Jan A. Bertsch

Thank you, Kirk, and good morning. First of all, let me tell you how excited I am to be a part of the Sigma-Aldrich team. And I look forward to meeting you all personally in the near term. As reported in today's release, first quarter sales were $665 million, a reported increase of 5% over last year's first quarter and a new quarterly high for the company.

During the quarter, our recent acquisitions, primarily BioReliance, added roughly $25 million to our sales, and you may recall that we owned BioReliance for only 2 months in the first quarter. Excluding the sales associated with these acquisitions, we still achieved the highest quarterly sales in our history. Our organic sales growth, which excludes the impact of changes in foreign currency exchange rates and the benefit of our recent acquisitions, was 3%, and this was in line with our expectation. Our Research and SAFC businesses contributed to this growth at 4% and 1%, respectively. I'll comment on those increases shortly.

Acquisitions, primarily BioReliance, added another 4% to growth, while changes in foreign currency exchange rates reduced otherwise reportable sales growth by 2%.

Our first quarter operating income was the highest in the company's history at $172 million. Net income was $117 million, and reported diluted EPS was $0.96. Our adjusted diluted EPS which, in the first quarter of 2012, excludes $0.03 of onetime acquisition-related transaction costs, was $0.99, a 5% increase over diluted adjusted EPS of $0.94 in the first quarter of last year. 2011's first quarter diluted adjusted EPS excluded $0.01 of restructuring charges and $0.04 tax benefit from the release of some tax reserves.

Our effective tax rate for the quarter was 31.6% compared to 27.9% in last year's first quarter. The higher effective tax rate for the first quarter of 2012 compared to the same period in 2011 is attributable to nonrecurring benefits realized in 2011 from the reversal of an uncertain tax position reserve. We expect our full-year 2012 effective tax rate to be in the range of 30% to 31% compared to 28.6% in 2011. This increase in the effective tax rate in 2012 compared to 2011 is reflective of the higher level of reserve adjustments that resulted in the net tax benefit in 2011. These are not expected to totally repeat in 2012. Beyond 2012, we believe that our long-term effective tax rate could improve in excess of 200 basis points, given the strong business performance we're seeing in countries having a more favorable tax regime than the U.S.

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