What changed in this filing

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Item 1. Financial Statements

2024-08-02 compared with 2024-05-03 · 186 added, 84 removed, 635 unchanged (30% of the section changed)

1 unchanged sentence

CONDENSED CONSOLIDATED BALANCE SHEETS

March 30, December 31,

June 29, December 31,

(In millions except share and per share amounts) 2024 2023

42 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

Three months ended

March 30, April 1,

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions except per share amounts) 2024 2023 2024 2023

2 unchanged sentences

Service revenues

4,378 4,416 8,768 8,722

Total revenues

2 unchanged sentences

Cost of product revenues

3,080 3,278 6,019 6,615

Cost of service revenues

3,114 3,158 6,315 6,391

Selling, general and administrative expenses

2,111 2,145 4,293 4,264

Research and development expenses

339 345 670 691

Restructuring and other costs

77 183 106 295

Total costs and operating expenses

8,722 9,109 17,404 18,256

Operating income 1,820 1,578 3,483 3,141

2 unchanged sentences

Other income/(expense)

5 — 14 ( 46 )

Income before income taxes

1,765 1,430 3,354 2,793

Provision for income taxes

14 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Three months ended

March 30, April 1,

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions) 2024 2023 2024 2023

4 unchanged sentences

Currency translation adjustment (net of tax provision (benefit) of $ 88 , $ 0 , $ 255 and $( 36 ))

346 125 802 169

Unrealized gains/(losses) on available-for-sale debt securities

4 unchanged sentences

Pension and other postretirement benefit liability adjustments arising during the period (net of tax (provision) benefit of $ 0 , $ 1 , $ 0 and $ 0 )

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

1 ( 2 ) 1 ( 2 )

Total other comprehensive income/(loss) 348 123 805 171

Comprehensive income

1,901 1,485 3,689 2,825

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

4 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Three months ended

March 30, April 1,

Six months ended

June 29, July 1,

(In millions) 2024 2023

21 unchanged sentences

Net proceeds from issuance of debt

Repayment of debt

Proceeds from issuance of commercial paper

20 unchanged sentences

(In millions) Shares Amount Shares Amount

Three months ended March 30, 2024

Three months ended June 29, 2024

Balance at March 30, 2024 $ 119 443 $ 443 $ 17,482 $ 48,542 61 $ ( 18,186 ) $ ( 2,764 ) $ 45,516 $ ( 12 ) $ 45,504

Issuance of shares under employees' and directors' stock plans

— — — 83 — — ( 2 ) — 81 — 81

Stock-based compensation

— — — 84 — — — — 84 — 84

Dividends declared ($ 0.39 per share)

— — — — ( 149 ) — — — ( 149 ) — ( 149 )

Net income/(loss)

6 — — — 1,548 — — — 1,548 — 1,548

Other comprehensive items

( 3 ) — — — — — — 351 351 — 351

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

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

Balance at June 29, 2024 $ 115 443 $ 443 $ 17,649 $ 49,940 61 $ ( 18,187 ) $ ( 2,413 ) $ 47,432 $ ( 12 ) $ 47,419

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

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS 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 June 29, 2024

Balance at December 31, 2023 $ 118 442 $ 442 $ 17,286 $ 47,364 56 $ ( 15,133 ) $ ( 3,224 ) $ 46,735 $ ( 11 ) $ 46,724

13 unchanged sentences

Excise tax from stock repurchases — — — — — — ( 28 ) — ( 28 ) — ( 28 )

Balance at March 30, 2024 $ 119 443 $ 443 $ 17,482 $ 48,542 61 $ ( 18,186 ) $ ( 2,764 ) $ 45,516 $ ( 12 ) $ 45,504

Three months ended April 1, 2023

Balance at June 29, 2024 $ 115 443 $ 443 $ 17,649 $ 49,940 61 $ ( 18,187 ) $ ( 2,413 ) $ 47,432 $ ( 12 ) $ 47,419

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 interest ( 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

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

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 March 30, 2024, the results of operations for the three-month periods ended March 30, 2024 and April 1, 2023, and the cash flows for the three-month periods ended March 30, 2024 and April 1, 2023.

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 June 29, 2024, the results of operations for the three- and six-month periods ended June 29, 2024 and July 1, 2023, and the cash flows for the six-month periods ended June 29, 2024 and July 1, 2023.

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

4 unchanged sentences

Note 1 to the consolidated financial statements for 2023 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 March 30, 2024.

There have been no material changes in the company’s significant accounting policies during the six months ended June 29, 2024.

Amounts and percentages reported within these condensed consolidated financial statements are presented and calculated based on underlying unrounded amounts.

1 unchanged sentence

The components of inventories are as follows:

(In millions) March 30, 2024 December 31, 2023

(In millions) June 29, 2024 December 31, 2023

Raw materials $ 1,974 $ 2,057

28 unchanged sentences

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.

Proposed Acquisition

On October 17, 2023, the company entered into a purchase agreement to acquire all of the issued and outstanding shares of Olink Holding AB (publ) at a price of $ 26.00 per share, or approximately $ 3.1 billion.

Olink is a leading provider of next-generation proteomics solutions that will expand the company’s capabilities in this field.

The company has commenced a tender offer to acquire all of the American Depositary Shares and common shares of Olink.

The transaction is expected to close by mid-year 2024, subject to the satisfaction of customary closing conditions including receipt of applicable regulatory approvals, and completion of the tender offer.

Upon completion, Olink will become part of the Life Sciences Solutions segment.

The company intends to finance the purchase price with cash on hand and the net proceeds from issuances of debt.

On July 10, 2024, the company acquired, within the Life Sciences Solutions segment, Olink Holding AB (publ), a Swedish-based provider of next-generation proteomics solutions.

The acquisition enhances the segment’s capabilities in the high-growth proteomics market with the addition of highly differentiated solutions.

It also complements the existing life sciences and mass spectrometry offerings, accelerating protein biomarker discovery and providing strong synergy opportunities.

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

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

(In billions) Olink

Purchase price

Fair value of noncontrolling interest

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 18 years.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The preliminary allocation of the purchase price for the acquisition of Olink is based on the 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.

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.

4 unchanged sentences

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

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

18 unchanged sentences

Revenues by type are as follows:

Three months ended

(In millions) March 30, 2024 April 1, 2023

Three months ended Six months ended

(In millions) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

$ 4,363 $ 4,433 $ 8,690 $ 8,939

1,800 1,838 3,428 3,736

4,378 4,416 8,768 8,722

Consolidated revenues $ 10,541 $ 10,687 $ 20,886 $ 21,397

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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

Three months ended

(In millions) March 30, 2024 April 1, 2023

Three months ended Six months ended

(In millions) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

North America

$ 5,529 $ 5,714 $ 11,048 $ 11,492

2,663 2,654 5,282 5,255

1,971 1,902 3,831 3,888

Other regions

379 417 725 762

Consolidated revenues $ 10,541 $ 10,687 $ 20,886 $ 21,397

1 unchanged sentence

See Note 4 for revenues by reportable segment and other geographic data.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Remaining Performance Obligations

The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of March 30, 2024 was $ 26.37 billion.

The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of June 29, 2024 was $ 25.93 billion.

The company will recognize revenues for these performance obligations as they are satisfied, approximately 52 % of which is expected to occur within the next twelve months .

3 unchanged sentences

Contract asset and liability balances are as follows:

(In millions) March 30, 2024 December 31, 2023

(In millions) June 29, 2024 December 31, 2023

Current contract assets, net $ 1,487 $ 1,443

2 unchanged sentences

Noncurrent contract liabilities 1,455 1,499

In the three months ended March 30, 2024, the company recognized revenues of $ 1.32 billion that were included in the contract liabilities balance at December 31, 2023.

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 and six months ended June 29, 2024, the company recognized revenues of $ 0.67 billion and $ 2.00 billion, respectively, that were included in the contract liabilities balance at December 31, 2023.

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.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Business Segment and Geographical Information

Business Segment Information

Three months ended

March 30, April 1,

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions) 2024 2023 2024 2023

2 unchanged sentences

Analytical Instruments

1,782 1,749 3,469 3,472

Specialty Diagnostics

1,117 1,109 2,227 2,217

Laboratory Products and Biopharma Services

5,758 5,831 11,480 11,594

( 470 ) ( 465 ) ( 930 ) ( 961 )

Consolidated revenues

2 unchanged sentences

Life Sciences Solutions

865 817 1,705 1,653

Analytical Instruments

439 432 838 853

Specialty Diagnostics

299 297 593 577

Laboratory Products and Biopharma Services

745 824 1,489 1,617

Subtotal reportable segments

2,347 2,370 4,625 4,700

Cost of revenues adjustments

1 unchanged sentence

Selling, general and administrative expenses adjustments

64 ( 6 ) 45 ( 14 )

Restructuring and other costs

3 unchanged sentences

Consolidated operating income

1,820 1,578 3,483 3,141

Interest income 295 178 574 324

1 unchanged sentence

Other income/(expense)

5 — 14 ( 46 )

Consolidated income before taxes

$ 1,765 $ 1,430 $ 3,354 $ 2,793

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.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Geographical Information

Revenues by country based on customer location are as follows:

Three months ended

(In millions) March 30, 2024 April 1, 2023

Three months ended Six months ended

(In millions) June 29, 2024 July 1, 2023 June 29, 2024 July 1, 2023

United States

$ 5,347 $ 5,531 $ 10,669 $ 11,118

5,194 5,156 10,217 10,279

Consolidated revenues

$ 10,541 $ 10,687 $ 20,886 $ 21,397

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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) March 30, 2024 April 1, 2023

Six months ended

(In millions) June 29, 2024 July 1, 2023

Statutory federal income tax rate

13 unchanged sentences

( 102 ) ( 144 )

Foreign exchange loss on inter-company debt refinancing

Provision for (reversal of) valuation allowances, net

1 unchanged sentence

Tax return reassessments and settlements

( 35 ) ( 38 )

State income taxes, net of federal tax

Equity method investments ( 45 ) ( 6 )

Provision for income taxes

During the first quarter of 2024, the company recorded a tax reserve and associated interest of $ 240 million related to the potential settlement of international tax audits for tax years 2009 through 2016.

During the second quarter of 2024, the company recorded a benefit of $ 183 million, primarily in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income.

The company has operations and a taxable presence in approximately 70 countries outside the U.S.

3 unchanged sentences

Unrecognized Tax Benefits

As of March 30, 2024 the company had $ 0.69 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

As of June 29, 2024 the company had $ 0.70 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:

1 unchanged sentence

Balance at beginning of year

Additions for tax positions of current year

Additions for tax positions of prior years

4 unchanged sentences

Earnings per Share

Three months ended

March 30, April 1,

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions except per share amounts) 2024 2023 2024 2023

9 unchanged sentences

Debt and Other Financing Arrangements

Effective interest rate at March 30, March 30, December 31,

Effective interest rate at June 29, June 29, December 31,

(Dollars in millions) 2024 2024 2023

52 unchanged sentences

1.8401 % 8 -Year Senior Notes, Due 3/8/2032 (Swiss franc-denominated)

2.375 % 12 -Year Senior Notes, Due 4/15/2032 (euro-denominated)

2.54 % 647 662

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

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Effective interest rate at March 30, March 30, December 31,

Effective interest rate at June 29, June 29, December 31,

(Dollars in millions) 2024 2024 2023

2.375 % 12 -Year Senior Notes, Due 4/15/2032 (euro-denominated)

2.54 % 643 662

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

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

55 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 March 30, 2024, no borrowings were outstanding under the Facility, although available capacity was reduced by immaterial outstanding letters of credit.

As of June 29, 2024, no borrowings were outstanding under the Facility, although available capacity was reduced by immaterial outstanding letters of credit.

THERMO FISHER SCIENTIFIC INC.

11 unchanged sentences

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

The company was in compliance with all covenants related to its senior notes at March 30, 2024.

The company was in compliance with all covenants related to its senior notes at June 29, 2024.

Thermo Fisher Scientific (Finance I) B.V.

(Thermo Fisher International), a wholly-owned finance subsidiary of the company, issued each of the following notes outstanding as of March 30, 2024, included in the table above (collectively, the “Euronotes”) in registered public offerings:

(Thermo Fisher International), a wholly-owned finance subsidiary of the company, issued each of the following notes outstanding as of June 29, 2024, included in the table above (collectively, the “Euronotes”) in registered public offerings:

the 0.00 % Senior Notes due 2025, the 0.80 % Senior Notes due 2030, the 1.125 % Senior Notes due 2033, the 1.625 % Senior Notes due 2041, and the 2.00 % Senior Notes due 2051.

7 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 March 30, 2024, there have been no material changes to the accruals for pending environmental-related matters disclosed in the company’s 2023 financial statements and notes included in the company’s Annual Report on Form 10-K.

At June 29, 2024, there have been no material changes to the accruals for pending environmental-related matters disclosed in the company’s 2023 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.

10 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 March 30, 2024, 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 2023 financial statements and notes included in the company’s Annual Report on Form 10-K.

At June 29, 2024, 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 2023 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.

11 unchanged sentences

adjustment Total

Three months ended June 29, 2024

Balance at March 30, 2024 $ ( 2,482 ) $ ( 1 ) $ ( 27 ) $ ( 254 ) $ ( 2,764 )

Other comprehensive income/(loss) before reclassifications

346 — — — 347

Amounts reclassified from accumulated other comprehensive income/(loss)

Net other comprehensive income/(loss)

349 — 1 1 351

Balance at June 29, 2024 $ ( 2,133 ) $ ( 1 ) $ ( 26 ) $ ( 253 ) $ ( 2,413 )

Six months ended June 29, 2024

Balance at December 31, 2023 $ ( 2,941 ) $ — $ ( 28 ) $ ( 255 ) $ ( 3,224 )

4 unchanged sentences

808 ( 1 ) 1 2 811

Balance at March 30, 2024 $ ( 2,482 ) $ ( 1 ) $ ( 27 ) $ ( 254 ) $ ( 2,764 )

Balance at June 29, 2024 $ ( 2,133 ) $ ( 1 ) $ ( 26 ) $ ( 253 ) $ ( 2,413 )

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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:

March 30, Quoted

June 29, Quoted

markets Significant

12 unchanged sentences

$ 35 $ — $ 23 $ 12

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

December 31, Quoted

16 unchanged sentences

The company initially measures the fair value of acquisition-related contingent consideration based on amounts expected to be transferred (probability-weighted) discounted to present value.

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

In the three months ended March 30, 2024 and April 1, 2023, the company recorded $ 10 million and $( 44 ) million, respectively, of net gains/(losses) on investments, which are included in other income/(expense) in the accompanying statements of income.

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

In the six-month periods ended June 29, 2024 and July 1, 2023 the company recorded $ 10 million and $( 44 ) 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

March 30, April 1,

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions) 2024 2023 2024 2023

1 unchanged sentence

Beginning balance $ 83 $ 136 $ 87 $ 174

Acquisitions (including assumed balances) — 1 — 1

Payments — ( 43 ) ( 2 ) ( 58 )

3 unchanged sentences

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

(In millions) March 30, 2024 December 31, 2023

(In millions) June 29, 2024 December 31, 2023

Cross-currency interest rate swaps designated as net investment hedge - euro $ 1,000 $ 1,000

4 unchanged sentences

The following tables present the fair value of derivative instruments in the accompanying balance sheets and statements of income.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair value – assets Fair value – liabilities

March 30, December 31, March 30, December 31,

June 29, December 31, June 29, December 31,

(In millions) 2024 2023 2024 2023

8 unchanged sentences

Gain (loss) recognized

Three months ended

March 30, April 1,

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions) 2024 2023 2024 2023

6 unchanged sentences

Included in currency translation adjustment within other comprehensive items

85 ( 62 ) 361 ( 206 )

Cross-currency interest rate swaps

Included in currency translation adjustment within other comprehensive items

293 59 736 50

Included in interest expense

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Gain (loss) recognized

Three months ended Six months ended

June 29, July 1, June 29, July 1,

(In millions) 2024 2023 2024 2023

Derivatives not designated as hedging instruments

2 unchanged sentences

Included in other income/(expense)

( 4 ) ( 25 ) ( 10 ) ( 2 )

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.

3 unchanged sentences

See Note 1 to the consolidated financial statements for 2023 included in the company’s Annual Report on Form 10-K for additional information on the company’s risk management objectives and strategies.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Fair Value of Other Financial Instruments

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

March 30, 2024 December 31, 2023

June 29, 2024 December 31, 2023

Carrying Fair Carrying Fair

5 unchanged sentences

Supplemental Cash Flow Information

Three months ended

(In millions) March 30, 2024 April 1, 2023

Six months ended

(In millions) June 29, 2024 July 1, 2023

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) March 30, 2024 December 31, 2023

(In millions) June 29, 2024 December 31, 2023

Cash and cash equivalents $ 7,073 $ 8,077

3 unchanged sentences

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

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Restructuring and Other Costs

In the first three months of 2024, restructuring and other costs primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations.

In 2024, severance actions associated with facility consolidations and cost reduction measures affected less than 1 % of the company’s workforce.

As of May 3, 2024, the company has identified restructuring actions that will result in additional charges of approximately $ 75 million, primarily in 2024, 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 2024, 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 2024, severance actions associated with facility consolidations and cost reduction measures affected approximately 1 % of the company’s workforce.

As of August 2, 2024, the company has identified restructuring actions that will result in additional charges of approximately $ 80 million, primarily in 2024, 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) March 30, 2024

Three months ended Six months ended

(In millions) June 29, 2024 June 29, 2024

Life Sciences Solutions

2 unchanged sentences

Laboratory Products and Biopharma Services

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes the changes in the company’s accrued restructuring balance, which is included in other accrued expenses in the accompanying balance sheet.

4 unchanged sentences

Currency translation

Balance at March 30, 2024 $ 51

Balance at June 29, 2024 $ 49

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

(b) Excludes $ 4 million of net non-cash charges.

(b) Excludes $ 55 million of net charges, principally $ 47 million of charges for impairment of long-lived assets in the Laboratory Products and Biopharma Services and Life Sciences Solutions segments.

The company expects to pay accrued restructuring costs primarily through 2024.

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