Cover Page To Our Shareholders Issues and Answers: Contributions That Count Enterprise Profile Financials Summary Financial Review Report of Management Report of Ernst & Young LLP, Independent Auditors Financial Statements Notes to Consolidated Financial Statements    1 Summary of Significant Accounting Policies    2 Accounting Changes    3 Employee Stock Ownership Plan/Savings Incentive Plan    4 Benefit Plans    5 Special and Other Charges    6 Acquisitions    7 Income Taxes    8 Supplemental Financial Information    9 Debt   10 Financial Instruments   11 Shareholders' Equity   12 Comprehensive Income   13 Commitments and Contingencies   14 Stock Plans   15 Earnings Per Share   16 Segment Data Corporate Information Board of Directors and Officers

Notes to Consolidated Financial Statements 10    Financial Instruments Foreign Exchange Contracts and Currency Options The Company uses foreign exchange forward contracts and currency options to reduce the effect of fluctuating foreign exchange rates on certain foreign currency denominated receivables and payables, third-party product sales, and investments in foreign subsidiaries. Gains and losses on the derivatives are intended to offset gains and losses on the hedged transaction. The Company's foreign currency risk exposure is primarily in Western Europe, Asia Pacific, Japan, and Latin America.     The Company hedges substantially all of its transactional foreign exchange exposures, primarily intercompany payables and receivables, through the use of forward contracts and currency options with maturities of less than 12 months. Gains or losses on these contracts are largely offset by gains and losses on the underlying hedged items. These foreign exchange contracts do not qualify for hedge accounting under SFAS No. 133.     In addition, the Company enters into option and forward contracts to hedge certain forecasted sales that are denominated in foreign currencies. These contracts are designated as cash flow hedges, as defined by SFAS No. 133, and are effective as hedges of these revenues. These contracts are intended to reduce the risk that the Company's cash flows from certain third-party transactions will be adversely affected by changes in foreign currency exchange rates. Changes in the effective portion of the fair value of these contracts are included in other comprehensive income until the hedged sales transactions are recognized in earnings. Once the hedged transaction occurs, the gain or loss on the contract is reclassified from accumulated other comprehensive income to revenues. The Company recorded hedge net gains of $3,502 and $12,368 to revenues in fiscal 2002 and 2001, respectively.     Fiscal 2002 and 2001 revenues included hedging costs of $10,612 and $9,861, respectively, related to the purchased option contracts. In April 2001, the Company re-designated its cash flow hedges pursuant to Statement 133 implementation guidance released by the Derivatives Implementation Group of the FASB. This interpretation allows changes in time value of options to be included in effectiveness testing. Prior to the release of this guidance and the re-designation of these hedges, the Company recorded the change in the time value of options in Other expense, net. Hedging costs related to the option contracts of $8,121 in 2001 that had been recorded in Other expense, net have been reclassified as a reduction in revenues, to conform with current year presentation. The Company continues to record to Other expense, net the premium on the forward contracts, which is excluded from the assessment of hedge effectiveness. This premium was $2,209 and $994 in fiscal 2002 and 2001, respectively. All outstanding contracts that were designated as cash flow hedges as of September 30, 2002, will mature by September 30, 2003.     The Company enters into forward exchange contracts to hedge its net investments in certain foreign subsidiaries. These forward contracts are designated and effective as net investment hedges, as defined by SFAS No. 133. The Company recorded a loss of $1,071 in fiscal 2002 and a gain of $2,321 in fiscal 2001, to foreign currency translation adjustments in other comprehensive income for the change in the fair value of the contracts. Interest Rate Swaps The Company's policy is to manage interest cost using a mix of fixed and floating debt. The Company has entered into interest rate swaps in which it agrees to exchange, at specified intervals, the difference between fixed and floating interest amounts calculated by reference to an agreed-upon notional principal amount. These swaps are designated as either fair value or cash flow hedges, as defined by SFAS No. 133. For fair value hedges, changes in the fair value of the interest rate swaps offset changes in the fair value of the fixed rate debt due to changes in market interest rates. For cash flow hedges, changes in the fair value of the interest rate swap are offset by changes in other comprehensive income. There was no ineffective portion to the hedges recognized in earnings during the period.     As of September 30, 2002, other comprehensive income included an unrealized loss of $4,393, net of tax, relating to cash flow hedges. Fair Value of Financial Instruments Cash equivalents, short-term investments and short-term debt are carried at cost, which approximates fair value. Other investments are classified as available-for-sale securities. Available-forsale securities are carried at fair value, with unrecognized gains and losses reported in other comprehensive income, net of taxes. Losses on available-for-sale securities are recognized when a loss is determined to be other than temporary or when realized. In accordance with the provisions of SFAS No. 133, forward exchange contracts and currency options are recorded at fair value. Fair values were estimated based on market prices, where available, or dealer quotes. The fair value of certain long-term debt is based on redemption value. The estimated fair values of the Company's financial instruments at September 30, 2002 and 2001 were as follows:   2002   2001   Carrying Value Fair Value   Carrying Value Fair Value   Assets:   Other investments   (non-current)(A)  $  6,431  $  6,337  $  20,299  $  13,627   Currency options(B)    6,878    6,878    6,833    6,833   Forward exchange contracts(B)    3,480    3,480    -    -   Interest rate swaps(B)    36,314    36,314    12,113    12,113 Liabilities:   Forward exchange contracts(C)    -    -    1,635    1,635   Long-term debt    802,967    855,331    782,996    806,337   Interest rate swaps(C)    1,677    1,677    -    - (A) Included in Other non-current assets. (B) Included in Prepaid expenses, deferred taxes and other. (C) Included in Accrued Expenses. Concentration of Credit Risk Substantially all of the Company's trade receivables are due from public and private entities involved in the healthcare industry. Due to the large size and diversity of the Company's customer base, concentrations of credit risk with respect to trade receivables are limited. The Company does not normally require collateral. The Company is exposed to credit loss in the event of nonperformance by financial institutions with which it conducts business. However, this loss is limited to the amounts, if any, by which the obligations of the counterparty to the financial instrument contract exceed the obligations of the Company. The Company also minimizes exposure to credit risk by dealing with a diversified group of major financial institutions.