Generally, these remaining actions allege that health care workers have sustained needle sticks using hollow-bore needle devices manufactured by us and, as a result, require medical testing, counseling and/or treatment. Several actions additionally allege that the health care workers have sustained mental anguish. Plaintiffs seek money damages in all remaining actions.

In June 1999, a class certification hearing was held in the matter of Usrey vs. Becton Dickinson et al. which first was filed in Texas state court on April 9, 1998, under the caption Calvin vs. Becton Dickinson et al. The Court has advised the parties by letter received on October 27, 1999, that it believes that it is appropriate to address the issues in the case by way of a class action under Texas procedural law. The Court has scheduled a meeting with the parties’ counsel in mid-December to discuss the wording of an appropriate order.

We continue to oppose class action certification in these cases and will continue vigorously to defend these lawsuits, including pursuing all appropriate rights of appeal.

We, along with another manufacturer, a group purchasing organization (“GPO”) and three hospitals, have been named as a defendant in an antitrust action brought pursuant to the Texas Free Enterprise Act (“TFEA”). The action is pending in state court in Texas, under the caption Retractable Technologies Inc. vs. Becton Dickinson and Company et al. (Case No. 5333*JG98, Brazoria County District Court), filed on August 4, 1998. Plaintiff, a manufacturer of retractable syringes, alleges that our contracts with GPOs exclude plaintiff from the market in syringes and blood collection products, in violation of the TFEA. Plaintiff also alleges that we have conspired with other manufacturers to maintain our market share in these products. Plaintiff seeks money damages. The pending action is in preliminary stages. We intend to mount a vigorous defense in this action.

We are also involved in other legal proceedings and claims which arise in the ordinary course of business, both as a plaintiff and a defendant.

In our opinion, the results of the above matters, individually and in the aggregate, are not expected to have a material effect on our results of operations, financial condition or cash flows.

We believe that our operations comply in all material respects with applicable laws and regulations. We are a party to a number of Federal proceedings in the United States brought under the Comprehensive Environment Response, Compensation and Liability Act, also known as “Superfund,” and similar state laws. For all sites, there are other potentially responsible parties that may be jointly or severally liable to pay all cleanup costs. We accrue costs for an estimated environmental liability based upon our best estimate within the range of probable losses, without considering possible third-party recoveries. We believe that any reasonably possible losses in excess of accruals would not have a material effect on our results of operations, financial condition, or cash flows.

In April 1998, the American Institute of Certified Public Accountants issued Statement of Position 98-5 “Reporting on the Costs of Start-Up Activities.” We are required to adopt the provisions of this Statement no later than its fiscal year 2000. This Statement provides guidance on the financial reporting of start-up and organization costs and requires such costs, as defined, to be expensed as incurred. Adoption of this Statement is not expected to have a material impact on our results of operations or financial condition.

In June 1998, the FASB issued SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities.” We are required to adopt the provisions of this Statement no later than the beginning of its fiscal year 2001. This Statement requires that all derivatives be recorded in the balance sheet as either an asset or liability measured at fair value and that changes in fair value be recognized currently in earnings unless specific hedge accounting criteria are met. We are in the process of evaluating this Statement and have not yet determined the future impact on our consolidated financial statements.

Worldwide revenues for 1998 rose 11%, to $3.1 billion. Excluding the estimated impact of unfavorable foreign currency translation, worldwide revenues grew 14% with acquisitions contributing 7%. Underlying revenue growth, which excludes the effects of foreign currency translation and acquisitions in 1998 and 1997, resulted primarily from volume increases and an improved product mix in all segments. Medical revenues for 1998 were $1.7 billion, an increase of 14% over 1997. Underlying revenue growth in the Medical segment was led by strong sales of infusion therapy and hypodermic products and increased sales of prefillable syringes to pharmaceutical companies. Biosciences revenues for 1998 of $924 million represented an increase of 8% over 1997. Underlying revenue growth in the Biosciences segment was led by strong sales of FACS brand flow cytometry systems. Preanalytical revenues for 1998 were $478 million, an increase of 7%, primarily due to continued strong sales of sample collection devices fueled by the conversion of the market to advanced protection devices.