WIXLIB

2008 Annual Review

Business OverviewOur Water business is the world leader in providingmicrobiology testing technologies that ensure safe water.In the Dairy and Production Animal Segment businesses,we are a leading worldwide provider of diagnostic tests andhealth monitoring systems for milk safety and productionanimal health. OPTI Medical Systems provides blood gas andelectrolyte analyzers and reagents to both our companionanimal business and the human market.IDEXX’s strategy is to drive growth through investmentin innovative technologies that create new products andadvance existing offerings to support improvements in ourcustomers’ businesses.Our long-standing mission is to be a great company by creatingexceptional long-term value for our employees, customers, andstockholders through worldwide leadership in our businesses.March 2009COVER PHOTO: EMMETT, RHODESIAN RIDGEBACK, OWNED AND PHOTOGRAPHED BY LUCIENNE TIMBLIN, IDEXX EMPLOYEE SINCE 2006IDEXX Laboratories, Inc. is the global market leader indiagnostics and information technology solutions for animalhealth and water and milk quality. Our largest business,the Companion Animal Group, serves more than 50,000veterinary practices worldwide and offers a portfolio ofpet-side diagnostic tests, point-of-care instrument systemsand associated reagents, reference laboratory services, digitalradiography, and practice management solutions. Our productsand services provide tools that enable a high level of integrationand automation to support advanced veterinary medical care,practice productivity, and profitability.

Performance Highlights· 2008 marked the year that IDEXX crossed the 1 billion threshold as revenueincreased 11% to 1.024 billion.· Diluted earnings per share (EPS) were 1.87, an increase of 28% over 2007.After adjusting for discrete items in both years, EPS grew 20%.*· Operating cash flow was 143 million.· Net debt was 72 million at the end of 2008.†Production Animal Segment 8%Water 7%Other (Dairy, OPTI Medical) 3%Companion Animal Group 82%2008 Revenue by Business Segment 549 15%04 638 16%05Annual Revenue MILLIONS*In 2008, discrete items included a net charge of 0.06 per share related to the disposition of certain pharmaceuticalproduct lines and pharmaceutical assets and a discrete income tax benefit of 0.02 per share. In 2007, discreteitems included a net charge of 0.10 per share for the write-down of certain pharmaceutical assets and discretecosts associated with acquisitions of 0.02 per share.†Net debt is defined as the balance outstanding on our revolving line of credit less cash on hand. 739 16%06 923 25%07 1,024 11%08

1.460507 1.15 1.090406 1.42 1.8708Earnings Per Share: Diluted 143 1100608 9504 11705 13507Operating Cash Flow MILLIONsFinancial HighlightsYear ended December 31,Dollars and shares in millions, except per share data200620072008Total revenue7399231,024Earnings per share: 38438Weighted average shares outstanding: dilutedNet cash provided by operating activitiesCash and investmentsDebtStockholders’ equity2

Real. Time. Care. Advanced diagnostic tests, gold-standard accuracy,automation, integrated information, and ease of use defineIDEXX in-house diagnostics. Pet-side tests, analyzers, anddigital imaging allow veterinarians to enhance client valuewith real-time answers and follow-up recommendationsduring their pet’s visit.Comprehensive, integrated IDEXX in-house diagnosticssupport practice growth by giving veterinarians the toolsthey need to:· Improve clients’ perception of value andcompliance with follow-up medical treatment,and strengthen loyalty to the practice throughface-to-face communications and review oflaboratory results and diagnostic images.· Increase staff efficiencies with acceleratedlaboratory and imaging throughput and automationof manual work flow and paper handling.· Make more informed medical decisions withimmediate and easy access to all diagnostic resultsin one report.· Support the adoption of electronic medicalrecords, further increasing the standard of careand staff productivity.· Safeguard practice income through capturing allservice charges on invoices in real time, increasingpractice revenue and profitability.4

Companion Animal Group Revenue increased 11% to 834 millionIDEXX VetLab SuiteOur largest line of business includes IDEXX VetLab in-house diagnosticinstruments and associated consumables. Veterinary practices use the flexibletesting options of IDEXX VetLab analyzers to provide a higher level of careand service. The complete in-house laboratory provides comprehensive,real-time results for chemistry, hematology, urinalysis, electrolytes,endocrinology, blood gases, coagulation, and infectious diseases. All testresults, including SNAP test results, are simply and seamlessly integratedthrough the IDEXX VetLab Station for archiving, easy access to historicalresults, and a single, easy-to-read report. IDEXX SmartService Solutionsprovides innovative remote technical service for recently introducedIDEXX VetLab analyzers and will soon provide automatic data backup,software upgrades, and more features for greater practice efficiencies.The IDEXX VetLab business line is a “razor and blade” business model, withroughly three quarters of the line’s revenue derived from recurring sales ofproprietary consumables, services, and accessories.RECENT Innovations· Catalyst Dx Chemistry AnalyzerMarch 2008· SNAPshot Dx AnalyzerMarch 2008· SNAP T4 Test with plasmacapability for SNAPshot Dxand SNAP Reader analyzersApril 2008· IDEXX VetLab Station LaboratoryInformation Management Systemversion 2.30April 2008· IDEXX VetLab Sample Prep RackMay 2008· IDEXX SmartService Solutions forIDEXX VetLab SuiteNovember 2008· Electrolytes 8 Plus cassette forVetStat Electrolyte and BloodGas AnalyzerJanuary 2009· Catalyst Dx software upgradewith automated dilution capabilityand urine protein:creatinine ratioJanuary 2009· IDEXX VetLab Station LaboratoryInformation Management Systemversion 2.40January 2009· SNAPshot Dx capabilities willbe enhanced to automaticallytime, interpret, and recordSNAP FIV/FeLV Combo andSNAP cPL qualitative testsSecond Quarter 2009

Rapid AssaysThe family of SNAP ELISA tests offers simple, quick, and accurate pet-sidetesting for a number of infectious diseases, including Lyme disease, canineand feline heartworm, Giardia, feline immunodeficiency virus (FIV), andfeline leukemia virus (FeLV). SNAP tests support flexible sample options withplasma, serum, or whole blood. Fast results in less than 10 minutes provideanswers before the patient leaves the clinic. The SNAP platform uses ELISAtechnology, trusted for its proven accuracy.recent Innovations· SNAP Feline Triple Testwith feline heartwormDecember 2008In 2009, the SNAPshot Dx Analyzer will provide the capability to automatetiming and interpretation of SNAP results, including incorporation into theelectronic medical record.Practice Information Systems and Digital RadiographyThe Cornerstone Practice Information Management System givesveterinarians an important tool to easily and efficiently manage patients,inventory, schedules, and invoices to raise compliance and testing acceptance,improve client satisfaction, and increase clinic revenue.Cornerstone software supports complete patient electronic medical records,including digital images, moving veterinary practices away from paperworkand manual entering of information and toward the paperless or paper-lightpractice. IDEXX provides software and hardware support to Cornerstonecustomers and related supplies and services to users of Cornerstone softwareas well as other systems.IDEXX offers computed and direct digital imaging systems for companionanimal and equine practices. We have developed our own picture archivingand communication systems, IDEXX-PACS Imaging Software forsmall-animal systems and IDEXX EquiView PACS Imaging Softwarefor equine systems. These systems allow viewing, enhancement, management,storage, and retrieval of digital images. They also integrate our digital imagingsystems to Cornerstone and other practice information management systemsto provide consolidated patient medical records.recent Innovations· IDEXX-PACS software version 3.0January 2008· Cornerstone software version 7.5enhances electronic whiteboardand digital-imaging capabilitiesand provides full integration withthe IDEXX Digital Imaging lineJuly 2008· Next generation IDEXX-CR 1417Digital Imaging SystemOctober 2008· EquiView PACS software version 3.1December 2008· Cornerstone Coaching SeriesJanuary 2009· Cornerstone software version 7.6advances inventory management,introduces patient ID cards, andintegrates with Intuit QuickBooks January 20096

Reference Laboratory ServicesOur IDEXX Reference Laboratoriesbusiness comprises over 40 locationsproviding reference laboratorytesting and consulting servicesto veterinarians worldwide. Ourreference laboratory services includea large selection of diagnostictests, panels, and profiles to detectdisease states and conditions,featuring several proprietarytechnologies introduced as a resultof our research and developmentinvestments in veterinarydiagnostics. LabREXX Softwareprovides practices with convenient,time-saving test requisition andresults delivery via VetConnect online services. More than70 board-certified veterinaryspecialists, including anatomicand clinical pathologists and internalmedicine specialists, deliver caseguidance to our customers.8Business Developmentsrecent Innovations· Acquired a reference laboratoryin Barcelona, SpainJanuary 2008· LabREXX functionality on vetconnect.comMarch 2008· Partnered with Sysmex Corporationto integrate the Sysmex XT-2000i VAutomated Hematology Analyzerinto laboratoriesFebruary 2008· Opened a new reference laboratoryin Plainview, New YorkMay 2008· Partnered with McAllister SoftwareSystems to launch LabREXX throughAVImark softwareAugust 2008· Opened a new core referencelaboratory in Memphis, TennesseeNovember 2008· Rhodococcus equi RealPCR TestMay 2008· Equine Herpesvirus Type 4 (EHV-4)RealPCR Test and EquineNeurologic PanelJuly 2008· Cardiopet proBNP TestJuly 2008· Equine Respiratory RealPCR PanelSeptember 2008· Spec fPL TestOctober 2008· Canine and Feline DiarrheaRealPCR PanelsJanuary 2009

Water Revenue increased 12% to 74 millionIDEXX is a global leader in providing tests fordetecting microbial contamination in drinkingand other water supplies.Business Developments·C olilert -18/Quanti-Tray method approvedfor drinking water in BelgiumApril 2008· Colilert-18/Quanti-Tray method approvedfor drinking water in CroatiaMay 2008· Colilert-18/Quanti-Tray andEnterolert /Quanti-Tray methodsapproved for bathing water in SwedenMay 2008· Colilert /Quanti-Tray method approvedfor drinking water for livestock and poultryin ChinaJuly 2008· IDEXX Laboratories (Shanghai) Co. Ltd.establishedNovember 2008