What changed in this filing

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Item 9A. Controls and Procedures

2023-02-23 compared with 2022-02-24 · 307 added, 392 removed, 1763 unchanged (28% of the section changed)

4 unchanged sentences

Based on such evaluation, the company’s chief executive officer and chief financial officer concluded that, as of the end of such period, the company’s disclosure controls and procedures were effective at the reasonable assurance level.

THERMO FISHER SCIENTIFIC INC.

Changes in Internal Control over Financial Reporting

There have been no changes in the company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended December 31, 2022, that have materially affected or are reasonably likely to materially affect the company’s internal control over financial reporting.

THERMO FISHER SCIENTIFIC INC.

Management’s Annual Report on Internal Control Over Financial Reporting

3 unchanged sentences

Based on this assessment, the company’s management concluded that, as of December 31, 2022, the company’s internal control over financial reporting was effective.

Management’s assessment of the effectiveness of the company’s internal control over financial reporting as of December 31, 2021, excluded PPD, Inc., Mesa Biotech, Inc.

and PeproTech, Inc., which were acquired by the company in 2021 in separate purchase business combinations.

These entities, whose total assets and total revenues were excluded from the company’s assessment, represented approximately 5% and 2%, respectively, of the related consolidated amounts as of and for the year ended December 31, 2021.

Based upon Securities and Exchange Commission staff guidance, companies are allowed to exclude certain acquisitions from their assessments of internal control over financial reporting during the first year of an acquisition while integrating the acquired companies.

The company’s independent registered public accounting firm, PricewaterhouseCoopers LLP, has audited the effectiveness of the company’s internal control over financial reporting as of December 31, 2022, as stated in their report that appears on page F-2 of this Annual Report on Form 10-K.

Other Information

On February 24, 2022, the company and Mark P.

Stevenson entered into a consulting agreement relating to ongoing services that Mr.

Stevenson will provide to the company following his last day as an employee on March 18, 2022.

On February 22, 2023, the Board of Directors of the company amended and restated the company’s By-Laws, effective immediately, to conform the By-laws to the Securities and Exchange Commission’s universal proxy rules contained in Rule 14a-19 under the Securities Exchange Act of 1934, and certain 2022 amendments to the General Corporation Law of the State of Delaware (the DGCL).

The amendments to the By-laws include additions to Article I, Section 9 to implement the requirements of Rule 14a-19 regarding the nomination and solicitation of proxies for director candidates.

The amendments to the By-laws also include revisions to Article I, Sections 4 and 8 to conform with the 2022 DGCL amendments.

The foregoing description of the amendments to the By-laws does not purport to be complete and is qualified in its entirety by reference to the full text of the By-laws, as amended and restated, a copy of which is attached as Exhibit 3.4 and incorporated by reference herein.

On February 22, 2023, the company entered into a consulting agreement with Mark P.

Stevenson, former Executive Vice President and Chief Operating Officer of the company, relating to services that Mr.

Stevenson will provide to the company.

Under the consulting agreement, which has a term ending March 1, 2024, Mr.

Stevenson will serve on the company’s Scientific Advisory Board and will also provide ongoing advice and services relating to COVID-19 research and products.

Stevenson will serve on the company’s Scientific Advisory Board and will also provide ongoing advice and services as requested by the company.

During the term of the consulting agreement, Mr.

Stevenson’s outstanding and unvested equity awards granted in fiscal year 2021 will continue to vest in accordance with their original terms based on his continued service to the company and, if he provides consulting services through March 1, 2023, his outstanding and unvested equity awards granted in fiscal year 2021 will vest to the same extent as if he had retired as an employee on March 1, 2023 and the post-termination exercise period of all of Mr.

Stevenson’s stock options, to the extent vested and exercisable on March 1, 2023, will be extended until the original maximum term of such stock options.

Stevenson will receive compensation of $8,000 per month.

The agreement also contains provisions that restrict Mr.

Stevenson’s ability during the term of the consulting agreement, and (i) for a period of twelve months thereafter, to work for or provide consulting services to, any competitor of the company, and (ii) for a period of eighteen months thereafter, to solicit for hire employees or consultants of the company or to solicit customers or clients of the company.

The foregoing summary of the consulting agreement is subject to, and qualified in its entirety by, the full text of such agreement, which is filed as an exhibit to this Annual Report on Form 10-K.

Stevenson’s ability during the term of the consulting agreement (i) to work for or provide consulting services to, any competitor of the company, and (ii) to solicit for hire employees or consultants of the company or to solicit customers or clients of the company.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

THERMO FISHER SCIENTIFIC INC.

Directors, Executive Officers and Corporate Governance

The information with respect to directors required by this Item will be contained in our definitive proxy statement to be filed with the SEC not later than 120 days after the close of business of the fiscal year (2022 Definitive Proxy Statement) including under “Corporate governance—Board of directors—selection, skills and experience—Director nominee skills, experience, and background,” and “Corporate governance—Board of directors—selection, skills and experience—Nominees and incumbent directors,” and is incorporated in this report by reference.

The information with respect to executive officers required by this Item is included in Item 1 of Part I of this report.

The other information required by this Item will be contained in our 2022 Definitive Proxy Statement including under “Corporate governance—Board practices, policies and processes —Corporate Governance Guidelines” and “Corporate Governance—Board leadership structure—Board committees,” and is incorporated in this report by reference.

The other information required by this Item will be contained in our 2023 Definitive Proxy Statement including under “Corporate governance,” and is incorporated in this report by reference.

Executive Compensation

The information required by this Item will be contained in our 2022 Definitive Proxy Statement including under “Corporate governance—Compensation of directors,” and “Executive compensation,” and is incorporated in this report by reference.

The information required by this Item will be contained in our 2023 Definitive Proxy Statement including under “Corporate governance,” and “Executive compensation,” and is incorporated in this report by reference.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The information required by this Item will be contained in our 2022 Definitive Proxy Statement including under “Information about stock ownership—Equity compensation plan information” and “Information about stock ownership—Security ownership of certain beneficial owners and management,” and is incorporated in this report by reference.

The information required by this Item will be contained in our 2023 Definitive Proxy Statement including under “Information about stock ownership,” and is incorporated in this report by reference.

THERMO FISHER SCIENTIFIC INC.

Certain Relationships and Related Transactions, and Director Independence

The information required by this Item will be contained in our 2022 Definitive Proxy Statement including under “Corporate governance—Board practices, policies and processes—Related person transactions,” and “Corporate governance—Board leadership structure—How we assess director independence,” and is incorporated in this report by reference.

The information required by this Item will be contained in our 2023 Definitive Proxy Statement including under “Corporate governance,” and is incorporated in this report by reference.

Principal Accountant Fees and Services

The information required by this Item will be contained in our 2022 Definitive Proxy Statement including under “Audit matters—Independent auditor fees” and “Audit matters—Audit Committee’s pre-approval policies and procedures,” and is incorporated in this report by reference.

THERMO FISHER SCIENTIFIC INC.

The information required by this Item will be contained in our 2023 Definitive Proxy Statement including under “Audit matters,” and is incorporated in this report by reference.

Exhibits and Financial Statement Schedules

11 unchanged sentences

Form 10-K Summary

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

February 24, 2022 THERMO FISHER SCIENTIFIC INC.

Chairman, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, as of February 24, 2022.

/s/ Thomas J.

Chairman, President and Chief Executive Officer Lead Director

(Principal Executive Officer)

/s/ Stephen Williamson By:

Stephen Williamson Jim P.

Senior Vice President and Chief Financial Officer Director

(Principal Financial Officer)

/s/ Joseph R.

Holmes James C.

Vice President and Chief Accounting Officer Director

(Principal Accounting Officer)

/s/ Nelson J.

Director Director

Martin Harris By:

/s/ Debora L.

Martin Harris Debora L.

Director Director

Jacks Scott M.

Director Director

Alexandra Keith By:

Alexandra Keith Dion J.

Director Director

THERMO FISHER SCIENTIFIC INC.

11 unchanged sentences

1-8002] and incorporated in this document by reference).

3.4 Amended and Restated By-Laws of the Registrant, as amended and effective as of July 8, 2021 (filed as Exhibit 3.1 to the Registrant’s Current Report on Form 8-K filed July 9, 2021 [File No.

1-8002] and incorporated in this document by reference).

3.4 Amended and Restated By-Laws of the Registrant, as amended and effective as of February 22, 2023

The Registrant agrees, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, to furnish to the Commission, upon request, a copy of each instrument with respect to long-term debt of the Registrant or its consolidated subsidiaries.

7 unchanged sentences

1-8002] and incorporated in this document by reference).

4.4 Eleventh Supplemental Indenture, dated as of December 9, 2015, between the Company and The Bank of New York Mellon Trust Company, N.A.

(filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed December 9, 2015 [File No.

1-8002] and incorporated in this document by reference).

4.4 Thirteenth Supplemental Indenture, dated as of September 12, 2016, between the Company and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed September 12, 2016 [File No.

14 unchanged sentences

1-8002] and incorporated in this document by reference).

4.13 Third Supplemental Indenture, dated as of October 18, 2021, among Thermo Fisher Scientific (Finance I) B.V.

(Thermo Fisher International) , as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 18, 2021 [File No.

1-8002] and incorporated in this document by reference).

4.12 Twenty-Third Supplemental Indenture, dated as of October 22, 2021, between the Company, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 22, 2021 [File No.

1-8002] and incorporated in this document by reference).

4.15 Indenture, dated as of August 9, 2016, among Thermo Fisher International, as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed August 9, 2016 [File No.

4.13 Twenty-Fourth Supplemental Indenture, dated as of October 20, 2022, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 20, 2022 [File No.

1-8002] and incorporated in this document by reference).

4.14 Twenty-Fifth Supplemental Indenture, dated as of November 21, 2022, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed November 21, 2022 [File No.

1-8002] and incorporated in this document by reference).

4.15 Twenty-Sixth Supplemental Indenture, dated as of November 21, 2022, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.3 to the Registrant’s Current Report on Form 8-K filed November 21, 2022 [File No.

1-8002] and incorporated in this document by reference).

THERMO FISHER SCIENTIFIC INC.

1 unchanged sentence

Exhibit Number Description of Exhibit

4.16 Indenture, dated as of August 9, 2016, among Thermo Fisher International, as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed August 9, 2016 [File No.

1-8002] and incorporated in this document by reference).

4.17 Third Supplemental Indenture, dated as of October 18, 2021, among Thermo Fisher Scientific (Finance I) B.V.

1-8002] and incorporated in this document by reference).

4.18 Fourth Supplemental Indenture, dated as of November 18, 2021, among Thermo Fisher Scientific (Finance I) B.V.

10 unchanged sentences

10.4 Summary of Thermo Fisher Scientific Inc.

Annual Non-Man a gement Director Compensation (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed February 24, 2022 [File No.

Annual Non-Management Director Compensation (filed as Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed February 24, 2022 [File No.

1-8002] and incorporated in this document by reference).*

10.5 Summary of 20 21 Annual Cash Incentive Plan *

10.5 Form of Noncompetition Agreement between the Registrant and certain key employees and executive officers, effective as of January 1, 2009 (filed as Exhibit 10.25 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009 [File No.

37 unchanged sentences

1-8002] and incorporated in this document by reference).*

10.18 Form of Executive Change in Control Retention Agreement for Officers (other than Marc N.

Casper) (filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 [File No.

1-8002] and incorporated in this document by reference).*

10.19 Form of Thermo Fisher Scientific Inc.’s Restricted Stock Unit Agreement for Directors (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2011 [File No.

1-8002] and incorporated in this document by reference).*

THERMO FISHER SCIENTIFIC INC.

1 unchanged sentence

Exhibit Number Description of Exhibit

10.20 Form of Thermo Fisher Scientific Inc.’s Performance Restricted Stock Unit Agreemen t effective February 26, 2013 (filed as Exhibit 10.4 to the Registrant’s Current Report on Form 8-K filed February 27, 2013 [File No.

10.17 Form of Executive Change in Control Retention Agreement for Officers (other than Marc N.

Casper) (filed as Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 [File No.

1-8002] and incorporated in this document by reference).*

10.21 Form of Performance Restricted Stock Unit Agreement between Thermo Fisher Scientific Inc.

Casper effective February 26, 2013 (filed as Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed February 27, 2013 [File No.

10.18 Form of Thermo Fisher Scientific Inc.’s Restricted Stock Unit Agreement for Directors (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended April 2, 2011 [File No.

1-8002] and incorporated in this document by reference).*

27 unchanged sentences

1-8002] and incorporated in this document by reference).

10.32 Form of Performance Restricted Stock Unit Agreement effective February 26, 2019 (filed as Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2019 [File No.

1-8002] and incorporated in this document by reference).*

10.33 Form of Performance Restricted Stock Unit Agreement for Marc N.

Casper effective February 26, 2019 (filed as Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q for the quarter ended March 30, 2019 [File No.

1-8002] and incorporated in this document by reference).*

10.29 Letter Agreement between the Registrant and Michel Lagarde dated August 28, 2017 (filed as Exhibit 10.39 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

13 unchanged sentences

1-8002] and incorporated in this document by reference).*

10.39 Form of Thermo Fisher Scientific Inc.’s Performance Restricted Stock Unit Agreeme nt effecti ve as of February 25, 2020 (filed as Exhibit 10.45 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

10.34 Form of Thermo Fisher Scientific Inc.’s Performance Restricted Stock Unit Agreement effective as of February 25, 2020 (filed as Exhibit 10.45 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

1 unchanged sentence

1-8002] and incorporated in this document by reference).*

10.36 Form of Thermo Fisher Scientific Inc.’s Nonstatutory Stock Option Agreement for Officers effective as of February 25, 2020 (filed as Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

THERMO FISHER SCIENTIFIC INC.

1 unchanged sentence

Exhibit Number Description of Exhibit

10.41 Form of Thermo Fisher Scientific Inc.’s Nonstatutory Stock Option Agreement for Office rs effective as of February 25, 2020 (filed as Exhibit 10.47 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

10.37 Form of Performance Restricted Stock Unit Agreement between Thermo Fisher Scientific Inc.

Caspe r effective as of February 25, 2020 (filed as Exhibit 10.48 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

Casper effective as of February 25, 2020 (filed as Exhibit 10.48 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

10.38 Form of Restricted Stock Unit Agreement between Thermo Fisher Scientific Inc.

Caspe r effective as of February 25, 2020 (filed as Exhibit 10.49 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

Casper effective as of February 25, 2020 (filed as Exhibit 10.49 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

10.44 Form of Nonstatu tory Stock Option Agreement between Thermo Fisher Scientific Inc.

Caspe r effective as of February 25, 2020 (filed as Exhibit 10.50 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

10.39 Form of Nonstatutory Stock Option Agreement between Thermo Fisher Scientific Inc.

Casper effective as of February 25, 2020 (filed as Exhibit 10.50 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2019 [File No.

1-8002] and incorporated in this document by reference).*

11 unchanged sentences

10.44 Consulting Agreement between the Registrant and Mark P.

Stevenson, dated February 2 4 , 2022 *

Stevenson, dated February 24, 2022 (filed as Exhibit 10.49 to the Registrant’s Annual Report on Form 10-K for the year ended December 31, 2021 [File No.

1-8002] and incorporated in this document by reference).*

10.45 Amendment to Nonstatutory Stock Option Agreements between Thermo Fisher Scientific Inc.

10.46 Amendment to Restricted Stock Unit Agreements between Thermo Fisher Scientific Inc.

10.47 Amendment to Performance Restricted Stock Unit Agreements between Thermo Fisher Scientific Inc.

21 Subsidiaries of the Registrant .

16 unchanged sentences

Such certification is not deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.

February 23, 2023 THERMO FISHER SCIENTIFIC INC.

Chairman, President and Chief Executive Officer

Alexandra Keith

Chairman, President and Chief Executive Officer Director

(Principal Executive Officer)

/s/ Stephen Williamson By:

Stephen Williamson Jim P.

Senior Vice President and Chief Financial Officer Director

(Principal Financial Officer)

/s/ Joseph R.

Holmes James C.

Vice President and Chief Accounting Officer Director

(Principal Accounting Officer)

/s/ Nelson J.

Director Director

/s/ Debora L.

Chandy Debora L.

Director Director

Martin Harris By:

Martin Harris Scott M.

Director Director

Jacks Dion J.

Director Director

THERMO FISHER SCIENTIFIC INC.

16 unchanged sentences

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.

Change in Accounting Principle

As discussed in Note 1 to the consolidated financial statements, the Company changed the manner in which it accounts for leases in 2019.

Basis for Opinions

7 unchanged sentences

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and

significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

1 unchanged sentence

We believe that our audits provide a reasonable basis for our opinions.

As described in Management’s Annual Report on Internal Control Over Financial Reporting, management has excluded PPD, Inc., Mesa Biotech, Inc.

and PeproTech, Inc.

from its assessment of internal control over financial reporting as of December 31, 2021 because they were acquired by the Company in purchase business combinations during 2021.

We have also excluded PPD, Inc., Mesa Biotech, Inc.

and PeproTech, Inc.

from our audit of internal control over financial reporting.

PPD, Inc., Mesa Biotech, Inc.

and PeproTech, Inc.

are wholly-owned subsidiaries whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting collectively represent approximately 5% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.

Definition and Limitations of Internal Control over Financial Reporting

2 unchanged sentences

(ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

and (iii) provide reasonable assurance regarding prevention or timely

detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

1 unchanged sentence

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

As described in Note 8 to the consolidated financial statements, the Company’s provision for income taxes for the year ended December 31, 2022 was $703 million.

The Company has

deferred tax liabilities, net, of $2,829 million (including a valuation allowance of $968 million) and unrecognized tax benefits of $1,124 million as of December 31, 2021.

The Company has deferred tax liabilities, net, of $1,984 million (including a valuation allowance of $1,322 million) and unrecognized tax benefits of $572 million as of December 31, 2022.

As disclosed by management, the Company operates in numerous countries under many legal forms and, as a result, is subject to the jurisdiction of numerous domestic and non-U.S.

10 unchanged sentences

These procedures included testing the effectiveness of controls relating to the provision for income taxes, deferred tax assets and liabilities, including the valuation allowance, and liabilities for unrecognized tax benefits.

These procedures also included, among others (i) testing the accuracy of the provision for income taxes, including the rate reconciliation and permanent and temporary differences, (ii) evaluating whether the data utilized in the calculations of the provision for income taxes, deferred tax assets and liabilities, and liabilities for unrecognized tax benefits were appropriate and consistent with evidence obtained in other areas of the audit, (iii) evaluating management’s assessment of the realizability of deferred tax assets on a jurisdictional basis, (iv) evaluating the identification of liabilities for unrecognized tax benefits and the reasonableness of the more likely than not determination in consideration of court decisions, legislative actions, statutes of limitations, and developments in tax examinations by jurisdiction, (v) testing the calculation of the liability for unrecognized tax benefits by jurisdiction, including estimates of the amount of income tax benefit expected to be sustained, and (vi) evaluating the adequacy of the Company’s disclosures.

evaluating the identification of liabilities for unrecognized tax benefits and the reasonableness of the more likely than not determination in consideration of court decisions, legislative actions, statutes of limitations, and developments in tax examinations by jurisdiction, (v) testing the calculation of the liability for unrecognized tax benefits by jurisdiction, including estimates of the amount of income tax benefit expected to be sustained, and (vi) evaluating the adequacy of the Company’s disclosures.

Professionals with specialized skill and knowledge were used to assist in evaluating the reasonableness of management’s judgments and estimates related to the application of foreign and domestic tax laws and regulations.

Acquisition of PPD, Inc.

- Valuation of Customer Relationships Intangible Assets

As described in Note 2 to the consolidated financial statements, on December 8, 2021, the Company acquired PPD, Inc.

for $15.99 billion in net cash consideration and $43 million of equity awards exchanged, which resulted in $6,264 million of customer relationships intangible assets being recorded.

As disclosed by management, assumptions and estimates are used in determining the fair value of the customer relationships intangible assets acquired in a business combination.

Management estimates the fair value of acquisition-related customer relationships intangible assets principally based on projections of cash flows that will arise from the customer relationships of PPD, Inc., which include estimates of customer attrition rates.

The projected cash flows are discounted to determine the present value of the assets at the date of the acquisition.

The principal considerations for our determination that performing procedures relating to the valuation of the acquired customer relationships intangible assets from the acquisition of PPD, Inc.

is a critical audit matter are (i) the significant judgment by management when determining the fair value of the acquired customer relationships intangible assets, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to projections of cash flows and discount rates, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

These procedures included testing the effectiveness of controls relating to the acquisition accounting, including controls over management’s valuation of the customer relationships intangible assets.

These procedures also included, among others (i) reading the purchase agreement, (ii) testing management’s process for determining the fair values of the acquired customer relationships intangible assets, (iii) evaluating the appropriateness of the valuation methodology utilizing discounted projected cash flows, (iv) testing the completeness and accuracy of the underlying data used in the discounted projected cash flows, and (v) evaluating the reasonableness of the significant assumptions used by management related to projections of cash flows and discount rates.

Evaluating management’s significant assumption related to projections of cash flows involved evaluating whether the significant assumption used by management was reasonable considering (i) the current and past performance of PPD, Inc., (ii) the consistency with external market and industry data, and (iii) whether the significant assumption was consistent with evidence obtained in other areas of the audit.

Professionals with specialized skill and knowledge were used to assist in evaluating (i) the appropriateness of the valuation methodology utilizing discounted projected cash flows and (ii) the reasonableness of the discount rate significant assumption.

/s/ PricewaterhouseCoopers LLP

69 unchanged sentences

1,471 1,406 1,181

Restructuring and other costs (income)

197 99 ( 413 )

Restructuring and other costs

Total costs and operating expenses

9 unchanged sentences

( 703 ) ( 1,109 ) ( 850 )

Equity in (losses) earnings of unconsolidated entities ( 4 ) ( 3 ) —

Equity in earnings/(losses) of unconsolidated entities ( 172 ) ( 4 ) ( 3 )

Net income 6,960 7,728 6,377

17 unchanged sentences

( 822 ) 373 ( 118 )

Reclassification adjustment for losses included in net income

Unrealized gains and losses on hedging instruments:

Unrealized losses on hedging instruments (net of tax benefit of $ 0 , $ 0 and $ 20 )

— ( 65 ) ( 38 )

Reclassification adjustment for losses included in net income (net of tax benefit of $ 1 , $ 17 and $ 14 )

1 unchanged sentence

Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision (benefit) of $ 9 , $ 11 and $( 1 ))

36 ( 8 ) ( 93 )

Amortization of net loss and prior service benefit included in net periodic pension cost (net of tax benefit of $ 3 , $ 6 and $ 4 )

19 unchanged sentences

( 995 ) ( 647 ) ( 552 )

Gain on sales of businesses

Stock-based compensation

14 unchanged sentences

( 39 ) ( 19,395 ) ( 38 )

Proceeds from sale of business, net of cash divested

Purchase of property, plant and equipment

18 unchanged sentences

( 455 ) ( 395 ) ( 337 )

Net proceeds from issuance of company common stock under employee stock plans

Other financing activities, net

( 91 ) ( 150 ) ( 74 )

Net cash provided by (used in) financing activities

Net cash (used in) provided by financing activities

( 2,810 ) 6,581 959

1 unchanged sentence

( 139 ) 194 176

(Decrease) increase in cash, cash equivalents and restricted cash

Increase (decrease) in cash, cash equivalents and restricted cash

4,046 ( 5,845 ) 7,914

26 unchanged sentences

Balance at December 31, 2020 — 437 437 15,579 28,116 40 ( 6,818 ) ( 2,807 ) 34,507 10 34,517

Cumulative effect of accounting changes

— — — — ( 1 ) — — — ( 1 ) — ( 1 )

Issuance of shares under employees' and directors' stock plans

6 unchanged sentences

— — — — ( 410 ) — — — ( 410 ) — ( 410 )

Recognition upon acquisition 122 — — — — — — — — — —

1 — — — 7,725 — — — 7,725 2 7,727

2 unchanged sentences

Contributions from (distributions to) noncontrolling interests — — — — — — — — — 50 50

— — — 41 — — — — 41 — 41

Balance at December 31, 2021 122 439 439 16,174 35,431 45 ( 8,922 ) ( 2,329 ) 40,793 62 40,855

7 unchanged sentences

— — — — ( 471 ) — — — ( 471 ) — ( 471 )

Recognition upon acquisition 122 — — — — — — — — — —

15 — — — 6,950 — — — 6,950 ( 5 ) 6,945

2 unchanged sentences

Contributions from (distributions to) noncontrolling interests ( 15 ) — — — — — — — — ( 2 ) ( 2 )

— — — 41 — — — — 41 — 41

Balance at December 31, 2022 $ 116 441 $ 441 $ 16,743 $ 41,910 50 $ ( 12,017 ) $ ( 3,099 ) $ 43,978 $ 54 $ 44,032

5 unchanged sentences

Thermo Fisher Scientific Inc.

(the company or Thermo Fisher) enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, improve patient diagnostics and therapies, and increase laboratory productivity.

(the company or Thermo Fisher) enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, increase laboratory productivity, and improve patient health through diagnostics and the development and manufacture of life-changing therapies.

Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics.

5 unchanged sentences

The company has elected the fair value option of accounting for certain of its investments with readily determinable fair values that would otherwise be accounted for under the equity method.

At December 31, 2021, the fair value of such investments was $ 217 million.

At December 31, 2022 and 2021, the fair value of such investments was $ 7 million and $ 217 million, respectively.

Redeemable Noncontrolling Interest

The company owns 60 % of its consolidated subsidiary PPD-SNBL K.K.

The 40 % ownership interest held by a third party is classified as a redeemable noncontrolling interest on the consolidated balance sheet due to certain put options under which the third party may require the company to purchase the remaining ownership interest at its pre-acquisition fair value.

Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

14 unchanged sentences

The company records reimbursement for third-party pass-through and out-of-pocket costs as revenues and the related expenses as costs of revenues.

Contract-related Balances

Accounts receivable include unconditional rights to consideration from customers, which generally represent billings that do not bear interest.

The company maintains allowances for doubtful accounts for estimates of expected losses resulting from

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

the inability of its customers to pay amounts due.

Contract-related Balances

Accounts receivable include unconditional rights to consideration from customers, which generally represent billings that do not bear interest.

The company maintains allowances for doubtful accounts for estimates of expected losses resulting from the inability of its customers to pay amounts due.

The allowance for doubtful accounts is the company’s best estimate of the amount of probable credit losses in existing accounts receivable.

33 unchanged sentences

Accounting for the timing and amount of termination benefits provided by the company to employees is determined based on whether:

(a) the company has a substantive plan to provide such benefits, (b) the company has a written employment contract with the affected employees that includes a provision for such benefits, (c) the termination benefits are due to the occurrence of an event specified in an existing plan or agreement, or (d) the termination benefits are a one-time benefit.

In certain circumstances, employee termination benefits may meet more than one of the characteristics listed above and therefore, may have individual elements that are subject to different accounting models.

(a) the company has a substantive plan to provide such benefits, (b) the company has a written employment

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

contract with the affected employees that includes a provision for such benefits, (c) the termination benefits are due to the occurrence of an event specified in an existing plan or agreement, or (d) the termination benefits are a one-time benefit.

From time to time when executing a restructuring or exit plan, the company also incurs costs other than termination benefits, such as lease termination costs, that are not associated with or will not be incurred to generate revenues.

29 unchanged sentences

The cumulative pre-tax effect of this change in accounting principle of $ 33 million was recorded as an increase to inventories and a decrease to cost of product revenues in the third quarter of 2021.

This change was recorded in the Laboratory Products and Biopharma Services ($ 20 million) and Specialty Diagnostics ($ 13 million) segments.

The value of inventories maintained using the LIFO method was $ 274 million at December 31, 2020, which was below estimated replacement cost by $ 49 million.

Reductions to cost of revenues as a result of the liquidation of LIFO inventories were nominal during 2019, 2020 and the first half of 2021.

This change was recorded in the Laboratory Products and

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Biopharma Services ($ 20 million) and Specialty Diagnostics ($ 13 million) segments.

Reductions to cost of revenues as a result of the liquidation of LIFO inventories were nominal during 2020 and the first half of 2021.

Property, Plant and Equipment

12 unchanged sentences

Machinery, equipment and leasehold improvements 7,967 7,020

Construction in progress 2,695 2,567

Property, plant and equipment, at cost 14,269 12,593

28 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The estimated future amortization expense of acquisition-related intangible assets with definite lives is as follows:

The estimated future amortization expense of acquisition-related intangible assets with definite lives as of December 31, 2022 is as follows:

(In millions)

22 unchanged sentences

$ 8,590 $ 5,079 $ 3,370 $ 9,002 $ 26,041

1,560 56 8 14,400 16,024

Currency translation

2 unchanged sentences

10,143 5,043 3,277 23,461 41,924

Finalization of purchase price allocations for 2021 acquisitions

9 — — 168 177

23 unchanged sentences

The company uses short-term forward and option currency exchange contracts primarily to hedge certain balance sheet and operational exposures resulting from changes in currency exchange rates, predominantly intercompany loans and cash balances that are denominated in currencies other than the functional currencies of the respective operations.

The currency-exchange contracts principally hedge transactions denominated in euro, Swiss franc, British pounds sterling, Canadian dollars, Czech koruna, Japanese yen and Hong Kong dollars.

The currency-exchange contracts principally hedge transactions denominated in euro, British pounds sterling, Singapore dollars, Japanese yen, Hong Kong dollars, Czech koruna and Swedish krona.

The company does not hold or engage in transactions involving derivative instruments for purposes other than risk management.

4 unchanged sentences

Net investment hedges.

The company uses foreign currency-denominated debt and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates.

A portion of the company’s euro-denominated senior notes and its cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation.

Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and contract fair value changes on the cross-currency interest rate swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.

The company uses foreign currency-denominated debt, certain foreign-denominated payables, and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates.

A portion of the company’s euro-denominated senior notes, certain foreign-denominated payables, and its cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation.

Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and certain foreign-denominated payables, and contract fair value changes on the cross-currency interest rate swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.

Government Assistance

From time to time, the company receives assistance from various governmental agencies generally in the form of cash or non-income tax credits.

These programs help offset the costs of certain research and development activities, facility construction and expansion efforts, or hiring objectives.

When the company believes that it is probable that it will meet the conditions tied to the assistance, it offsets the associated expense in the consolidated income statement.

Such amounts were not material to the consolidated financial statements as of and for the year ended December 31, 2022.

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Use of Estimates

2 unchanged sentences

Risks and uncertainties associated with the ongoing COVID-19 global pandemic materially adversely affected certain of the company’s businesses in 2020, particularly in the Analytical Instruments segment and, to a lesser extent, some businesses within the other three segments.

The negative impacts significantly lessened in 2021.

The extent and duration of negative impacts in the future, which

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may include inflationary pressures and supply chain disruptions, are uncertain and may require changes to estimates.

The negative impacts significantly lessened in 2021 and 2022.

The extent and duration of negative impacts in the future, which may include inflationary pressures and supply chain disruptions, are uncertain and may require changes to estimates.

Actual results could differ from those estimates.

Recent Accounting Pronouncements

In September 2022, the FASB issued new guidance to require entities to disclose information about supplier finance programs.

Among other things, the new guidance requires expanded disclosure about key program terms, payment terms, and amounts outstanding for obligations under these programs for each period presented.

The company will adopt some aspects of this guidance in 2023 using a retrospective method and other aspects in 2024 using a prospective method.

The adoption of this guidance is not expected to have a material impact on the company’s disclosures;

however, the impact in future periods will be dependent on the extent of arrangements of this nature entered into by the company

In November 2021, the FASB issued new guidance to require entities to disclose information about certain types of government assistance they receive, including cash grants and tax credits.

Among other things, the new guidance requires expanded disclosure regarding the qualitative and quantitative characteristics of the nature, amount, timing, and significant terms and conditions of transactions with a government arising from a grant or other forms of assistance accounted for under a contribution model.

The company will adopt this guidance in 2022 using a prospective method.

The adoption of this guidance is not expected to have a material impact on the company’s disclosures;

however, the impact will be dependent on the extent of transactions of this nature entered into by the company in periods subsequent to the date of adoption.

The company adopted this guidance in the fourth quarter of 2022 using a prospective method.

The adoption of this guidance did not have a material impact on the company’s disclosures;

however, the impact in future periods will be dependent on the extent of future transactions of this nature entered into by the company.

In October 2021, the FASB amended guidance to recognize and measure contract assets and contract liabilities acquired in a business combination.

1 unchanged sentence

The company adopted this guidance in the fourth quarter of 2021 retrospectively to all business combinations completed in the first three quarters of 2021 and prospectively to all future business combinations.

The adoption of this guidance did not have a material impact on the company’s consolidated financial statements for acquisitions that closed in 2021;

The adoption of this guidance did not have a material impact on the company’s consolidated financial statements for acquisitions that closed in 2021 and 2022;

however, the impact in future periods will be dependent on the contract assets and contract liabilities acquired in future business combinations.

2 unchanged sentences

The adoption of this guidance did not have a material impact on the company’s consolidated financial statements.

In January 2020, the FASB issued new guidance to clarify the interaction of the accounting for certain equity securities, equity method investments, and certain forward contracts and purchased options.

Among other things, the new guidance clarifies that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying measurement principles for certain equity securities immediately before applying or discontinuing the equity method.

The company adopted this guidance in 2020 using a prospective method.

The adoption of this guidance did not have a material impact on the company’s consolidated financial statements.

In December 2019, the FASB issued new guidance to simplify the accounting for income taxes.

3 unchanged sentences

however, the impact in future periods will be dependent on the extent of future events or conditions that would be affected such as enacted changes in tax laws or rates.

In August 2018, the FASB issued new guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans.

The company adopted the guidance in 2020 using a retrospective method.

The adoption of this guidance did not have a material impact on the company’s disclosures.

In August 2018, the FASB issued new guidance to modify the disclosure requirements on fair value measurements.

The company adopted the guidance in 2020 with some items requiring a prospective method and others requiring a retrospective method.

The adoption of this guidance did not have a material impact on the company’s disclosures.

In June 2016, the FASB issued new guidance to require a financial asset measured at amortized cost basis, such as accounts receivable, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount.

2 unchanged sentences

The adoption of this guidance reduced accounts receivable and retained earnings by $ 1 million on January 1, 2020.

In February 2016, the FASB issued new guidance which requires lessees to record most leases on their balance sheets as lease liabilities, initially measured at the present value of the future lease payments, with corresponding right-of-use assets.

The new guidance also sets forth new disclosure requirements related to leases.

During 2017 - 2019, the FASB issued additional guidance and clarification.

The company adopted this guidance in January 2019.

The company elected to adopt the guidance using a modified retrospective method, by applying the transition approach as of the beginning of the period of adoption.

Comparative periods have not been restated.

As permitted upon transition, the company did not reassess whether any expired or

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, primarily due to expectations of the synergies that will be realized by combining

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existing contracts were or contained embedded leases, the lease classification for any expired or existing leases, initial direct costs for any leases, or whether land easements met the definition of a lease if they were not accounted for as leases under the prior guidance.

The adoption of this guidance increased retained earnings by $ 4 million on January 1, 2019.

Acquisitions and Disposition

the businesses and the benefits that will be gained from the assembled workforces.

These synergies include the elimination of redundant facilities, functions and staffing;

use of the company’s existing commercial infrastructure to expand sales of the acquired businesses’ products;

and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

use of the company’s existing commercial infrastructure to expand sales of the acquired businesses’ products and services;

and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products and services.

Acquisitions have been accounted for using the acquisition method of accounting, and the acquired companies’ results have been included in the accompanying financial statements from their respective dates of acquisition.

Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

On January 15, 2021, the company acquired, within the Laboratory Products and Biopharma Services segment, the Belgium-based European viral vector manufacturing business of Groupe Novasep SAS for $ 830 million in net cash consideration.

On January 3, 2023, the company acquired, within the Specialty Diagnostics segment, The Binding Site Group, a U.K.-based provider of specialty diagnostic assays and instruments to improve the diagnosis and management of blood cancers and immune system disorders.

The acquisition expands the segment’s portfolio with the addition of pioneering innovation in diagnostics and monitoring for multiple myeloma.

The goodwill recorded as a result of this business combination is not expected to be tax deductible.

The components of the purchase price and net assets acquired are as follows:

(In billions) The Binding Site

Purchase price

Cash acquired

Net assets acquired

Definite-lived intangible assets

Net tangible assets

Deferred tax assets (liabilities)

The weighted-average amortization period for definite-lived intangible assets is 17 years.

The preliminary allocation of the purchase price for the acquisition of The Binding Site is based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization, largely with respect to acquired intangible assets and the related deferred taxes.

Measurements of these items inherently require significant estimates and assumptions.

In 2022, the company acquired, within the Analytical Instruments segment, a U.S.-based developer of Fourier-transform infrared gas analysis technologies.

On January 15, 2021, the company acquired, within the Laboratory Products and Biopharma Services segment, the Belgium-based European viral vector manufacturing business of Groupe Novasep SAS.

The European viral vector manufacturing business provides manufacturing services for vaccines and therapies to biotechnology companies and large biopharma customers.

1 unchanged sentence

The goodwill recorded as a result of this business combination is not tax deductible.

On February 25, 2021, the company acquired, within the Life Sciences Solutions segment, Mesa Biotech, Inc., a U.S.-based molecular diagnostic company, for $ 407 million in net cash consideration and contingent consideration with an initial fair value of $ 65 million due upon the completion of certain milestones.

On February 25, 2021, the company acquired, within the Life Sciences Solutions segment, Mesa Biotech, Inc., a U.S.-based molecular diagnostic company.

Mesa Biotech has developed and commercialized a polymerase chain reaction (PCR) based rapid point-of-care testing platform available for detecting infectious diseases including COVID-19.

2 unchanged sentences

On September 30, 2021, the company assumed operating responsibility, within the Laboratory Products and Biopharma Services segment, of a new state-of-the-art biologics manufacturing facility in Lengnau, Switzerland from CSL Limited to perform pharma services for CSL with capacity to serve other customers as well.

The company expects to make fixed lease payments aggregating to $ 555 million (excluding renewals) from 2021 to 2041, with additional amounts dependent on the extent of revenues from customers of the facility other than CSL.

The goodwill recorded as a result of this business combination is not tax deductible.

On December 8, 2021, the company acquired, within the Laboratory Products and Biopharma Services segment, PPD, Inc., a U.S.-based global provider of clinical research services to the pharma and biotech industry, for $ 15.99 billion in net cash consideration and $ 43 million of equity awards exchanged.

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The addition of PPD’s clinical research services enhances our offering to biotech and pharma customers by enabling them to accelerate innovation and increase their productivity within the drug development process.

The goodwill recorded as a result of this business combination is not tax deductible.

On December 30, 2021, the company acquired, within the Life Sciences Solutions segment, PeproTech, Inc., a U.S.

based developer and manufacturer of recombinant proteins, for $ 1.86 billion in net cash consideration.

On December 30, 2021, the company acquired, within the Life Sciences Solutions segment, PeproTech, Inc., a U.S.-based developer and manufacturer of recombinant proteins.

PeproTech provides bioscience reagents known as recombinant proteins, including cytokines and growth factors.

4 unchanged sentences

and within the Specialty Diagnostics segment, a transplant diagnostics information system provider.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of the purchase price and net assets acquired for 2021 acquisitions are as follows:

32 unchanged sentences

$ 16,036 $ 1,863 $ 830 $ 472 $ 18 $ 403

The weighted-average amortization periods for definite-lived intangible assets acquired in 2021 are 17 years for customer relationships, 11 years for product technology, 7 years for tradenames and 3 years for backlog.

The weighted average amortization period for all definite-lived intangible assets acquired in 2021 is 14 years.

The preliminary allocations of the purchase price for the acquisitions of the Lengnau biologics manufacturing facility, PPD and PeproTech were based on estimates of the fair value of the net assets acquired and are subject to adjustment upon finalization, largely with respect to acquired intangible assets, lease assets and liabilities, and the related deferred taxes.

Measurements of these items inherently require significant estimates and assumptions.

During 2022, we finalized the allocations of the purchase price for the Lengnau biologics manufacturing facility, PPD, Inc.

and PeproTech, Inc., largely with respect to definite-lived intangible assets, property, plant and equipment, contract liabilities,

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

equity method investments, asset retirement obligations, defined benefit pension plans, assumed contingent consideration and the related deferred taxes.

The adjustments to the income statement recorded during 2022 were not material.

The weighted average amortization period for all definite-lived intangible assets acquired in 2021 is 14 years.

Unaudited Pro Forma Information

19 unchanged sentences

The loss includes non-recurring transaction and compensation costs.

In 2020, the company acquired, within the Life Sciences Solutions segment, a U.S.-based provider of a spectral dye platform for high-resolution biology applications which will extend the company’s existing tools for protein and cell analysis applications, for a total purchase price of $ 63 million including the fair value of contingent consideration.

On April 30, 2019, the company acquired, within the Laboratory Products and Biopharma Services segment, Brammer Bio for approximately $ 1.67 billion in cash.

Brammer Bio is a leading viral vector contract development and manufacturing organization for gene and cell therapies.

The acquisition expanded the segment’s contract manufacturing capabilities.

The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $ 938 million was allocated to goodwill, $ 405 million of which is tax deductible.

In addition, in 2019 the company acquired, within the Analytical Instruments segment, a Slovakia-based provider of mass spectrometry software used for identification of compounds, and, within the Laboratory Products and Biopharma Services segment, an active pharmaceutical ingredient manufacturing facility in Cork, Ireland, for an aggregate purchase price of $ 169 million.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of the purchase price and net assets acquired for 2019 acquisitions are as follows:

(In millions) Brammer Bio Other

Purchase price

$ 1,710 $ 169

Cash acquired

$ 1,674 $ 169

Net assets acquired

Current assets

Property, plant and equipment

Definite-lived intangible assets:

Customer relationships

Product technology

Contract liabilities ( 110 ) —

Deferred tax liabilities

( 110 ) ( 6 )

Other liabilities assumed

( 108 ) ( 1 )

$ 1,674 $ 169

The weighted-average amortization periods for definite-lived intangible assets acquired in 2019 are 14 years for customer relationships, 13 years for product technology and 2 years for tradenames.

The weighted average amortization period for all definite-lived intangible assets acquired in 2019 is 14 years.

On June 28, 2019, the company sold its Anatomical Pathology business to PHC Holdings Corporation for $ 1.13 billion, net of cash divested.

The business was part of the Specialty Diagnostics segment.

The sale of this business resulted in a pre-tax gain of approximately $ 478 million, included in restructuring and other (income) costs, net.

Revenues in 2019, through the date of sale, of the business sold were approximately $ 115 million, net of retained sales through the company's healthcare market and research and safety market channels.

Revenues and Contract-related Balances

7 unchanged sentences

$ 44,915 $ 39,211 $ 32,218

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Revenues by geographic region based on customer location are as follows:

15 unchanged sentences

Contract-related Balances

Noncurrent contract assets are included within other assets in the accompanying balance sheet.

Noncurrent contract liabilities are included within other long-term liabilities in the accompanying balance sheet.

Noncurrent contract assets and noncurrent contract liabilities are included within other assets and other long-term liabilities in the accompanying balance sheet, respectively.

Contract asset and liability balances are as follows:

10 unchanged sentences

Life Sciences Solutions:

provides an extensive portfolio of reagents, instruments and consumables used in biological and medical research, discovery and production of new drugs and vaccines as well as diagnosis of disease (including COVID-19 through its polymerase chain reaction (PCR) testing and sample preparation capabilities).

These products and services are used by customers in pharmaceutical, biotechnology, agricultural, clinical, academic, and government markets.

These products and services are used by customers in pharmaceutical, biotechnology, agricultural, clinical, healthcare, academic, and government markets.

Analytical Instruments:

provides a broad offering of instruments, consumables, software and services that are used for a range of applications in the laboratory, on the production line and in the field.

These products and services are used by customers in pharmaceutical, biotechnology, academic, government, environmental and other research and industrial markets, as well as the clinical laboratory.

Specialty Diagnostics:

provides a wide range of diagnostic test kits, reagents, culture media, instruments and associated products used to increase the speed and accuracy of diagnoses.

These products are used by customers in healthcare, clinical, pharmaceutical, industrial and food safety laboratories.

Laboratory Products and Biopharma Services (formerly known as Laboratory Products and Services):

provides virtually everything needed for the laboratory, including a combination of self-manufactured and sourced products for customers in research, academic, government, industrial and healthcare settings.

The segment also includes a comprehensive offering of

provides a broad offering of instruments and the supporting consumables, software and services that are used for a range of applications in the laboratory and in the field.

These products and services are used by customers in

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

outsourced services used by the pharmaceutical and biotech industries for drug development, clinical trials logistics, clinical research services and commercial drug manufacturing.

pharmaceutical, biotechnology, academic, government, environmental and other research and industrial markets, as well as the clinical laboratory.

Specialty Diagnostics:

offers a wide range of diagnostic test kits, reagents, culture media, instruments and associated products to serve customers in healthcare, clinical, pharmaceutical, industrial, and food safety laboratories.

Our healthcare products are used to increase the speed and accuracy of diagnoses, which improves patient care in a more cost-efficient manner.

Laboratory Products and Biopharma Services:

offers virtually everything needed for the laboratory.

Our unique combination of self-manufactured and sourced products and extensive service offering enables our customers to focus on their core activities and helps them to be more efficient, productive and cost-effective.

The segment also includes a comprehensive offering of outsourced services used by the pharmaceutical and biotech industries for drug development, clinical research, clinical trials services and commercial drug manufacturing.

The company’s management evaluates segment operating performance based on operating income before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition accounting;

26 unchanged sentences

10,985 12,138 9,556

Cost of revenues charges

Cost of revenues adjustments

( 46 ) ( 8 ) ( 6 )

Selling, general and administrative (charges) credits

Selling, general and administrative expenses adjustments

( 37 ) ( 144 ) 10

Restructuring and other (costs) income

Restructuring and other costs

( 114 ) ( 197 ) ( 99 )

7 unchanged sentences

( 104 ) ( 694 ) ( 76 )

Income before income taxes

Consolidated income before taxes

$ 7,835 $ 8,841 $ 7,230

6 unchanged sentences

$ 986 $ 831 $ 658

Cost of revenues charges included in the above table consist of charges for the sale of inventories revalued at the date of acquisition and accelerated depreciation on fixed assets to estimated disposal value in connection with the consolidation of operations.

Selling, general and administrative charges/credits included in the above table consist of third-party transaction/integration costs (including reimbursement thereof) related to recent/terminated acquisitions, charges/credits for changes in estimates of contingent acquisition consideration, and charges/credits related to product liability litigation.

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Cost of revenues charges included in the above table consist of charges for the sale of inventories revalued at the date of acquisition, inventory write-downs associated with large-scale abandonments of product lines, and accelerated depreciation on fixed assets to estimated salvage value in connection with the consolidation of operations.

Selling, general and administrative charges/credits included in the above table consist of significant transaction/integration costs (including reimbursement thereof) related to recent/terminated acquisitions, charges/credits for changes in estimates of contingent acquisition consideration, and charges/credits related to product liability litigation.

(In millions) 2022 2021 2020

40 unchanged sentences

In all periods, other income/(expense) includes currency transaction gains and losses on non-operating monetary assets and liabilities and net periodic pension benefit cost/income, excluding the service cost component which is included in operating expenses on the accompanying statement of income.

In 2022, other income/(expense) includes $ 161 million of net losses on investments, $ 67 million of net gains on derivative instruments to address certain foreign currency risks, $ 26 million of losses on the early extinguishment of debt (Note 10), and $ 2 million of net settlement gains on pension plans.

In 2021, other income/(expense) includes $ 767 million of losses on the early extinguishment of debt (Note 10), $ 36 million of financing costs associated with obtaining bridge financing commitments in connection with the agreement to acquire PPD (Note 2), offset in part by $ 66 million of net gains on investments.

The company had a cash outlay of $ 36 million in 2021 associated with obtaining the bridge financing commitments, included in other financing activities, net, in the accompanying statement of cash flows.

In 2020, other income/(expense) includes $ 81 million of financing costs for a terminated acquisition, primarily for loan commitment fees and entering into hedging contracts and $ 42 million reclassified from accumulated other comprehensive items related to a hedge arrangement (Note 14), offset in part by $ 10 million of net gains on investments.

The company had a cash outlay of $ 51 million in 2020 associated with obtaining the loan commitments included in other financing activities, net, in the accompanying statement of cash flows.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In 2019, other income/(expense) includes $ 184 million of losses on the early extinguishment of debt (Note 10), offset in part by $ 44 million of net gains on investments.

The investment gains include a $ 28 million gain on the sale of a joint venture for net proceeds of $ 42 million.

The company had a cash outlay of $ 51 million in 2020 associated with obtaining the loan commitments included in other financing activities, net, in the accompanying statement of cash flows.

Stock-based Compensation Expense

38 unchanged sentences

Outstanding at December 31, 2021

Issued in connection with an acquisition

( 0.9 ) 199.85

20 unchanged sentences

Unvested at December 31, 2021

Issued in connection with an acquisition

( 0.4 ) 375.77

35 unchanged sentences

Contributions to the plans included in the following table are estimated at between $ 30 and $ 50 million for 2023.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following table provides a reconciliation of benefit obligations and plan assets of the company’s domestic and non-U.S.

pension plans:

Domestic pension

benefits Non-U.S.

Domestic pension benefits Non-U.S.

pension benefits

(In millions) 2022 2021 2022 2021

Accumulated benefit obligation

$ 995 $ 1,260 $ 1,016 $ 1,475

Change in projected benefit obligations

Benefit obligation at beginning of year

Projected benefit obligation at beginning of year

$ 1,260 $ 1,302 $ 1,552 $ 1,486

9 unchanged sentences

— — ( 100 ) ( 54 )

Benefit obligation at end of year

Projected benefit obligation at end of year

$ 995 $ 1,260 $ 1,069 $ 1,552

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Domestic pension benefits Non-U.S.

pension benefits

(In millions) 2022 2021 2022 2021

Change in fair value of plan assets

3 unchanged sentences

Actual return on plan assets

Employer contribution

( 212 ) 37 ( 347 ) 14

Employer contributions

— — ( 31 ) ( 7 )

Plan participants' contributions

6 unchanged sentences

$ ( 58 ) $ ( 34 ) $ ( 201 ) $ ( 250 )

Accumulated benefit obligation

$ 1,260 $ 1,302 $ 1,475 $ 1,417

Amounts recognized in balance sheet

14 unchanged sentences

$ 200 $ 157 $ 70 $ 164

For domestic pension plans, actuarial gains experienced in 2022 were driven by increases in the weighted average discount rates used to determine the projected benefit obligation, as well as differences between actual and expected returns on plan assets for certain portions of plan benefits indexed to asset returns.

pension plans, actuarial gains experienced in 2022 were principally driven by increases in the weighted average discount rates used to determine the projected benefit obligation.

For domestic pension plans, actuarial losses experienced in 2021 were driven by differences between actual and expected returns on plan assets for certain portions of plan benefits indexed to asset returns, which were partially offset by actuarial gains due to increases in the weighted average discount rates used to determine the projected benefit obligation differences.

pension plans, actuarial gains experienced in 2021 were principally driven by increases in the weighted average discount rates used to determine the projected benefit obligation.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

For both domestic and non-U.S.

pension plans, actuarial losses experienced in 2020 were principally driven by decreases in the weighted average discount rates used to determine the projected benefit obligation.

For domestic pension plans, the 2020 actuarial losses were partially offset by gains recognized due to the adoption of an updated mortality assumption.

The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2022 and 2021 and are as follows:

Domestic pension

benefits Non-U.S.

Domestic pension benefits Non-U.S.

pension benefits

2022 2021 2022 2021

6 unchanged sentences

N/A N/A 2.78 % 2.73 %

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The actuarial assumptions used to compute the net periodic pension benefit cost (income) are based upon information available as of the beginning of the year, as presented in the following table:

26 unchanged sentences

Fair value of plan assets

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The accumulated benefit obligation and fair value of plan assets for the company's qualified and non-qualified pension plans with accumulated benefit obligations in excess of plan assets are as follows:

6 unchanged sentences

The measurement date used to determine benefit information is December 31 for all plan assets and benefit obligations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The net periodic pension benefit cost (income) includes the following components:

13 unchanged sentences

Settlement/curtailment loss

— — — ( 2 ) — 8

Net periodic benefit cost (income)

3 unchanged sentences

Estimated future benefit payments during the next five years and in the aggregate for the five fiscal years thereafter, are as follows:

(In millions) Domestic

benefits Non-U.S.

(In millions) Domestic pension benefits Non-U.S.

pension benefits

Expected benefit payments

12 unchanged sentences

Several of the plans have contracts with insurance companies whereby the market risks of the benefit obligations are borne by the insurance companies.

When assets are held directly in investments, generally the objective is to invest in a portfolio of

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

diversified assets with a variety of fund managers.

When assets are held directly in investments, generally the objective is to invest in a portfolio of diversified assets with a variety of fund managers.

The investments may include equity funds, fixed income funds, hedge funds, multi-asset funds, alternative investments and derivative funds with the target asset allocations ranging from approximately 0 % - 25 % for equity funds, 30 % - 90 % for fixed income funds, 0 % - 35 % for multi-asset funds, and 0 % - 45 % for funds holding derivatives.

1 unchanged sentence

Each plan maintains enough liquidity at all times to meet the near-term benefit payments.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The fair values of the company’s plan assets at December 31, 2022 and 2021, by asset category are as follows:

7 unchanged sentences

International equity funds

117 — — — 117

Fixed income funds

10 unchanged sentences

190 — — — 190

Alternative investments

Insurance contracts

5 unchanged sentences

(a) Investments measured at the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

December 31, Quoted

29 unchanged sentences

These investments were also redeemable at the balance sheet date or within limited time restrictions.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of income before provision for income taxes are as follows:

4 unchanged sentences

$ 7,835 $ 8,841 $ 7,230

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of the provision for income taxes are as follows:

32 unchanged sentences

( 18 ) ( 284 ) —

Foreign exchange loss on inter-company debt refinancing

— ( 47 ) ( 62 )

Domestication transaction — — ( 263 )

Valuation allowance

Valuation allowances

Withholding taxes

Basis difference on disposal of business

Tax return reassessments and settlements

8 unchanged sentences

federal statutory rate.

During 2022, the company settled an IRS audit relating to the 2017 and 2018 tax years.

The company recorded a $ 208 million net tax benefit primarily from this settlement and related impacts, which resulted in a decrease in the company’s unrecognized tax benefits of $ 658 million.

The company recorded $ 49 million of charges for expired tax credits and other related components of the settlement.

The company recorded a charge of $ 395 million to establish a valuation allowance against

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

foreign tax credits which the company believes will more likely than not expire unutilized.

The company also recorded $ 101 million of additional net unrecognized tax benefit liabilities related to other tax audits.

During 2021, the company recorded a $ 188 million income tax benefit related to the deferred tax implications of an intra-entity transfer of assets.

5 unchanged sentences

foreign tax credits which the company believes will more likely than not expire unutilized.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In 2020, the company recorded a $ 263 million income tax benefit related to a domestication transaction involving the transfer of certain non-U.S.

1 unchanged sentence

The company also recorded a valuation allowance of $ 212 million against the amount of interest expense that the company believes will more likely than not go unused.

Also in 2020, the company recorded a $ 47 million income tax benefit, including both U.S.

federal and state taxes, related to a foreign exchange loss for tax purposes on certain intercompany financing arrangements.

In 2019, the company recorded a $ 62 million income tax benefit, including both U.S.

federal and state taxes, related to a foreign exchange loss for tax purposes on certain intercompany financing arrangements as well as a tax provision of $ 191 million related to the gain on the sale of the Anatomical Pathology business.

Also in 2019, the company recorded a $ 79 million benefit related to the deferred tax implications of intra-entity transactions which included a tax benefit to release a valuation allowance against net operating losses previously determined to be unrealizable.

The foreign tax credits discussed below are the result of foreign earnings and profits remitted or deemed remitted to the U.S.

3 unchanged sentences

income tax expense.

In 2019, the company implemented foreign tax credit planning in Sweden which resulted in $ 75 million of foreign tax credits, with no related incremental U.S.

income tax expense.

The company generally receives a tax deduction upon the exercise of non-qualified stock options by employees, or the vesting of restricted stock units held by employees, for the difference between the exercise price and the market price of the underlying common stock on the date of exercise.

12 unchanged sentences

Deferred interest 445 295

Research and development and other capitalized costs

Unrealized (gains) losses on hedging instruments

( 199 ) ( 33 )

Deferred tax liabilities, net before valuation allowance

13 unchanged sentences

Additions (reductions) charged to income tax provision, net

24 514 ( 27 )

Additions due to acquisitions

Reduction due to a divestiture

Currency translation and other

4 unchanged sentences

Use of the carryforwards is limited based on the future income of certain subsidiaries.

The federal and state net operating loss carryforwards expire in the years 2022 through 2041.

Of the federal net operating loss carryforwards, $ 33 million expire in the years 2023 through 2037, and the remainder do not expire.

The state net operating loss carryforwards expire in the years 2023 through 2042.

Of the net non-U.S.

2 unchanged sentences

The foreign tax credit carryforwards will expire in the years 2025 through 2032 while deferred interest carryforwards do not expire.

federal taxes have been recorded on $ 24 billion of undistributed foreign earnings as of December 31, 2021.

federal taxes have been recorded on approximately $ 29 billion of undistributed foreign earnings as of December 31, 2022.

A provision has not been made for certain U.S.

19 unchanged sentences

( 4 ) ( 27 ) —

( 32 ) ( 53 ) ( 173 )

Ending balance

3 unchanged sentences

During 2022, the company’s unrecognized tax benefits increased by $ 143 million as a result of uncertain tax positions relating to foreign tax positions and decreased $ 610 million relating to U.S.

federal and state tax positions which included $ 658 million from the settlement of the IRS audit of the 2017 and 2018 tax years.

The company also assumed $ 15 million of uncertain tax benefits as part of the acquisition of PPD.

During 2021, the company’s unrecognized tax benefits increased by $ 80 million as a result of uncertain tax positions relating to foreign tax positions and decreased $ 75 million relating to U.S.

federal and state tax positions.

2 unchanged sentences

federal and state tax positions which included $ 378 million from the settlement of the IRS audit of the 2014, 2015 and 2016 tax years.

During 2019, the company’s unrecognized tax benefits increased $ 70 million as a result of uncertain tax positions relating to foreign tax positions and $ 45 million relating to U.S.

federal and state tax positions.

THERMO FISHER SCIENTIFIC INC.

26 unchanged sentences

Commercial Paper 2.60 % $ 310 $ 2,522

2.15 % 7 -Year Senior Notes, Due 7/21/2022 (euro-denominated)

3.00 % 7 -Year Senior Notes, Due 4/15/2023

Floating Rate (SOFR + 0.35 %) 1.5 -Year Senior Notes, Due 4/18/2023

5 unchanged sentences

0.000 % 2 -Year Senior Notes Due 11/18/2023 (euro-denominated)

4.15 % 10 -Year Senior Notes, Due 2/1/2024

0.06 % 589 625

0.75 % 8 -Year Senior Notes, Due 9/12/2024 (euro-denominated)

0.93 % 1,071 1,137

Floating Rate (SOFR + 0.53 %) 3 -Year Senior Notes, Due 10/18/2024

1.215 % 3 -Year Senior Notes, Due 10/18/2024

1.42 % 2,500 2,500

Floating Rate (SOFR + 0.53 %) 3 -Year Senior Notes, Due 10/18/2024

0.125 % 5.5 -Year Senior Notes, Due 3/1/2025 (euro-denominated)

0.40 % 857 910

4.133 % 5 -Year Senior Notes, Due 3/25/2025

2.00 % 10 -Year Senior Notes, Due 4/15/2025 (euro-denominated)

2.09 % 686 728

0.853 % 3 -Year Senior Notes, Due 10/20/2025 (yen-denominated)

0.000 % 4 -Year Senior Notes Due 11/18/2025 (euro-denominated)

3.65 % 10 -Year Senior Notes, Due 12/15/2025

0.15 % 589 625

3.65 % 10 -Year Senior Notes, Due 12/15/2025

3.20 % 3 -Year Senior Notes, Due 1/21/2026 (euro-denominated)

1.40 % 8.5 -Year Senior Notes, Due 1/23/2026 (euro-denominated)

1.52 % 749 796

2.95 % 10 -Year Senior Notes, Due 9/19/2026

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Effective interest rate at December 31, December 31, December 31,

(Dollars in millions) 2021 2021 2020

1.45 % 10 -Year Senior Notes, Due 3/16/2027 (euro-denominated)

2 unchanged sentences

1.96 % 642 682

1.054 % 5 -Year Senior Notes, Due 10/20/2027 (yen-denominated)

4.80 % 5 -Year Senior Notes, Due 11/21/2027

1 unchanged sentence

0.77 % 857 910

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Effective interest rate at December 31, December 31, December 31,

(Dollars in millions) 2022 2022 2021

1.375 % 12 -Year Senior Notes, Due 9/12/2028 (euro-denominated)

1 unchanged sentence

1.750 % 7 -Year Senior Notes, Due 10/15/2028

1.89 % 700 700

1.95 % 12 -Year Senior Notes, Due 7/24/2029 (euro-denominated)

2 unchanged sentences

2.74 % 900 900

4.497 % 10 -Year Senior Notes, Due 3/25/2030

1.279 % 7 -Year Senior Notes, Due 10/19/2029 (yen-denominated)

0.80 % 9 -Year Senior Notes, Due 10/18/2030 (euro-denominated)

6 unchanged sentences

2.54 % 642 682

1.49 % 10 -Year Senior Notes, Due 10/20/2032 (yen-denominated)

4.95 % 10 -Year Senior Notes, Due 11/21/2032

1.125 % 12 -Year Senior Notes, Due 10/18/2033 (euro-denominated)

1 unchanged sentence

3.65 % 12 -Year Senior Notes, Due 11/21/2034 (euro-denominated)

2.875 % 20 -Year Senior Notes, Due 7/24/2037 (euro-denominated)

2.94 % 749 796

5 unchanged sentences

1.77 % 1,339 1,421

2.069 % 20 -Year Senior Notes, Due 10/20/2042 (yen-denominated)

5.30 % 30 -Year Senior Notes, Due 2/1/2044

5 unchanged sentences

2.00 % 30 -Year Senior Notes, Due 10/18/2051 (euro-denominated)

2.06 % 803 853

2.382 % 30 -Year Senior Notes, Due 10/18/2052 (yen-denominated)

Total borrowings at par value

34,561 34,971

Fair value hedge accounting adjustments

Unamortized discount

9 unchanged sentences

EURIBOR - Euro Interbank Offered Rate

The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discount and the amortization of any debt issuance costs.

The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discounts/premiums and the amortization of any debt issuance costs.

See Note 14 for fair value information pertaining to the company’s long-term borrowings.

7 unchanged sentences

2026 1,285 11

2027 1,999 10

2028 and thereafter 19,325 150

3 unchanged sentences

Credit Facilities

On January 7, 2022, the company entered into a new revolving credit facility (the Facility) with a bank group that provides for up to $ 5.00 billion of unsecured multi-currency revolving credit The Facility replaces the company’s $ 3.00 billion credit facility which was in place at December 31, 2021 (the prior credit facility).

The company has a revolving credit facility (the Facility) with a bank group that provides for up to $ 5.00 billion of unsecured multi-currency revolving credit.

The Facility expires on January 7, 2027.

2 unchanged sentences

The covenants in the Facility include a Consolidated Net Interest Coverage Ratio (Consolidated EBITDA to Consolidated Net Interest Expense), as such terms are defined in the Facility.

Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.5 :1.0 as of the last day of any fiscal quarter.

As of December 31, 2021, no borrowings were outstanding under the prior credit facility, although available capacity was reduced by approximately $ 4 million as a result of outstanding letters of credit.

Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Net Interest Coverage Ratio of 3.5 :1.0 as of the last day of any fiscal quarter.

As of December 31, 2022, no borrowings were outstanding under the Facility, although available capacity was reduced by immaterial outstanding letters of credit.

Commercial Paper Programs

5 unchanged sentences

Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis.

As of December 31, 2021, there were $ 2.52 billion outstanding borrowings under these programs.

As of December 31, 2022, there were $ 0.31 billion of outstanding borrowings under these programs.

Interest is payable quarterly on the floating rate senior notes, annually on the euro-denominated fixed rate senior notes and semi-annually on all other senior notes.

3 unchanged sentences

The company was in compliance with all covenants at December 31, 2022.

The company intends to allocate an amount equal to the net proceeds from the 0.000% senior notes due 2025 to finance or refinance, in whole or in part, certain green or social eligible projects.

Pending allocation to green or social eligible projects, such net proceeds may be temporarily invested in cash, cash equivalents, short-term investments, or used to repay other borrowings.

In 2022 the company completed the full allocation of an amount equal to the net proceeds from the 0.000 % senior notes due 2025 to finance or refinance, in whole or in part, certain COVID-19 response projects.

In 2022, the company redeemed all of its 3.650 % Senior Notes due 2025.

In connection with the redemption, the company incurred $ 26 million of losses on the early extinguishment of debt included in other income/(expense) on the accompanying statement of income.

In 2021, the company redeemed some of its existing senior notes.

In connection with these redemptions, the company incurred $ 767 million of losses on the early extinguishment of debt included in other income/(expense) on the accompanying

In connection with these redemptions, the company incurred $ 767 million of losses on the early extinguishment of debt included in other income/(expense) on the accompanying statement of income.

Upon redemption of the senior notes, the company terminated the related fixed to floating rate interest rate

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

statement of income.

Upon redemption of the senior notes, the company terminated the related fixed to floating rate interest rate swap arrangements and received $ 22 million, included in other financing activities, net, in the accompanying statement of cash flows.

In 2019, the company refinanced certain of its debt by issuing new senior notes and using the proceeds to redeem some of its existing senior notes.

In connection with these redemptions, the company incurred $ 184 million of losses on the early extinguishment of debt included in other income/(expense) on the accompanying statement of income.

Upon redemption of the senior notes, the company terminated the related fixed to floating rate interest rate swap arrangements and paid $ 17 million, included in other financing activities, net, in the accompanying statement of cash flows.

The company also terminated related cross-currency interest rate swap arrangements and received $ 44 million, included in other investing activities, net, in the accompanying statement of cash flows.

In February 2022, the company redeemed all of its 3.650% Senior Notes due 2025.

In connection with the redemption the company incurred approximately $ 26 million of losses on the early extinguishment of debt in the first quarter of 2022.

swap arrangements and received $ 22 million, included in other financing activities, net, in the accompanying statement of cash flows.

Thermo Fisher Scientific (Finance I) B.V.

9 unchanged sentences

Operating lease ROU assets and lease liabilities for these lease arrangements are recorded on the consolidated balance sheet as of December 31, 2022, but exclude any amounts for residual value guarantees.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As a lessee, the consolidated financial statements include the following relating to operating leases:

(In millions) 2021 2020 2019

Balance sheet

ROU assets $ 1,531 $ 775

Operating lease liabilities - current 266 184

Operating lease liabilities - noncurrent 1,203 626

(Dollars in millions) 2022 2021 2020

Statement of income

5 unchanged sentences

Operating lease ROU assets obtained in exchange for new operating lease liabilities 430 293 202

Balance sheet

ROU assets $ 1,593 $ 1,531

Operating lease liabilities - current 272 266

Operating lease liabilities - noncurrent 1,313 1,203

Weighted average at end of year

Remaining operating lease term 9.9 years 6.3 years 6.2 years

Remaining operating lease term 9.4 years 9.9 years

Discount rate 3.2 % 2.6 %

3 unchanged sentences

See Note 10 for additional information relating to finance leases.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

As of December 31, 2022, future payments of operating lease liabilities are as follows:

13 unchanged sentences

The aggregate amount of the company’s unconditional purchase obligations totaled $ 2.40 billion at December 31, 2022 and the majority of these obligations are expected to be settled during 2023.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The Analytical Instruments segment recorded a charge to cost of product revenues for $ 108 million in 2020 related to an existing supply contract for components of electron microscopy instruments.

18 unchanged sentences

Where probable, an obligation for such indemnifications is recorded as a liability.

Generally, a maximum obligation cannot be reasonably estimated.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

maximum obligation cannot be reasonably estimated.

Other than obligations recorded as liabilities at the time of divestiture, historically the company has not made significant payments for these indemnifications.

11 unchanged sentences

The company calculates estimates based upon several factors, including input from environmental specialists and management’s knowledge of and experience with these environmental matters.

The company includes in these estimates potential costs for investigation, remediation and operation and

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

maintenance of cleanup sites.

The company includes in these estimates potential costs for investigation, remediation and operation and maintenance of cleanup sites.

At December 31, 2022 , the company’s total environmental liability was approximately $ 75 million.

While management believes the accruals for environmental remediation are adequate based on current estimates of remediation costs, the company may be subject to additional remedial or compliance costs due to future events such as changes in existing laws and regulations, changes in agency direction or enforcement policies, developments in remediation technologies or changes in the conduct of the company’s operations, which could have a material adverse effect on the company’s financial position, results of operations or cash flows.

Litigation and Related Contingencies

13 unchanged sentences

The company is involved in various proceedings and litigation that arise from time to time in connection with product liability, workers compensation and other personal injury matters.

The range of probable loss for product liability, workers compensation and other personal injury matters of the company’s continuing operations at December 31, 2021, was approximately $ 216 million to $ 375 million on an undiscounted basis.

The range of probable loss for product liability, workers compensation and other personal injury matters of the company’s continuing operations at December 31, 2022, was

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

approximately $ 223 million to $ 384 million on an undiscounted basis.

The portion of these liabilities assumed in the 2006 merger with Fisher was recorded at its fair (present) value at the date of merger.

7 unchanged sentences

Management monitors the payment history as well as the financial condition and ratings of its insurers on an ongoing basis.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Comprehensive Income and Shareholders' Equity

Comprehensive Income (Loss)

Comprehensive income combines net income and other comprehensive items.

Other comprehensive items represent certain amounts that are reported as components of shareholders’ equity in the accompanying balance sheet.

Changes in each component of accumulated other comprehensive items, net of tax are as follows:

6 unchanged sentences

Other comprehensive items before reclassifications

( 822 ) — 38 ( 784 )

Amounts reclassified from accumulated other comprehensive items

16 unchanged sentences

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of December 31, 2021 and December 31, 2020:

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis:

December 31, Quoted

31 unchanged sentences

Changes to the fair value of contingent consideration are recorded in selling, general and administrative expense.

The following table provides a rollforward of the fair value, as determined by level 3 inputs (such as likelihood of achieving production or revenue milestones, as well as changes in the fair values of the investments underlying a

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

recapitalization investment portfolio), of the contingent consideration.

(In millions) 2022 2021

4 unchanged sentences

Changes in fair value included in earnings

( 59 ) ( 47 )

Ending balance

4 unchanged sentences

Notional amount

Interest rate swaps - fair value hedges $ — $ 1,000

Cross-currency interest rate swaps - designated as net investment hedges

$ 2,100 $ 900

Currency exchange contracts

5 unchanged sentences

Derivatives designated as hedging instruments

Interest rate swaps (a)

$ — $ 25 $ — $ —

Cross-currency interest rate swaps (a)

$ 77 $ 25 $ 85 $ —

Derivatives not designated as hedging instruments

2 unchanged sentences

$ 79 $ 36 $ 101 $ 1

(a) The fair values of the interest rate swaps and cross-currency interest rate swaps are included in the accompanying balance sheet under the caption other assets or other long-term liabilities.

(a) The fair value of the cross-currency interest rate swaps is included in the accompanying balance sheet under the caption other assets or other long-term liabilities.

(b) The fair value of the currency exchange contracts is included in the accompanying balance sheet under the captions other current assets or other accrued expenses.

The following amounts related to cumulative basis adjustments for fair value hedges were included in the accompanying balance sheet under the caption long-term obligations:

Carrying amount of the hedged liability Cumulative amount of fair value hedging adjustment - increase (decrease) included in carrying amount of liability

December 31, December 31, December 31, December 31,

(In millions) 2021 2020 2021 2020

Long-term obligations $ — $ 1,020 $ — $ 25

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Gain (loss) recognized

1 unchanged sentence

Fair value hedging relationships

Cross-currency interest rate swaps

Hedged long-term obligations - included in other income/(expense)

Derivatives designated as hedging instruments - included in other income/(expense)

Interest rate swaps

Hedged long-term obligations - included in other income/(expense)

$ 25 $ ( 38 )

Derivatives designated as hedging instruments - included in other income/(expense)

1 unchanged sentence

Interest rate swaps

Included in unrealized losses on hedging instruments within other comprehensive items

Amount reclassified from accumulated other comprehensive items to other income/(expense)

( 73 ) ( 59 )

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Gain (loss) recognized

(In millions) 2022 2021

Financial instruments designated as net investment hedges

Foreign currency-denominated debt

Foreign currency-denominated debt and other payables

Included in currency translation adjustment within other comprehensive items

6 unchanged sentences

Included in other income/(expense)

Cross-currency interest rate swaps

Included in other income/(expense)

Gains and losses recognized on currency exchange contracts and the interest rate swaps designated as fair value hedges are included in the accompanying statement of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.

The company uses foreign currency-denominated debt and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates.

See Note 1 and Note 10 for additional information on the company’s risk management objectives and strategies.

Cash Flow Hedge Arrangements

In 2020 and 2019, the company entered into interest rate swap arrangements to mitigate the risk of interest rates rising prior to completion of debt offerings.

In 2020 the company entered into interest rate swap arrangements to mitigate the risk of interest rates rising prior to completion of debt offerings.

Based on the company's conclusion that the debt offerings were probable, the swaps hedged the cash flow risk for each of the interest payments on the planned fixed-rate debt issues.

The aggregate fair value of the terminated hedges, net of tax, has been classified as a reduction to accumulated other comprehensive items and will be amortized to interest expense over the term of the related debt issuances.

The company had cash outlays aggregating $ 85 million and $ 50 million in 2020 and 2019, respectively, associated with termination of the arrangements, included in other financing activities, net, in the accompanying statement of cash flows.

The company had cash outlays aggregating $ 85 million in 2020 associated with termination of the arrangements, included in other financing activities, net, in the accompanying statement of cash flows.

In late 2020, the company determined that the previously anticipated debt offerings were probable of not occurring and reclassified $ 42 million from accumulated other comprehensive items to other income/(expense).

During 2021, in connection with the extinguishment of debt (Note 10), the company reclassified $ 65 million from accumulated other comprehensive items to other income/(expense).

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Fair Value of Other Financial Instruments

8 unchanged sentences

The fair value of debt instruments was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends, which represent level 2 measurements.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Supplemental Cash Flow Information

17 unchanged sentences

Cash, cash equivalents and restricted cash $ 8,537 $ 4,491

Amounts included in restricted cash represent funds held as collateral for bank guarantees and incoming cash in China awaiting government administrative clearance.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restructuring and Other Costs (Income)

Amounts included in restricted cash primarily represent funds held as collateral for bank guarantees and incoming cash in China awaiting government administrative clearance.

Restructuring and Other Costs

Restructuring and other costs in 2022 primarily included impairment of long-lived assets and continuing charges for headcount reductions and facility consolidations in an effort to streamline operations.

In 2022, severance actions associated with facility consolidations and cost reduction measures affected less than 2 % of the company’s workforce.

Restructuring and other costs in 2021 primarily included charges for impairments of an acquired technology asset and a tradename asset, and, to a lesser extent, compensation due to employees at acquired businesses on the date of acquisition.

In 2021, severance actions associated with facility consolidations and cost reduction measures affected less than 1 % of the company’s workforce.

Restructuring and other costs in 2020 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S.

and Europe, and charges for the write-off of acquired technology.

In 2020, severance actions associated with facility consolidations and cost reduction measures affected approximately 1 % of the company’s workforce.

Restructuring and other costs (income) in 2019 primarily included the gain on the sale of the company’s Anatomical Pathology business, and, to a lesser extent, continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S.

Restructuring and other costs in 2020 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, and charges for the write-off of acquired technology.

In 2020, severance actions associated with facility consolidations and cost reduction measures affected approximately 1 % of the company’s workforce.

As of February 23, 2023, the company has identified restructuring actions that will result in additional charges of approximately $ 60 million, primarily in 2023, and expects to identify additional actions in future periods which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

Restructuring and other costs (income) by segment are as follows:

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Restructuring and other costs by segment are as follows:

(In millions) 2022 2021 2020

10 unchanged sentences

Balance at December 31, 2019 $ 34

Cumulative effect of accounting change (b) ( 28 )

Net restructuring charges incurred in 2019 (c)

Net restructuring charges incurred in 2020 (b)

Currency translation

Balance at December 31, 2020 21

Net restructuring charges incurred in 2020 (d)

Net restructuring charges incurred in 2021 (c)

Currency translation

Balance at December 31, 2021 17

Net restructuring charges incurred in 2021 (e)

Currency translation

Net restructuring charges incurred in 2022 (d)

Balance at December 31, 2022 $ 41

(a) The movements in the restructuring liability principally consist of severance and other costs such as relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

(b) Impact of adopting new lease accounting guidance on January 1, 2019.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(c) Excludes $ 465 million of net charges, principally $ 482 million of net gain on the sale of businesses recorded in the Specialty Diagnostics segment, partially offset by $ 17 million of other restructuring charges, net, across the company’s segments primarily for the write-off of acquired technology, pre-acquisition litigation-related matters, and compensation due to employees at businesses at the date of acquisition.

(d) Excludes $ 48 million of charges, principally $ 32 million for impairment of acquired technology in the Life Sciences Solutions segment resulting from a reduction in expected cash flows and, to a lesser extent, charges across the company’s segments for fixed asset writedowns and costs associated with environmental remediation at abandoned/previously owned facilities.

(e) Excludes $ 160 million of charges, principally $ 122 million for impairments of an acquired technology asset and a tradename asset in the Life Sciences Solutions and Laboratory Products and Biopharma Services segment, principally resulting from a reduction in expected cash flows, and $ 35 million of charges for compensation contractually due to employees of acquired businesses at the date of acquisition in the Life Sciences Solutions and Laboratory Products and Biopharma Services segments.

(b) Excludes $ 48 million of charges, principally $ 32 million for impairment of acquired technology in the Life Sciences Solutions segment resulting from a reduction in expected cash flows and, to a lesser extent, charges across the company’s segments for fixed asset writedowns and costs associated with environmental remediation at abandoned/previously owned facilities.

(c) Excludes $ 160 million of charges, principally $ 122 million for impairments of an acquired technology asset and a tradename asset in the Life Sciences Solutions and Laboratory Products and Biopharma Services segment, principally resulting from a reduction in expected cash flows, and $ 35 million of charges for compensation contractually due to employees of acquired businesses at the date of acquisition in the Life Sciences Solutions and Laboratory Products and Biopharma Services segments.

(d) Excludes $ 46 million of net charges, primarily charges for impairment of long-lived assets in the Specialty Diagnostic segment.

The company expects to pay accrued restructuring costs primarily through 2023.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures