balance at																Balance at
		December 31,				Subsequent												September 27,
		2008				Accruals				Payments				Translation				2009
		(Dollars in thousands)
Termination benefits		$	449			$	2,027			$	(2,430	)		$	7			$	53
Facility closure costs			—				213				(213	)			—				—
		$	449			$	2,240			$	(2,643	)		$	7			$	53

As of September 27, 2009, the Company has substantially completed the 2008 Commercial Segment restructuring program.

Termination benefits are comprised of severance-related payments for all employees terminated in connection with the 2008 Commercial Segment restructuring program. Facility closure costs relate primarily to costs to prepare a facility for closure.

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

The charges associated with the 2007 Arrow integration program that were included in restructuring and other impairment charges for the three and nine month periods ended September 27, 2009 and September 28, 2008, are as follows:

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(Dollars in thousands)
Termination benefits		$	679			$	44			$	3,243			$	9,882
Facility closure costs			193				—				409				—
Contract termination costs			157				63				1,048				869
Other restructuring costs			255				325				684				461
		$	1,284			$	432			$	5,384			$	11,212

The following table provides information relating to changes in the accrued liability associated with the 2007 Arrow integration program during the nine months ended September 27, 2009. Subsequent accruals represent the recognition of non-accruable restructuring expenses in the period in which the expense has been incurred:

		Balance at																Balance at
		December 31,				Subsequent												September 27,
		2008				Accruals				Payments				Translation				2009
		(Dollars in thousands)
Termination benefits		$	7,815			$	3,243			$	(7,793	)		$	(149	)		$	3,116
Facility closure costs			601				409				(383	)			9				636
Contract termination costs			—				1,048				(688	)			25				385
Other restructuring costs			159				684				(821	)			2				24
		$	8,575			$	5,384			$	(9,685	)		$	(113	)		$	4,161

Termination benefits are comprised of severance-related payments for all employees terminated in connection with the 2007 Arrow integration program. Facility closure costs relate primarily to costs to prepare a facility for closure. Contract termination costs relate primarily to the termination of leases in conjunction with the consolidation of facilities.

As of September 27, 2009, the Company expects to incur the following restructuring expenses associated with the 2007 Arrow integration program in its Medical Segment through December 2010:

		(Dollars in millions)
Termination benefits		$	1.5 – 2.5
Facility closure costs			0.2 – 0.4
Contract termination costs			0.5 – 0.8
Other restructuring costs			0.7 – 1.0
		$	2.9 – 4.7

During the third quarter of 2009 the Company revised the 2007 Arrow integration program resulting in a $2 million reduction in termination benefits due to a decision to retain certain functions in Europe and a $5 million reduction in contract termination costs due to a decision to maintain certain distributor relationships in Asia.

2006 Restructuring Program

In June 2006, the Company began certain restructuring initiatives that affected all three of the Company’s reporting segments. These initiatives involved the consolidation of operations and a related reduction in workforce at several of the Company’s facilities in Europe and North America. The Company determined to undertake these initiatives as a means to improving operating performance and to better leverage the Company’s existing resources.

For the three and nine month periods ended September 28, 2008, the charges associated with the 2006 restructuring program that are included in restructuring and other impairment charges were as follows:

		Medical
		Three Months Ended				Nine Months Ended
		September 28,				September 28,
		2008				2008
		(Dollars in thousands)
Termination benefits		$	—			$	589
Contract termination costs			38				116
		$	38			$	705

Termination benefits were comprised of severance-related payments for all employees terminated in connection with the 2006 restructuring program. Contract termination costs related primarily to the termination of leases in conjunction with the consolidation of facilities. The 2006 Restructuring Program ceased December 31, 2008, no costs were incurred under this program in 2009. The accrued liability at September 27, 2009 and December 31, 2008 was nominal.

During the second quarter of 2009, the Company recorded $2.3 million in impairment charges with respect to an intangible asset in the Commercial Segment. In 2004, the Company contributed property and other assets that had been part of one of its former manufacturing sites to a real estate venture in California. During the third quarter of 2009, based on continued deterioration in the California real estate market, the Company concluded that its investment was not recoverable and recorded $3.3 million in impairment charges to fully write-off its investment in this venture. See Note 5 — Impairment of Goodwill and Intangible Assets for a discussion of the charge.

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

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

Note 6 — Inventories

Inventories consisted of the following:

		September 27,				December 31,
		2009				2008
		(Dollars in thousands)
Raw materials		$	164,977			$	185,270
Work-in-process			61,284				55,618
Finished goods			205,389				221,281
			431,650				462,169
Less: Inventory reserve			(36,416	)			(37,516	)
Inventories		$	395,234			$	424,653

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

Note 7 — Goodwill and other intangible assets

Changes in the carrying amount of goodwill, by operating segment, for the nine months ended September 27, 2009 are as follows:

		Medical				Aerospace				Commercial				Total
		(Dollars in thousands)
Goodwill at December 31, 2008		$	1,426,031			$	6,996			$	41,096			$	1,474,123
Acquisitions			214				—				—				214
Adjustment to acquisition balance sheet			(525	)			—				—				(525	)
Dispositions			—				(268	)			(27,181	)			(27,449	)
Impairment			—				(6,728	)			—				(6,728	)
Translation adjustment			26,022				—				1,172				27,194
Goodwill at September 27, 2009		$	1,451,742			$	—			$	15,087			$	1,466,829

The $6.7 million impairment charge recognized during the second quarter represents the impairment of goodwill for the Cargo Container reporting unit in the Aerospace Segment. See Note 5 for further discussion on the goodwill impairment charge.

The dispositions relate to the sale of the ATI (Aerospace) and Power Systems (Commercial) businesses in the first and third quarters of 2009, respectively.

Intangible assets consisted of the following:

		Gross Carrying Amount								Accumulated Amortization
		September 27,				December 31,				September 27,				December 31,
		2009				2008				2009				2008
		(Dollars in thousands)
Customer lists		$	560,643			$	553,786			$	67,896			$	48,311
Intellectual property			208,543				221,549				55,233				53,437
Distribution rights			22,890				26,833				16,414				16,422
Trade names			337,536				333,495				3,579				875
		$	1,129,612			$	1,135,663			$	143,122			$	119,045

Amortization expense related to intangible assets was approximately $11.1 million and $11.2 million for the three months ended and $32.9 million and $34.3 million for the nine months ended September 27, 2009 and September 28, 2008, respectively. Estimated annual amortization expense for each of the five succeeding years is as follows (dollars in thousands):

2009		$	44,300
2010			44,500
2011			44,300
2012			43,400
2013			42,100

Note 8 — Financial instruments

The Company uses derivative instruments for risk management purposes. Forward rate contracts are used to manage foreign currency transaction exposure and interest rate swaps are used to reduce exposure to interest rate changes. In accordance with ASC topic 815, “Derivatives and Hedging,” these derivative instruments are designated as cash flow hedges and are recorded on the balance sheet at fair market value. The effective portion of the gains or losses on derivatives are reported as a component of other comprehensive income and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings. See Note 9, “Fair Value Measurement” for additional information.

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

The location and fair values of derivative instruments designated as hedging instruments under ASC topic 815, “Derivatives and Hedging” in the condensed consolidated balance sheet are as follows:

		Fair Values of Derivative Instruments
		Asset Derivatives								Liability Derivatives
		As of September 27, 2009
		(Dollars in thousands)
						Fair								Fair
		Balance Sheet Location				Value				Balance Sheet Location				Value
Interest rate contracts		—				$	—			Derivative liabilities — current				$	16,842
Interest rate contracts		—					—			Other liabilities — noncurrent					14,490
Foreign exchange contracts		Other assets — current					1,234			Derivative liabilities — current					1,398
Foreign exchange contracts		—					—			Other liabilities — noncurrent					106
Total derivatives						$	1,234							$	32,836

The location and amount of the gains and losses for derivatives in cash flow hedging relationships as defined under ASC topic 815, “Derivatives and Hedging,” that were reported in other comprehensive income (“OCI”), accumulated other comprehensive income (“AOCI”) and the condensed consolidated statement of income for the three and nine months periods ended September 27, 2009 are as follows:

		Three Months Ended September 27, 2009
		Effective Portion
		Gain/(Loss)
		Recognized
		in OCI				(Gain)/Loss Reclassified from AOCI into Income
		After Tax								Pre-Tax
		Amount				Location				Amount
		(Dollars in thousands)
Interest rate contracts		$	(334	)		Interest expense				$	5,164
Foreign exchange contracts			405			Net revenues					(548	)
Foreign exchange contracts			—			Materials, labor and other product costs					694
Foreign exchange contracts			—			Selling, engineering, and administrative expenses					(287	)
Foreign exchange contracts			—			Income from discontinued operations					31
Total		$	71							$	5,054

		Nine Months Ended September 27, 2009
		Effective Portion
		Gain
		Recognized
		in OCI				(Gain)/Loss Reclassified from AOCI into Income
		After Tax								Pre-Tax
		Amount				Location				Amount
		(Dollars in thousands)
Interest rate contracts		$	8,928			Interest expense				$	14,275
Foreign exchange contracts			4,930			Net revenues					225
Foreign exchange contracts			—			Materials, labor and other product costs					2,816
Foreign exchange contracts			—			Selling, engineering, and administrative expenses					(287	)
Foreign exchange contracts			—			Income from discontinued operations					235
Total		$	13,858							$	17,264

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

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

Note 9 — Fair value measurement

The Company endeavors to utilize the best available information in measuring fair value in accordance with the valuation hierarchy described below. The Company has determined the fair value of its financial assets based on Level 1 and Level 2 inputs and the fair value of its financial liabilities based on Level 2 inputs in accordance with the valuation hierarchy.

Valuation Hierarchy

The Derivatives and Hedging Standard establishes a valuation hierarchy of the inputs used to measure fair value. This hierarchy prioritizes the inputs into three broad levels as follows:

Level 1 inputs — quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has ability to access at the measurement date.

Level 2 inputs — inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. If the asset or liability has a specified (contractual) term, a Level 2 input must be observable for substantially the full term of the asset or liability. Level 2 inputs include:

1. Quoted prices for similar assets or liabilities in active markets.

2. Quoted prices for identical or similar assets or liabilities in markets that are not active.

3. Inputs other than quoted prices that are observable for the asset or liability.

4. Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 inputs — unobservable inputs for the asset or liability. Unobservable inputs may be used to measure fair value only when observable inputs are not available. Unobservable inputs reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability in achieving the fair value measurement objective of an exit price perspective.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement.

The following tables provide the financial assets and liabilities carried at fair value measured on a recurring basis as of September 27, 2009 and September 28, 2008:

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

		Total carrying
		value at				Quoted prices in				Significant other				Significant
		September 28,				active markets				observable inputs				unobservable
		2008				(Level 1)				(Level 2)				inputs (Level 3)
		(Dollars in thousands)
Deferred compensation assets		$	3,272			$	3,272			$	—			$	—
Derivative assets		$	578			$	—			$	578			$	—
Derivative liabilities		$	17,873			$	—			$	17,873			$	—

The carrying amount reported in the condensed consolidated balance sheet as of September 27, 2009 for long-term debt is $1,249.8 million. Using a discounted cash flow technique that incorporates a market interest yield curve with adjustments for duration, optionality, and risk profile, the Company has determined the fair value of its debt to be $1,165.4 million at September 27, 2009. The Company’s implied credit rating is a factor in determining the market interest yield curve.

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

Valuation Techniques

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

The Company’s financial assets valued based upon Level 2 inputs are comprised of foreign currency forward contracts. The Company’s financial liabilities valued based upon Level 2 inputs are comprised of an interest rate swap contract and foreign currency forward contracts. The Company takes into account the counterparties or its own creditworthiness in measuring fair value. The fair value of the interest rate swap contract is developed from market-based inputs under the income approach using cash flows discounted at relevant market interest rates which is then adjusted for the Company’s creditworthiness using a credit default swap rate. The fair value of the foreign currency forward exchange contracts represents the amount required to enter into offsetting contracts with similar remaining maturities based on quoted market prices. See Note 8, “Financial Instruments” for additional information.

Note 10 — Changes in shareholders’ equity

Set forth below is a reconciliation of the Company’s issued common shares:

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(Shares in thousands)
Common shares, beginning of period			42,005				41,932				41,995				41,794
Shares issued under compensation plans			10				52				20				190
Common shares, end of period			42,015				41,984				42,015				41,984
Less: Treasury shares, end of period			2,288				2,320				2,288				2,320
Outstanding shares, end of period			39,727				39,664				39,727				39,664

On June 14, 2007, the Company’s Board of Directors authorized the repurchase of up to $300 million of outstanding Company common stock. Repurchases of Company stock under the Board authorization may be made from time to time in the open market and may include privately-negotiated transactions as market conditions warrant and subject to regulatory considerations. The stock repurchase program has no expiration date and the Company’s ability to execute on the program will depend on, among other factors, cash requirements for acquisitions, cash generation from operations, debt repayment obligations, market conditions and regulatory requirements. In addition, the Company’s senior loan agreements limit the aggregate amount of share repurchases and other restricted payments the Company may make to $75 million per year in the event the Company’s consolidated leverage ratio (generally “consolidated total indebtedness” to “consolidated EBITDA,” as such terms are defined in the senior loan agreements) exceeds 3.5 to 1. Accordingly, these provisions may limit the Company’s ability to repurchase shares under this Board authorization. Through September 27, 2009, no shares have been purchased under this Board authorization.

Basic earnings per share is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed in the same manner except that the weighted average number of shares is increased for dilutive securities. The difference between basic and diluted weighted average common shares results from the assumption that dilutive share-based payment awards were exercised or vested at the beginning of the period. A reconciliation of basic to diluted weighted average shares outstanding is as follows:

		Three Months Ended								Nine Months Ended
		September 27,				September 28,				September 27,				September 28,
		2009				2008				2009				2008
		(Shares in thousands)
Basic			39,724				39,645				39,711				39,553
Dilutive shares assumed issued			208				325				199				284
Diluted			39,932				39,970				39,910				39,837

Weighted average stock options that were anti-dilutive and therefore not included in the calculation of earnings per share were approximately 1,923 thousand and 1,807 thousand for the three and nine month periods ended September 27, 2009 and approximately 666 thousand and 908 thousand for the three and nine month periods ended September 28, 2008, respectively.

The Company has two stock-based compensation plans under which equity-based awards may be made. The Company’s 2000 Stock Compensation Plan (the “2000 plan”) provides for the granting of incentive and non-qualified stock options and restricted stock awards to directors, officers and key employees. Under the 2000 plan, the Company is authorized to issue up to 4 million shares of common stock, but no more than 800,000 of those shares may be issued as restricted stock. Options granted under the 2000 plan have an exercise price equal to the average of the high and low sales prices of the Company’s common stock on the date of the grant, rounded to the nearest $0.25. Generally, options granted under the 2000 plan are exercisable three to five years after the date of the grant and expire no more than ten years after the grant date. Restricted stock awards generally vest in one to three years. During the first nine months of 2009, the Company granted non-qualified options to purchase 5,000 shares of common stock and granted restricted stock awards representing 170,159 shares of common stock under the 2000 plan.

The Company’s 2008 Stock Incentive Plan (the “2008 plan”) provides for the granting of various types of equity-based awards to directors, officers and key employees. These awards include incentive and non-qualified stock options, stock appreciation rights, stock awards and other stock-based awards. Under the 2008 plan, the Company is authorized to issue up to 2.5 million shares of common stock, but grants of awards other than stock options and stock appreciation rights may not exceed 875,000 shares. Options granted under the 2008 plan have an exercise price equal to the closing price of the Company’s common stock on the date of grant. Generally, options granted under the 2008 plan are exercisable three years after the date of the grant and expire no more than ten years after the grant date. During the first nine months of 2009, the Company granted incentive and non-qualified options to purchase 452,644 shares of common stock under the 2008 plan.

The effective income tax rate for the three months ended September 27, 2009 was 28.2% compared to 31.6% for the corresponding prior year period. The effective income tax rate for the nine months ended September 27, 2009 was 23.6% compared to 33.6% for the corresponding prior year period. The principal factors affecting the comparability of the effective income tax rate for the three month period are the beneficial net impact of discrete tax charges in the third quarter of 2009, including a net reduction in income tax reserves related to the expiration of statutes of limitation for various uncertain tax positions, the settlement of tax audits, and adjustments to previously filed tax returns, partially offset by the impact of 2009 foreign income inclusions that will be immediately taxed in the U.S. The principal factors affecting the comparability of the effective income tax rate for the nine month period are the beneficial net impact of discrete tax charges in 2009, including a net reduction in income tax reserves related to the expiration of statutes of limitation for various uncertain tax positions, the settlement of tax audits, and adjustments to previously filed tax returns, partially offset by the impact of 2009 foreign income inclusions that will be immediately taxed in the U.S. and the impairment loss of $6.7 million on non-deductible goodwill for which there is no income tax benefit.

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

In 2009, the Company offered certain qualifying individuals an early retirement program. Based on the individuals that accepted the offer the Company recognized special termination benefits of $402 thousand in pension expense and $395 thousand in postretirement expense in the second quarter of 2009.

In 2008, the Company took the following actions with respect to its pension benefits:

• Effective August 31, 2008, the Arrow Salaried plan, the Arrow Hourly plan and the Berks plan were merged into the Teleflex Retirement Income Plan (“TRIP”).

• On October 31, 2008, the TRIP was amended to cease future benefit accruals for all employees, other than those subject to a collective bargaining agreement, as of December 31, 2008.

• On December 15, 2008, the Company amended its Supplemental Executive Retirement Plans (“SERP”) for all executives to cease future benefit accruals as of December 31, 2008. In addition, the Company approved a plan to replace the non-qualified defined benefits provided under the SERP with a non-qualified defined contribution arrangement under the Company’s Deferred Compensation Plan, effective January 1, 2009.