What changed in this filing

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Item 1. Financial Statements

2023-08-04 compared with 2023-05-05 · 151 added, 77 removed, 612 unchanged (27% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

April 1, December 31,

July 1, December 31,

(In millions except share and per share amounts) 2023 2022

41 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions except per share amounts) 2023 2022 2023 2022

2 unchanged sentences

Service revenues

4,416 3,967 8,722 7,768

Total revenues

2 unchanged sentences

Cost of product revenues

3,278 3,516 6,615 7,071

Cost of service revenues

3,158 2,855 6,391 5,654

Selling, general and administrative expenses

2,145 2,209 4,264 4,486

Research and development expenses

345 365 691 729

Restructuring and other costs

183 24 295 26

Total costs and operating expenses

9,109 8,969 18,256 17,966

Operating income 1,578 2,001 3,141 4,822

4 unchanged sentences

Income before income taxes

1,430 1,917 2,793 4,457

Provision for income taxes

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions) 2023 2022 2023 2022

4 unchanged sentences

Currency translation adjustment (net of tax provision (benefit) of $ 0 , $ 173 , $( 36 ) and $ 262 )

125 ( 386 ) 169 ( 416 )

Unrealized gains and losses on hedging instruments:

3 unchanged sentences

Amortization of net loss included in net periodic pension cost (net of tax benefit of $ 0 , $ 1 , $ 0 and $ 2 )

( 2 ) 2 ( 2 ) 4

Total other comprehensive income/(loss) 123 ( 378 ) 171 ( 402 )

Comprehensive income

1,485 1,290 2,825 3,486

comprehensive income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

April 1, April 2,

Six months ended

July 1, July 2,

(In millions) 2023 2022

22 unchanged sentences

Repayment of debt

( 1,000 ) ( 375 )

Proceeds from issuance of commercial paper

16 unchanged sentences

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

Redeemable Noncontrolling Interest Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock Accumulated Other Comprehensive Items Total

2 unchanged sentences

(In millions) Shares Amount Shares Amount

Three months ended April 1, 2023

Three months ended July 1, 2023

Balance at April 1, 2023 $ 123 441 $ 441 $ 16,889 $ 43,064 55 $ ( 15,083 ) $ ( 3,054 ) $ 42,257 $ 53 $ 42,310

Issuance of shares under employees' and directors' stock plans

— — — 67 — — ( 2 ) — 65 — 65

Stock-based compensation

— — — 74 — — — — 74 — 74

Dividends declared ($ 0.35 per share)

— — — — ( 136 ) — — — ( 136 ) — ( 136 )

Net income/(loss)

4 — — — 1,361 — — — 1,361 ( 3 ) 1,358

Other comprehensive items

( 7 ) — — — — — — 130 130 — 130

Contributions from (distributions to) noncontrolling interests ( 7 ) — — — — — — — — — —

Excise tax from stock repurchases — — — — — — 1 — 1 — 1

Balance at July 1, 2023 $ 113 441 $ 441 $ 17,030 $ 44,289 55 $ ( 15,084 ) $ ( 2,924 ) $ 43,752 $ 50 $ 43,802

Three months ended July 2, 2022

Balance at April 2, 2022 $ 113 440 $ 440 $ 16,292 $ 37,528 48 $ ( 10,961 ) $ ( 2,343 ) $ 40,956 $ 62 $ 41,018

Issuance of shares under employees' and directors' stock plans

— — — 98 — — ( 3 ) — 95 — 95

Stock-based compensation

— — — 77 — — — — 77 — 77

Dividends declared ($ 0.30 per share)

— — — — ( 118 ) — — — ( 118 ) — ( 118 )

Net income/(loss)

4 — — — 1,664 — — — 1,664 — 1,664

Other comprehensive items

4 — — — — — — ( 381 ) ( 381 ) ( 1 ) ( 382 )

Contributions from (distributions to) noncontrolling interests ( 4 ) — — — — — — — — — —

Balance at July 2, 2022 $ 117 440 $ 440 $ 16,467 $ 39,074 48 $ ( 10,964 ) $ ( 2,724 ) $ 42,293 $ 61 $ 42,354

The accompanying notes are an integral part of these condensed consolidated financial statements.

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY (Continued)

Redeemable Noncontrolling Interest Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock Accumulated Other Comprehensive Items Total

Thermo Fisher Scientific Inc.

Shareholders’ Equity Noncontrolling Interests Total Equity

(In millions) Shares Amount Shares Amount

Six months ended July 1, 2023

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

11 unchanged sentences

( 4 ) — — — — — — 175 175 — 175

Contributions from (distributions to) noncontrolling interests ( 7 ) — — — — — — — — — —

Excise tax from stock repurchases — — — — — — ( 29 ) — ( 29 ) — ( 29 )

Balance at April 1, 2023 $ 123 441 $ 441 $ 16,889 $ 43,064 55 $ ( 15,083 ) $ ( 3,054 ) $ 42,257 $ 53 $ 42,310

Three months ended April 2, 2022

Balance at July 1, 2023 $ 113 441 $ 441 $ 17,030 $ 44,289 55 $ ( 15,084 ) $ ( 2,924 ) $ 43,752 $ 50 $ 43,802

Six months ended July 2, 2022

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

12 unchanged sentences

Contributions from (distributions to) noncontrolling interests ( 7 ) — — — — — — — — ( 1 ) ( 1 )

Balance at April 2, 2022 $ 113 440 $ 440 $ 16,292 $ 37,528 48 $ ( 10,961 ) $ ( 2,343 ) $ 40,956 $ 62 $ 41,018

Balance at July 2, 2022 $ 117 440 $ 440 $ 16,467 $ 39,074 48 $ ( 10,964 ) $ ( 2,724 ) $ 42,293 $ 61 $ 42,354

The accompanying notes are an integral part of these condensed consolidated financial statements.

7 unchanged sentences

Interim Financial Statements

The interim condensed consolidated financial statements presented herein have been prepared by the company, are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at April 1, 2023, the results of operations for the three-month periods ended April 1, 2023 and April 2, 2022, and the cash flows for the three-month periods ended April 1, 2023 and April 2, 2022.

The interim condensed consolidated financial statements presented herein have been prepared by the company, are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at July 1, 2023, the results of operations for the three- and six-month periods ended July 1, 2023 and July 2, 2022, and the cash flows for the six-month periods ended July 1, 2023 and July 2, 2022.

Interim results are not necessarily indicative of results for a full year.

4 unchanged sentences

Note 1 to the consolidated financial statements for 2022 describes the significant accounting estimates and policies used in preparation of the consolidated financial statements.

There have been no material changes in the company’s significant accounting policies during the three months ended April 1, 2023.

There have been no material changes in the company’s significant accounting policies during the six months ended July 1, 2023.

The components of inventories are as follows:

(In millions) April 1, 2023 December 31, 2022

(In millions) July 1, 2023 December 31, 2022

Raw materials $ 2,368 $ 2,405

5 unchanged sentences

The company’s estimates include, among others, asset reserve requirements as well as the amounts of future cash flows associated with certain assets and businesses that are used in assessing the risk of impairment.

The negative impacts associated with the ongoing COVID-19 global pandemic significantly lessened in 2022 and 2023.

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.

6 unchanged sentences

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

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

conditions of transactions with a government arising from a grant or other forms of assistance accounted for under a contribution model.

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 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.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

5 unchanged sentences

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

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

8 unchanged sentences

Deferred tax assets (liabilities)

In addition, in 2023, the company acquired, within the Analytical Instruments segment, a U.S.-based developer of Raman-based spectroscopy solutions for in-line measurement.

The weighted-average amortization period for definite-lived intangible assets acquired in 2023 are 18 years for customer relationships, 14 years for product technology and 15 years for tradenames.

The weighted average amortization period for all definite-lived intangible assets acquired in 2023 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.

Pending Acquisition

The company has entered into an agreement to acquire CorEvitas, LLC for approximately $ 0.91 billion in cash.

CorEvitas provides regulatory-grade, real-world evidence for approved medical treatments and therapies.

The transaction, which is expected to be completed by the end of 2023, is subject to customary closing conditions, including regulatory approvals.

Upon completion, CorEvitas will become part of the Laboratory Products and Biopharma Services segment.

THERMO FISHER SCIENTIFIC INC.

3 unchanged sentences

Revenues by type are as follows:

Three months ended

(In millions) April 1, 2023 April 2, 2022

Three months ended Six months ended

(In millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

$ 4,433 $ 4,993 $ 8,939 $ 11,103

1,838 2,010 3,736 3,917

4,416 3,967 8,722 7,768

Consolidated revenues $ 10,687 $ 10,970 $ 21,397 $ 22,788

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

Three months ended

(In millions) April 1, 2023 April 2, 2022

Three months ended Six months ended

(In millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

North America

$ 5,714 $ 6,032 $ 11,492 $ 12,355

2,654 2,551 5,255 5,601

1,902 2,042 3,888 4,106

Other regions

417 345 762 726

Consolidated revenues $ 10,687 $ 10,970 $ 21,397 $ 22,788

2 unchanged sentences

Remaining Performance Obligations

The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of April 1, 2023 was $ 25.81 billion.

The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of July 1, 2023 was $ 25.39 billion.

The company will recognize revenues for these performance obligations as they are satisfied, approximately 56 % of which is expected to occur within the next twelve months .

3 unchanged sentences

Contract asset and liability balances are as follows:

(In millions) April 1, 2023 December 31, 2022

(In millions) July 1, 2023 December 31, 2022

Current contract assets, net $ 1,467 $ 1,312

2 unchanged sentences

Noncurrent contract liabilities 1,098 1,179

In the three months ended April 1, 2023, the company recognized revenues of $ 1.30 billion that were included in the contract liabilities balance at December 31, 2022.

In the three months ended April 2, 2022, the company recognized revenues of $ 1.28 billion that were included in the contract liabilities balance at December 31, 2021.

In the three and six months ended July 1, 2023, the company recognized revenues of $ 0.68 billion and $ 1.98 billion, respectively, that were included in the contract liabilities balance at December 31, 2022.

In the three and six months ended July 2, 2022, the company recognized revenues of $ 0.71 billion and $ 1.99 billion, respectively, that were included in the contract liabilities balance at December 31, 2021.

THERMO FISHER SCIENTIFIC INC.

2 unchanged sentences

Business Segment Information

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions) 2023 2022 2023 2022

2 unchanged sentences

Analytical Instruments

1,749 1,607 3,472 3,125

Specialty Diagnostics

1,109 1,101 2,217 2,583

Laboratory Products and Biopharma Services

5,831 5,537 11,594 10,979

( 465 ) ( 567 ) ( 961 ) ( 1,422 )

Consolidated revenues

2 unchanged sentences

Life Sciences Solutions

817 1,327 1,653 3,503

Analytical Instruments

432 344 853 645

Specialty Diagnostics

297 243 577 596

Laboratory Products and Biopharma Services

824 691 1,617 1,311

Subtotal reportable segments

2,370 2,605 4,700 6,055

Cost of revenues adjustments

1 unchanged sentence

Selling, general and administrative expenses adjustments

( 6 ) 28 ( 14 ) 21

Restructuring and other costs

3 unchanged sentences

Consolidated operating income

1,578 2,001 3,141 4,822

Interest income 178 36 324 54

4 unchanged sentences

$ 1,430 $ 1,917 $ 2,793 $ 4,457

Cost of revenues adjustments included in the above table consist of charges for the sale of inventories revalued at the date of acquisition and inventory write-downs associated with large-scale abandonment of product lines.

Cost of revenues adjustments 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 abandonment of product lines, and accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations.

Selling, general and administrative expenses adjustments included in the above table consist of third-party transaction/integration costs related to recent acquisitions and charges/credits for changes in estimates of contingent acquisition consideration.

1 unchanged sentence

Revenues by country based on customer location are as follows:

Three months ended

(In millions) April 1, 2023 April 2, 2022

Three months ended Six months ended

(In millions) July 1, 2023 July 2, 2022 July 1, 2023 July 2, 2022

United States

$ 5,531 $ 5,846 $ 11,118 $ 11,943

856 1,001 1,726 1,911

4,300 4,123 8,553 8,934

Consolidated revenues

3 unchanged sentences

The provision for income taxes in the accompanying statements of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

Three months ended

(In millions) April 1, 2023 April 2, 2022

Six months ended

(In millions) July 1, 2023 July 2, 2022

Statutory federal income tax rate

12 unchanged sentences

Intra-entity transfers

Valuation allowances

( 144 ) ( 18 )

Foreign exchange loss on inter-company debt refinancing

Provision for (reversal of) valuation allowances, net

Withholding taxes

1 unchanged sentence

State income taxes, net of federal tax

( 27 ) ( 42 )

Provision for income taxes

4 unchanged sentences

Unrecognized Tax Benefits

As of April 1, 2023 the company had $ 0.56 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

As of July 1, 2023 the company had $ 0.56 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

6 unchanged sentences

Earnings per Share

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions except per share amounts) 2023 2022 2023 2022

11 unchanged sentences

Debt and Other Financing Arrangements

Effective interest rate at April 1, April 1, December 31,

Effective interest rate at July 1, July 1, December 31,

(Dollars in millions) 2023 2023 2022

75 unchanged sentences

1.98 % 1,091 1,071

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

2.07 % 813 803

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Effective interest rate at April 1, April 1, December 31,

Effective interest rate at July 1, July 1, December 31,

(Dollars in millions) 2023 2023 2022

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

2.07 % 818 803

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

22 unchanged sentences

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 April 1, 2023, no borrowings were outstanding under the Facility, although available capacity was reduced by immaterial outstanding letters of credit.

As of July 1, 2023, 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 April 1, 2023, there were $ 0.82 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.

Each of the fixed rate senior notes may be redeemed at a redemption price of 100 % of the principal amount plus a specified make-whole premium and accrued interest.

Each of the U.S.

dollar and euro-denominated fixed rate senior notes may be redeemed at a redemption price of 100 % of the principal amount plus a specified make-whole premium and accrued interest.

Except for the euro-denominated floating rate senior notes, which may not be redeemed early, the floating rate senior notes may be redeemed in whole or in part on or after their applicable call dates at a redemption price of 100 % of the principal amount plus accrued interest.

The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which limits the ability of the company to pledge principal properties as security under borrowing arrangements.

The company was in compliance with all covenants at April 1, 2023.

The company was in compliance with all covenants at July 1, 2023.

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

12 unchanged sentences

Expenses for environmental remediation matters related to the costs of installing, operating and maintaining groundwater-treatment systems and other remedial activities related to historical environmental contamination at the company’s domestic and international facilities were not material in any period presented.

At April 1, 2023, there have been no material changes to the accruals for pending environmental-related matters disclosed in the company’s 2022 financial statements and notes included in the company’s Annual Report on Form 10-K.

At July 1, 2023, there have been no material changes to the accruals for pending environmental-related matters disclosed in the company’s 2022 financial statements and notes included in the company’s Annual Report on Form 10-K.

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 and cash flows.

7 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.

At April 1, 2023, there have been no material changes to the accruals for pending product liability, workers compensation, and other personal injury matters disclosed in the company’s 2022 financial statements and notes included in the company’s Annual Report on Form 10-K.

At July 1, 2023, there have been no material changes to the accruals for pending product liability, workers compensation, and other personal injury matters disclosed in the company’s 2022 financial statements and notes included in the company’s Annual Report on Form 10-K.

Although the company believes that the amounts accrued and estimated insurance recoveries are probable and appropriate based on available information, including actuarial studies of loss estimates, the process of estimating losses and insurance recoveries involves a considerable degree of judgment by management and the ultimate amounts could vary, which could have a material adverse effect on the company’s results of operations, financial position, and cash flows.

5 unchanged sentences

Comprehensive Income/(Loss)

Changes in each component of accumulated other comprehensive income/(loss), net of tax, are as follows:

8 unchanged sentences

Net other comprehensive income/(loss)

Balance at April 1, 2023 $ ( 2,839 ) $ ( 30 ) $ ( 185 ) $ ( 3,054 )

173 4 ( 2 ) 175

Balance at July 1, 2023 $ ( 2,707 ) $ ( 29 ) $ ( 188 ) $ ( 2,924 )

Fair Value Measurements and Fair Value of Financial Instruments

1 unchanged sentence

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

April 1, Quoted

July 1, Quoted

markets Significant

32 unchanged sentences

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

In the first three months ended April 1, 2023 and April 2, 2022, the company recorded $ 44 million and $ 139 million, respectively, of net losses on investments, which are included in other income/(expense) in the accompanying statements of income.

In the six months ended July 1, 2023, the company recorded $ 44 million, of net losses on investments, which are included in other income/(expense) in the accompanying statements of income.

In the three and six months ended July 2, 2022, the company recorded $ 17 million and $( 122 ) million, respectively, of net gains (losses) on investments, which are included in other income/(expense) in the accompanying statements of income.

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 recapitalization investment portfolio), of the contingent consideration.

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions) 2023 2022 2023 2022

7 unchanged sentences

The following table provides the aggregate notional value of outstanding derivative contracts.

(In millions) April 1, 2023 December 31, 2022

(In millions) July 1, 2023 December 31, 2022

Notional amount

7 unchanged sentences

Fair value – assets Fair value – liabilities

April 1, December 31, April 1, December 31,

July 1, December 31, July 1, December 31,

(In millions) 2023 2022 2023 2022

8 unchanged sentences

Gain (loss) recognized

Three months ended

April 1, April 2,

Three months ended Six months ended

July 1, July 2, July 1, July 2,

(In millions) 2023 2022 2023 2022

6 unchanged sentences

Included in currency translation adjustment within other comprehensive items

( 62 ) 671 ( 206 ) 1,033

Cross-currency interest rate swaps

4 unchanged sentences

Included in cost of product revenues

— 21 ( 3 ) 12

Included in other income/(expense)

( 25 ) 13 ( 2 ) 12

Gains and losses recognized on currency exchange contracts are included in the accompanying statements of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.

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.

The company uses foreign currency-denominated debt, certain foreign currency-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 currency-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 currency-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.

See Note 1 to the consolidated financial statements for 2022 included in the company’s Annual Report on Form 10-K for additional information on the company’s risk management objectives and strategies.

3 unchanged sentences

The carrying value and fair value of the company’s debt instruments are as follows:

April 1, 2023 December 31, 2022

July 1, 2023 December 31, 2022

Carrying Fair Carrying Fair

6 unchanged sentences

Supplemental Cash Flow Information

Three months ended

(In millions) April 1, 2023 April 2, 2022

Six months ended

(In millions) July 1, 2023 July 2, 2022

Non-cash investing and financing activities

4 unchanged sentences

Cash, cash equivalents and restricted cash is included in the accompanying balance sheet as follows:

(In millions) April 1, 2023 December 31, 2022

(In millions) July 1, 2023 December 31, 2022

Cash and cash equivalents $ 3,133 $ 8,524

4 unchanged sentences

Restructuring and Other Costs

In the first three months of 2023, restructuring and other costs primarily included impairment of long-lived assets, net charges for pre-acquisition litigation and other matters, and continuing charges for headcount reductions and facility consolidations in an effort to streamline operations.

In 2023, severance actions associated with facility consolidations and cost reduction measures affected less than 2 % of the company’s workforce.

As of May 5, 2023, the company has identified restructuring actions that will result in additional charges of approximately $ 125 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.

In the first six months of 2023, restructuring and other costs primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, impairment of long-lived assets, and, to a lesser extent, net charges for pre-acquisition litigation and other matters.

In 2023, severance actions associated with facility consolidations and cost reduction measures affected approximately 3 % of the company’s workforce.

As of August 4, 2023, the company has identified restructuring actions that will result in additional charges of approximately $ 85 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 by segment are as follows:

Three months ended

(In millions) April 1, 2023

Three months ended Six months ended

(In millions) July 1, 2023 July 1, 2023

Life Sciences Solutions

9 unchanged sentences

Net restructuring charges incurred in 2023 (b)

Balance at April 1, 2023 $ 55

Balance at July 1, 2023 $ 98

(a) The movements in the restructuring liability principally consist of severance and other costs associated with facility consolidations.

(b) Excludes $ 62 million of net charges, principally $ 38 million of charges for impairment of long-lived assets in the Life Sciences Solutions and Laboratory Products and Biopharma Services segments, and, to a lesser extent, $ 18 million of net charges for pre-acquisition litigation and other matters.

(b) Excludes $ 158 million of net charges, principally $ 99 million of charges for impairment of long-lived assets in the Laboratory Products and Biopharma Services and Life Sciences Solutions segments, $ 26 million of contract termination costs associated with facility closures in the Laboratory Products and Biopharma Services segment, and, to a lesser extent, $ 18 million of net charges for pre-acquisition litigation and other matters.

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

1 unchanged sentence

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-Q

Item 1. Financial Statements