THERMO FISHER SCIENTIFIC INC. 10-K

Item 8. Financial Statements and Supplementary Data INDEX OF CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 30 Consolidated Balance Sheets as of December 31, 2025 and 2024 33 Consolidated Statements of Income for the years ended December 31, 2025, 2024 and 2023 34 Consolidated Statements of Comprehensive Income for the years ended December 31, 2025, 2024 and 2023 35 Consolidated Statements of Cash Flows for the years ended December 31, 2025, 2024 and 2023 36 Consolidated Statements of Redeemable Noncontrolling Interest and Equity for the years ended December 31 , 2025, 2024 and 2023 37 Notes to Consolidated Financial Statements Note 1. Nature of Operations and Summary of Significant Accounting Policies 38 Note 2. Supplemental Balance Sheet Information 45 Note 3. Debt and Other Financing Arrangements 47 Note 4. Fair Value Measurements 49 Note 5. Commitments and Contingencies 51 Note 6. Supplemental Income Statement Information 53 Note 7. Income Taxes 55 Note 8. Comprehensive Income/(Loss) and Shareholders' Equity 60 Note 9. Supplemental Cash Flow Information 60 Note 10. Derivatives 61 Note 11. Business Segment and Geographical Information 62 Note 12. Acquisitions 66 Note 13. Leases 68 Note 14. Pension and Other Postretirement Benefit Plans 69 Note 15. Stock-based Compensation Expense 74 29 Report of Independent Registered Public Accounting Firm To the Board of Directors and Shareholders of Thermo Fisher Scientific Inc. Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Thermo Fisher Scientific Inc. and its subsidiaries (the "Company") as of December 31, 2025 and 2024, and the related consolidated statements of income, of comprehensive income, of redeemable noncontrolling interest and equity and of cash flows for each of the three years in the period ended December 31, 2025, including the related notes (collectively referred to as the "consolidated financial statements"). We also have audited the Company's internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management’s Annual Report on Internal Control Over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. 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 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. Our audits also included performing such other procedures as we considered necessary in the circumstances. 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 the filtration and separation business, which was acquired by the company from Solventum Corporation, from its assessment of internal control over financial reporting as of December 31, 2025, because it was acquired by the Company in a purchase business combination during 2025. We have also excluded the filtration and separation business from our audit of internal control over financial reporting. The filtration and separation business’s total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent approximately 1% and 1%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2025. 30 Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (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. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters 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. Income taxes As described in Note 7 to the consolidated financial statements, the Company’s provision for income taxes for the year ended December 31, 2025 was $547 million. The Company has deferred tax assets, net, of $249 million (including a valuation allowance of $3,561 million) and unrecognized tax benefits of $419 million as of December 31, 2025. 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. tax authorities, as well as to tax agreements and treaties among these governments. Determination of taxable income in any jurisdiction requires management to interpret the related tax laws and regulations and to use estimates and assumptions regarding significant future events, such as the amount, timing and character of deductions, permissible revenue recognition methods under the tax law and the sources and character of income and tax credits. Management assesses income tax positions and records tax benefits for all years subject to examination based upon management’s evaluation of the facts, circumstances and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, management has recorded the largest amount of tax benefit with a greater than 50 percent likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is not more likely than not that a tax benefit will be sustained, no tax benefit has been recognized in the financial statements. Management estimates the degree to which tax assets will result in a benefit, after consideration of all positive and negative evidence, and provides a valuation allowance for tax assets that it believes will more likely than not go unused. In situations in which management has been able to determine that the Company’s deferred tax assets will be realized, that determination generally relies on future reversals of taxable temporary differences and expected future taxable income. If it becomes more likely than not that a tax asset will be used, management reverses the related valuation allowance. The principal considerations for our determination that performing procedures relating to income taxes is a critical audit matter are (i) the significant judgment by management when interpreting the numerous and complex tax laws and regulations as it relates to determining the provision for income taxes, deferred tax assets and liabilities, including the valuation allowance, and liabilities for unrecognized tax benefits, (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the provision for income taxes, deferred tax assets and liabilities, including the valuation allowance, and liabilities for unrecognized tax benefits, and (iii) the audit effort involved the use of professionals with specialized skill and knowledge. 31 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 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. 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. /s/ PricewaterhouseCoopers LLP Boston, Massachusetts February 26, 2026 We have served as the Company’s auditor since 2002. 32 THERMO FISHER SCIENTIFIC INC. CONSOLIDATED BALANCE SHEETS December 31, December 31, (In millions except share and per share amounts) 2025 2024 Assets Current assets: Cash and cash equivalents $ 9,852 $ 4,009 Short-term investments 253 1,561 Accounts receivable, less allowances of $ 147 and $ 173 8,900 8,191 Inventories 5,425 4,978 Contract assets, net 1,666 1,435 Other current assets 2,612 1,964 Total current assets 28,707 22,137 Property, plant and equipment, net 10,565 9,306 Acquisition-related intangible assets, net 15,838 15,533 Other assets 5,871 4,492 Goodwill 49,362 45,853 Total assets $ 110,343 $ 97,321 Liabilities, redeemable noncontrolling interest and equity Current liabilities: Short-term obligations and current maturities of long-term obligations $ 3,533 $ 2,214 Accounts payable 3,622 3,079 Accrued payroll and employee benefits 1,995 1,988 Contract liabilities 2,710 2,852 Other accrued expenses 3,329 3,199 Total current liabilities 15,189 13,332 Deferred income taxes 1,493 1,268 Other long-term liabilities 4,273 3,989 Long-term obligations 35,852 29,061 Commitments and contingencies (Note 5) Redeemable noncontrolling interest 122 120 Equity: Thermo Fisher Scientific Inc. shareholders’ equity: Preferred stock, $ 100 par value, 50,000 shares authorized; none issued — — Common stock, $ 1 par value, 1,200,000,000 shares authorized; 445,160,301 and 443,841,240 shares issued 445 444 Capital in excess of par value 18,563 17,962 Retained earnings 59,156 53,102 Treasury stock at cost, 68,938,831 and 63,066,906 shares ( 22,309 ) ( 19,226 ) Accumulated other comprehensive income/(loss) ( 2,448 ) ( 2,697 ) Total Thermo Fisher Scientific Inc. shareholders’ equity 53,407 49,584 Noncontrolling interests 7 ( 33 ) Total equity 53,415 49,551 Total liabilities, redeemable noncontrolling interest and equity $ 110,343 $ 97,321 The accompanying notes are an integral part of these consolidated financial statements. 33 THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENTS OF INCOME Year Ended December 31, December 31, December 31, (In millions except per share amounts) 2025 2024 2023 Revenues Product revenues $ 25,965 $ 25,034 $ 25,243 Service revenues 18,592 17,845 17,614 Total revenues 44,556 42,879 42,857 Costs and operating expenses: Cost of product revenues 13,405 12,523 13,168 Cost of service revenues 12,913 12,654 12,589 Selling, general and administrative expenses 8,732 8,595 8,445 Research and development expenses 1,397 1,390 1,337 Restructuring and other costs 362 379 459 Total costs and operating expenses 36,810 35,542 35,998 Operating income 7,746 7,337 6,859 Interest income 993 1,078 879 Interest expense ( 1,419 ) ( 1,390 ) ( 1,375 ) Other income/(expense) ( 12 ) 12 ( 65 ) Income before income taxes 7,308 7,037 6,298 Benefit from/(provision for) income taxes ( 547 ) ( 657 ) ( 284 ) Equity in earnings/(losses) of unconsolidated entities ( 41 ) ( 42 ) ( 59 ) Net income 6,721 6,338 5,955 Less: net income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest 17 3 ( 40 ) Net income attributable to Thermo Fisher Scientific Inc. $ 6,704 $ 6,335 $ 5,995 Earnings per share attributable to Thermo Fisher Scientific Inc. Basic $ 17.77 $ 16.58 $ 15.52 Diluted $ 17.74 $ 16.53 $ 15.45 Weighted average shares Basic 377 382 386 Diluted 378 383 388 The accompanying notes are an integral part of these consolidated financial statements. 34 THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME Year Ended December 31, December 31, December 31, (In millions) 2025 2024 2023 Comprehensive income/(loss) Net income $ 6,721 $ 6,338 $ 5,955 Other comprehensive income/(loss): Cumulative translation adjustment: Cumulative translation adjustment (net of tax provision (benefit) of $( 386 ), $ 317 and $( 134 )) 223 525 ( 69 ) Reclassification adjustment for losses included in net income 6 — — Unrealized gains and losses on hedging instruments: Reclassification adjustment for losses included in net income (net of tax benefit of $ 1 , $ 1 and $ 2 ) 3 3 5 Pension and other postretirement benefit liability adjustments: Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision (benefit) of $ 4 , $ 2 and $( 22 )) 13 ( 12 ) ( 69 ) Amortization of net loss and prior service benefit included in net periodic pension cost (net of tax benefit of $ 1 , $ 1 and $ 1 ) 5 4 — Total other comprehensive income/(loss) 250 520 ( 133 ) Comprehensive income/(loss) 6,970 6,858 5,822 Less: comprehensive income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest 17 ( 4 ) ( 48 ) Comprehensive income attributable to Thermo Fisher Scientific Inc. $ 6,953 $ 6,862 $ 5,870 The accompanying notes are an integral part of these consolidated financial statements. 35 THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENTS OF CASH FLOWS Year Ended December 31, December 31, December 31, (In millions) 2025 2024 2023 Operating activities Net income $ 6,721 $ 6,338 $ 5,955 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation of property, plant and equipment 1,050 1,156 1,068 Amortization of acquisition-related intangible assets 1,730 1,952 2,338 Change in deferred income taxes ( 639 ) ( 1,209 ) ( 1,300 ) Stock-based compensation 310 301 278 Other net non-cash expenses 455 508 604 Changes in assets and liabilities, excluding the effects of acquisitions: Accounts receivable ( 426 ) ( 171 ) ( 43 ) Inventories ( 74 ) ( 27 ) 598 Contract assets/liabilities ( 375 ) ( 162 ) 252 Accounts payable 421 212 ( 500 ) Contributions to retirement plans ( 42 ) ( 45 ) ( 42 ) Other ( 1,312 ) ( 186 ) ( 802 ) Net cash provided by operating activities 7,818 8,667 8,406 Investing activities Purchases of property, plant and equipment ( 1,525 ) ( 1,400 ) ( 1,479 ) Proceeds from sale of property, plant and equipment 44 57 87 Proceeds from cross-currency interest rate swap interest settlements 268 252 70 Acquisitions, net of cash acquired ( 4,037 ) ( 3,132 ) ( 3,660 ) Purchases of investments ( 383 ) ( 3,396 ) ( 208 ) Proceeds from sales and maturities of investments 1,565 1,770 15 Other investing activities, net 21 8 33 Net cash used in investing activities ( 4,047 ) ( 5,841 ) ( 5,142 ) Financing activities Net proceeds from issuance of debt 7,759 1,204 5,942 Repayment of debt ( 2,412 ) ( 3,607 ) ( 5,782 ) Proceeds from issuance of commercial paper 1,095 — 1,620 Repayments of commercial paper ( 1,095 ) — ( 1,935 ) Purchases of company common stock ( 3,000 ) ( 4,000 ) ( 3,000 ) Dividends paid ( 636 ) ( 583 ) ( 523 ) Other financing activities, net 90 195 56 Net cash provided by/(used in) financing activities 1,801 ( 6,792 ) ( 3,622 ) Exchange rate effect on cash 267 ( 91 ) ( 82 ) Increase/(decrease) in cash, cash equivalents and restricted cash 5,839 ( 4,057 ) ( 440 ) Cash, cash equivalents and restricted cash at beginning of year 4,040 8,097 8,537 Cash, cash equivalents and restricted cash at end of year $ 9,879 $ 4,040 $ 8,097 The accompanying notes are an integral part of these consolidated financial statements. 36 THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY Redeemable Noncontrolling Interest Common Stock Capital in Excess of Par Value Retained Earnings Treasury Stock Accumulated Other Comprehensive Income/(Loss) Total Thermo Fisher Scientific Inc. Shareholders’ Equity Noncontrolling Interests Total Equity (In millions) Shares Amount Shares Amount Balance at December 31, 2022 $ 116 441 $ 441 $ 16,743 $ 41,910 50 $ ( 12,017 ) $ ( 3,099 ) $ 43,978 $ 54 $ 44,032 Issuance of shares under stock plans — 1 1 265 — 1 ( 88 ) — 178 — 178 Stock-based compensation — — — 278 — — — — 278 — 278 Purchases of company common stock — — — — — 5 ( 3,000 ) — ( 3,000 ) — ( 3,000 ) Dividends declared ($ 1.40 per share) — — — — ( 541 ) — — — ( 541 ) — ( 541 ) Net income/(loss) 19 — — — 5,995 — — — 5,995 ( 59 ) 5,936 Other comprehensive income/(loss) ( 3 ) — — — — — — ( 125 ) ( 125 ) ( 5 ) ( 130 ) Contributions from (distributions to) noncontrolling interests ( 14 ) — — — — — — — — ( 1 ) ( 1 ) Excise tax from stock repurchases — — — — — — ( 28 ) — ( 28 ) — ( 28 ) Balance at December 31, 2023 118 442 442 17,286 47,364 56 ( 15,133 ) ( 3,224 ) 46,735 ( 11 ) 46,724 Issuance of shares under stock plans — 2 2 376 — — ( 67 ) — 310 — 310 Stock-based compensation — — — 301 — — — — 301 — 301 Purchases of company common stock — — — — — 7 ( 4,000 ) — ( 4,000 ) — ( 4,000 ) Dividends declared ($ 1.56 per share) — — — — ( 596 ) — — — ( 596 ) — ( 596 ) Net income/(loss) 23 — — — 6,335 — — — 6,335 ( 20 ) 6,315 Other comprehensive income/(loss) ( 6 ) — — — — — — 527 527 — 527 Contributions from (distributions to) noncontrolling interests ( 14 ) — — — — — — — — ( 1 ) ( 1 ) Excise tax from stock repurchases — — — — — — ( 26 ) — ( 26 ) — ( 26 ) Balance at December 31, 2024 120 444 444 17,962 53,102 63 ( 19,226 ) ( 2,697 ) 49,584 ( 33 ) 49,551 Issuance of shares under stock plans — 1 1 291 — — ( 59 ) — 234 — 234 Stock-based compensation — — — 310 — — — — 310 — 310 Purchases of company common stock — — — — — 6 ( 3,000 ) — ( 3,000 ) — ( 3,000 ) Dividends declared ($ 1.72 per share) — — — — ( 650 ) — — — ( 650 ) — ( 650 ) Net income/(loss) 17 — — — 6,704 — — — 6,704 ( 1 ) 6,703 Other comprehensive income/(loss) — — — — — — — 249 249 — 249 Contributions from (distributions to) noncontrolling interests ( 16 ) — — — — — — — — ( 2 ) ( 2 ) Excise tax from stock repurchases — — — — — — ( 24 ) — ( 24 ) — ( 24 ) Disposition — — — — — — — — — 42 42 Balance at December 31, 2025 $ 122 445 $ 445 $ 18,563 $ 59,156 69 $ ( 22,309 ) $ ( 2,448 ) $ 53,407 $ 7 $ 53,415 The accompanying notes are an integral part of these consolidated financial statements. 37 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1. Nature of Operations and Summary of Significant Accounting Policies Nature of Operations 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, 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. Principles of Consolidation The accompanying financial statements include the accounts of the company and its wholly and majority-owned subsidiaries. All material intercompany accounts and transactions have been eliminated. 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 a premium upon the occurrence of certain events. Presentation Certain reclassifications of prior year amounts have been made to conform to the current year presentation. Amounts and percentages reported within these consolidated financial statements are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding. Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. 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. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents consists principally of money market funds and other marketable securities purchased with a remaining maturity of three months or less. These investments are carried at cost, which approximates market value (Note 4). Inventories Inventories are valued at the lower of cost or net realizable value, cost being determined by the first-in, first-out (FIFO) method. The company periodically reviews quantities of inventories on hand and compares these amounts to the expected use of each product or product line. In addition, the company has certain inventory that is subject to fluctuating market pricing. The company records a charge to cost of sales for the amount required to reduce the carrying value of inventory to net realizable value. Costs associated with the procurement of inventories, such as inbound freight charges, purchasing and receiving costs, and internal transfer costs, are included in cost of revenues in the accompanying statement of income (Note 2). 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 credit losses is the company’s best estimate of the amount of probable credit losses in existing accounts receivable. The company determines the allowance based on history of similarly aged receivables, the creditworthiness of the customer, reasons for delinquency, current economic conditions, expectations associated with future events and circumstances where reasonable and supportable forecasts are available and any other information that is relevant to the judgment. Receivables from academic and government customers as well as large, well-capitalized commercial customers have historically experienced less collectability risk. Account balances are charged off against the allowance when the company believes it is probable the receivable will not be recovered. The company does not have any off-balance-sheet credit exposure related to customers. 38 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Contract assets include revenues recognized in advance of billings where the company’s right to bill includes something other than the passage of time. Such amounts are recorded net of estimated losses resulting from the inability to invoice customers, which is primarily due to risk associated with the company’s performance. Contract assets are classified as current or noncurrent based on the amount of time expected to lapse until the company's right to consideration becomes unconditional. Contract liabilities include billings in excess of revenues recognized, such as those resulting from customer advances and deposits and unearned revenues on service contracts. Contract liabilities are classified as current or noncurrent based on the periods over which remaining performance obligations are expected to be transferred to customers. Contract assets and liabilities are presented on a net basis in the consolidated balance sheet if they arise from different performance obligations in the same contract. Noncurrent contract assets and noncurrent contract liabilities are included within other assets and other long-term liabilities in the accompanying balance sheets, respectively (Note 2). Property, Plant and Equipment Property, plant and equipment are recorded at cost. The costs of additions and improvements are capitalized, while maintenance and repairs are charged to expense as incurred. The company generally provides for depreciation and amortization using the straight-line method over the estimated useful lives of the property as follows: buildings and improvements, 25 to 40 years; machinery and equipment, 8 to 10 years; internal use software, 3 to 5 years; and leasehold improvements, the shorter of the term of the lease or the life of the asset. When assets are retired or otherwise disposed of, the assets and related accumulated depreciation are eliminated from the accounts and the resulting gain or loss is reflected in the accompanying statement of income (Note 2). Acquisition-related Intangible Assets Acquisition-related intangible assets include the costs of acquired customer relationships, product technology, trade names, backlog and other specifically identifiable intangible assets, and are being amortized using the straight-line method over their estimated useful lives, which range up to 20 years. The company uses the income approach to initially measure acquired customer relationships for which the key assumptions are typically estimated customer attrition rates and discount rates. The company reviews intangible assets for impairment when indication of potential impairment exists, such as a significant reduction in cash flows associated with the assets. When impairment indicators exist, the company determines whether the carrying value of its intangible assets exceeds the related undiscounted cash flows. In these situations, the carrying value is written down to fair value. In addition, the company has trade names that have indefinite lives and which are not amortized. Intangible assets with indefinite lives are reviewed for impairment annually or whenever events or changes in circumstances indicate they may be impaired. The company may perform an optional qualitative assessment. If the company determines that the fair value of the indefinite-lived intangible asset is more likely than not greater than its carrying amount, no additional testing is necessary. If not, or if the company bypasses the optional qualitative assessment, it writes the carrying value down to the fair value, if applicable (Note 2). Investments Investments include marketable securities, such as marketable equity securities, available for sale debt securities, and bank time deposits with maturities greater than three months, equity method investments, and non-marketable equity investments. The company classifies investments as current or noncurrent based on the nature of the securities and their availability for use in current operations. Noncurrent investments are included in other assets. Marketable securities are stated at fair value with all realized and unrealized gains and losses on investments in marketable equity securities and realized gains and losses on available-for-sale debt securities recognized in other income/(expense). The company accounts for investments in businesses using the equity method when it has the ability to exercise significant influence but not control (generally between 20% and 50% ownership), is not the primary beneficiary and has not elected the fair value option. The company’s share of gains and losses in, and impairments of, equity method investments are recorded in equity in earnings/(losses) of unconsolidated entities. Equity investments that do not have readily determinable fair values and are not eligible for the net asset value (NAV) practical expedient are measured at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuer. The company performs qualitative assessments to identify impairments of these investments. All gains and losses on non-equity method investments are recognized in other income/(expense). 39 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Other Assets Other assets in the accompanying balance sheet include operating lease right-of-use assets, investments, deferred tax assets, pension assets, insurance recovery receivables related to product liability matters, certain intangible assets and other assets. Goodwill The company assesses goodwill for impairment at the reporting unit level annually and whenever events occur or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. Such events or circumstances generally include the occurrence of operating losses or a significant decline in earnings associated with one or more of the company’s reporting units. The company is permitted to first assess qualitative factors to determine whether the quantitative goodwill impairment test is necessary. If the qualitative assessment results in a determination that the fair value of a reporting unit is more likely than not less than its carrying amount, the company performs a quantitative goodwill impairment test. The company may bypass the qualitative assessment for the reporting unit in any period and proceed directly to the quantitative goodwill impairment test. The company estimates the fair value of its reporting units by using forecasts of discounted future cash flows and peer market multiples. The company would record an impairment charge based on the excess of a reporting unit’s carrying amount over its fair value (limited to the amount of goodwill). The company determined that no impairments existed in 2025, 2024 or 2023 (Note 2). Fair Value Measurements Assets and liabilities carried at fair value are classified and disclosed in one of the following three categories: Level 1: Quoted market prices in active markets for identical assets or liabilities that the company has the ability to access. Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves. Level 3: Inputs are unobservable data points that are not corroborated by market data. The company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer. The fair value of derivative contracts is the estimated amount that the company would receive/pay upon liquidation of the contracts, taking into account the change in interest rates and currency exchange rates. The company initially measures acquisition-related contingent consideration at fair value. Changes to the fair values of contingent consideration are recorded in selling, general and administrative expenses. The company determines the fair value of its equity method and non-marketable equity investments that are not eligible for the NAV practical expedient by considering factors such as financial position, operating results and cash flows of the investee; recent transactions in the same or similar securities; significant recent events affecting the investee; the price paid by the company; among others (Note 4). Loss Contingencies Accruals are recorded for various contingencies, including legal proceedings, environmental, workers’ compensation, product, general and auto liabilities, self-insurance and other claims that arise in the normal course of business. The accruals are based on management’s judgment, historical claims experience, the probability of losses and, where applicable, the consideration of opinions of internal and/or external legal counsel and actuarial estimates. Additionally, the company records receivables from third-party insurers up to the amount of the loss when recovery has been determined to be probable. The company records accruals for environmental remediation liabilities, based on current interpretations of environmental laws and regulations, when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. 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 maintenance of cleanup sites. The company determines the probability and range of possible loss for its litigation and other contingencies based on the current status of each of these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The company establishes a liability that is an estimate of amounts expected to be paid in the future for events that have already occurred. The company accrues the most likely amount or at least the minimum of the range of probable loss when a range of probable loss can be estimated. The accrued liabilities are based on management’s judgment as to the probability of losses for asserted and unasserted claims and, where applicable, actuarially determined estimates. Accrual estimates are adjusted as additional information becomes known or payments are made. The amount of ultimate loss may differ from these estimates (Note 5). 40 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Warranty Obligations The company provides for the estimated cost of standard product warranties, primarily from historical information, in cost of product revenues at the time product revenues are recognized. The liability for warranties is included in other accrued expenses in the accompanying balance sheet. Extended warranty agreements are considered service contracts, which are discussed above. Costs of service contracts are recognized as incurred. Foreign Currency Translation All assets and liabilities of the company’s subsidiaries operating in non-U.S. dollar currencies are translated at period-end exchange rates. Resulting translation adjustments are reflected in the “accumulated other comprehensive income/(loss)” component of shareholders’ equity. Revenues and expenses are translated at average exchange rates for the period (Note 6). Revenue Recognition Consumables revenues consist of single-use products and are recognized at a point in time following the transfer of control of such products to the customer, which generally occurs upon shipment. Instruments revenues typically consist of longer-lived assets that, for the substantial majority of sales, are recognized at a point in time in a manner similar to consumables. Service revenues (primarily clinical research, pharmaceutical, and instrument and enterprise services) are recognized over time as customers receive and consume the benefits of such services. For revenues recognized over time, the company generally uses costs accumulated relative to total estimated costs to measure progress as this method approximates satisfaction of the performance obligation. For contracts that contain multiple performance obligations, the company allocates the consideration to which it expects to be entitled (i.e., the transaction price) to each performance obligation based on relative standalone selling prices and recognizes the related revenues when or as control of each individual performance obligation is transferred to customers. The company exercises judgment in determining the timing of revenue by analyzing the point in time or the period over which the customer has the ability to direct the use of and obtain substantially all of the remaining benefits of the asset. The company immediately expenses contract costs that would otherwise be capitalized and amortized over a period of less than one year. Changes to the scope of services contracts generally also include changes in the transaction price. Typically, these contract modifications are not distinct from existing services provided under the contract, and result in cumulative adjustments to revenue on the modification date. However, some modifications are distinct from existing services provided under the contract and recognized prospectively. Payments from customers for most instruments and consumables are typically due in a fixed number of days after shipment or delivery of the product. Service arrangements commonly call for payments in advance of performing the work (e.g., extended service contracts), upon completion of the service (e.g., pharmaceutical services) or a mix of both. Some arrangements include variable amounts of consideration that arise from discounts, rebates, and other programs and practices. In such arrangements, the company estimates the amount by which to reduce the stated contract amount to reflect the transaction price. The company records reimbursement for third-party pass-through and out-of-pocket costs as revenues and the related expenses as costs of revenues. Research and Development The company conducts research and development activities to increase its depth of capabilities in technologies, software and services. Research and development costs include employee compensation and benefits, consultants, facilities related costs, material costs, depreciation and travel. Research and development costs are expensed as incurred. Restructuring Costs 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. 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 provide economic benefits to the company. These include costs that represent amounts under contractual obligations that exist prior to the restructuring plan communication date and will either continue after the restructuring plan is completed with no economic benefit or result in a penalty to cancel a contractual obligation. Such costs are recognized when incurred, which generally occurs at the contract termination or over the period from when a plan to abandon a leased facility is approved through the cease-use date but charges may continue over the remainder of the original contractual period (Note 6). 41 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Foreign Currency Transactions Foreign currency-denominated monetary assets and liabilities are measured at the end of each reporting period using the exchange rates at that date. The resulting foreign currency transaction gains/(losses) are classified in cost of product revenue or cost of service revenue if the transaction relates to an operating activity. All other foreign currency transaction gains/(losses) are generally classified in other income/(expense). Accounting for financial instruments designated as net investment hedges is discussed below. Earnings per Share Basic earnings per share has been computed by dividing net income attributable to Thermo Fisher Scientific Inc. by the weighted average number of shares outstanding during the year. Except where the result would be antidilutive to net income attributable to Thermo Fisher Scientific Inc., diluted earnings per share has been computed using the treasury stock method for outstanding stock options and restricted units (Note 6). Income Taxes The company recognizes deferred income taxes based on the expected future tax consequences of differences between the financial statement basis and the tax basis of assets and liabilities, calculated using enacted tax rates in effect for the year in which the differences are expected to be reflected in the tax return. A valuation allowance is provided for tax assets that will more likely than not go unused. In situations in which the company has been able to determine that its deferred tax assets will be realized, that determination generally relies on future reversals of taxable temporary differences or expected future taxable income. The financial statements reflect expected future tax consequences of uncertain tax positions that the company has taken or expects to take on a tax return presuming the taxing authorities’ full knowledge of the positions and all relevant facts, but without discounting for the time value of money (Note 7). Derivative Contracts The company is exposed to certain risks relating to its ongoing business operations including changes to interest rates and currency exchange rates. The company uses derivative instruments primarily to manage currency exchange and interest rate risks. The company recognizes derivative instruments as either assets or liabilities and measures those instruments at fair value. If a derivative is a hedge, depending on the nature of the hedge, changes in the fair value of the derivative are either offset against the change in fair value of the hedged item through earnings or recognized in other comprehensive income/(loss) until the hedged item is recognized in earnings. Derivatives that are not designated as hedges are recorded at fair value through earnings together with the corresponding, offsetting gains/(losses) on the underlying hedged transactions. 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, Canadian dollars, British pounds sterling, Swiss franc, Swedish krona, Singapore dollars, and Hong Kong dollars. The company does not hold or engage in transactions involving derivative instruments for purposes other than risk management. Cash flow hedges . For derivative instruments that are designated and qualify as a cash flow hedge, the gain or loss on the derivative is reported as a component of other comprehensive income/(loss) and reclassified into earnings in the same period or periods during which the hedged transaction affects earnings and is presented in the same income statement line item as the earnings effect of the hedged item. Net investment hedges. 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 cumulative translation adjustment within other comprehensive income/(loss) and shareholders’ equity. The fair value of the cross-currency interest rate swaps is included in the accompanying balance sheets under the caption other current assets, other assets, other current liabilities, or other long-term liabilities. The fair value of the currency exchange contracts is included in the accompanying balance sheets under the captions other current assets or other accrued expenses. (Notes 4 and 10). 42 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Leases Operating leases that have commenced are included in other assets, other accrued expenses and other long-term liabilities in the consolidated balance sheet. Finance leases that have commenced are included in property, plant and equipment, net, current maturities of long-term obligations and long-term obligations in the consolidated balance sheet. Classification of lease liabilities as either current or noncurrent is based on the expected timing of payments due under the company’s obligations. Right-of-use (ROU) assets represent the company’s right to use an underlying asset for the lease term and lease liabilities represent the company’s obligation to make lease payments arising from the lease. Lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The company recognizes operating lease expense on a straight-line basis over the lease term. Finance lease expense includes depreciation, which is recognized on a straight-line basis over the expected life of the leased asset, and an immaterial amount of interest expense. Because most of the company’s leases do not provide an implicit interest rate, the company estimates incremental borrowing rates based on the information available at the commencement date in determining the present value of lease payments. The company uses the implicit rate when readily determinable. Lease terms include the effect of options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. As a lessee, the company accounts for the lease and non-lease components as a single lease component (Note 13). Pension and Other Postretirement Benefit Plans The company recognizes the funded status of defined benefit pension and other postretirement benefit plans as an asset or liability. This amount is defined as the difference between the fair value of plan assets and the benefit obligation. The company is required to recognize as a component of other comprehensive income/(loss), net of tax, the actuarial gains/losses and prior service costs/credits that arise but were not previously required to be recognized as components of net periodic benefit cost/(income). Other comprehensive income/(loss) is adjusted as these amounts are later recognized in income as components of net periodic benefit cost/(income). When a company with a pension plan is acquired, any excess of projected benefit obligation over the plan assets is recognized as a liability and any excess of plan assets over the projected benefit obligation is recognized as an asset. The recognition of a new liability or a new asset results in the elimination of (a) previously existing unrecognized net gain or loss and (b) unrecognized prior service cost or credits. The company funds annually, at a minimum, the statutorily required minimum amount as actuarially determined. The discount rate used to determine projected benefit obligations and net periodic pension benefit cost/(income) reflects the rate the company would have to pay to purchase high-quality investments that would provide cash sufficient to settle its current pension obligations. The discount rate is determined based on a range of factors, including the rates of return on high-quality, fixed-income corporate bonds and the related expected duration of the obligations or, in certain instances, the company has used a hypothetical portfolio of high quality instruments with maturities that mirror the benefit obligation in order to accurately estimate the discount rate relevant to a particular plan. The company utilizes a full yield curve approach in the estimation of these components by applying the specific spot-rates along the yield curve used in the determination of the benefit obligation to the relevant projected cash flows. The expected long-term rate of return on plan assets used to determine net periodic pension benefit cost/(income) reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for the benefits included in the projected benefit obligations. In determining the expected long-term rate of return on plan assets, the company considers the relative weighting of plan assets, the historical performance of total plan assets and individual asset classes and economic and other indicators of future performance. In addition, the company may consult with and consider the opinions of financial and other professionals in developing appropriate return benchmarks. Asset management objectives include maintaining an adequate level of diversification to reduce interest rate and market risk and providing adequate liquidity to meet immediate and future benefit payment requirements. The expected rate of compensation increase used to determine net periodic pension benefit cost/(income) reflects the long-term average rate of salary increases and is based on historic salary increase experience and management’s expectations of future salary increases (Note 14). 43 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Stock-based Compensation Expense Compensation cost is based on the grant-date fair value and is recognized ratably over the requisite vesting period or to the date based on qualifying retirement eligibility, if earlier, and is primarily included in selling, general and administrative expenses. The company’s practice is to grant stock options at fair market value. Options vest over 3 - 5 years with terms of 7 - 10 years, assuming continued employment with certain exceptions. Vesting of the option awards is contingent upon meeting certain service conditions. The fair value of most option grants is estimated using the Black-Scholes option pricing model. For option grants that require the achievement of both service and market conditions, a lattice model is used to estimate fair value. The fair value is then amortized on a straight-line basis over the requisite service periods of the awards, which is generally the vesting period. Use of a valuation model requires management to make certain assumptions with respect to selected model inputs. Expected volatility is calculated based on the historical volatility of the company’s stock. Historical data on exercise patterns, where available, are the bases for estimating the expected life of an option. The risk-free interest rate is based on U.S. Treasury zero-coupon issues with a remaining term which approximates the expected life assumed at the date of grant. The expected annual dividend rate is calculated by dividing the company’s annual dividend, based on the most recent quarterly dividend rate, by the closing stock price on the grant date. The compensation expense recognized for all stock-based awards is net of estimated forfeitures. Forfeitures are estimated based on an analysis of actual option forfeitures. Awards of restricted units convert into an equivalent number of shares of common stock. The awards generally vest over 3 - 4 years, assuming continued employment, with some exceptions. Vesting of the awards is contingent upon meeting certain service conditions and may also be contingent upon meeting certain performance and/or market conditions. The fair market value of the award at the time of the grant is amortized to expense over the requisite service period of the award, which is generally the vesting period. Recipients of restricted units have no voting rights but are entitled to accrue dividend equivalents. The fair value of service- and performance-based restricted unit awards is determined based on the number of units granted and the market value of the company’s shares on the grant date. For awards with market-based vesting conditions, the company uses a lattice model to estimate the grant-date fair value of the award (Note 15). 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 years ended December 31, 2025, 2024 and 2023. Recent Accounting Pronouncements The following table provides a description of recent accounting pronouncements adopted and those standards not yet adopted with potential for a material impact on the company's financial statements or disclosures. Standard Description Adoption timing and approach Impact of adoption or other significant matters Standards recently adopted ASU No. 2022-04, Liabilities–Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations New guidance 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 supplier finance programs for each period presented. Some aspects adopted in 2023 using a retrospective method and other aspects adopted in 2024 using a prospective method Not material ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures Among other things, new guidance to disclose additional information about the tax rate reconciliation and income taxes paid. 2025 annual report and interim periods thereafter using a prospective method Increased disclosures in Notes 7 and 9 Standards not yet adopted ASU No. 2024-03, Income Statement–Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses New guidance to disclose specified information about certain costs and expenses. 2027 annual report and interim periods thereafter using a prospective or retrospective method Will increase disclosures in Note 6 44 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Standard Description Adoption timing and approach Impact of adoption or other significant matters ASU No. 2025-06, Intangibles–Goodwill and Other–Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software Among other things, new guidance to modernize the accounting for costs to develop software for internal use. 2028 annual report and interim periods thereafter using a prospective, retrospective, or modified transition method; early adoption is permitted. Currently evaluating adoption impact, timing, and method ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities Among other things, establishes guidance for the recognition, measurement, and presentation of government grants. 2029 using a retrospective, modified retrospective, or modified prospective approach; early adoption is permitted. Currently evaluating adoption impact, timing, and method Note 2. Supplemental Balance Sheet Information Inventories The components of inventories are as follows: (In millions) December 31, 2025 December 31, 2024 Raw materials $ 1,877 $ 1,803 Work in process 889 755 Finished goods 2,659 2,420 Inventories $ 5,425 $ 4,978 Contract-related Balances Contract asset and liability balances are as follows: (In millions) December 31, 2025 December 31, 2024 Current contract assets, net $ 1,666 $ 1,435 Noncurrent contract assets, net 1 6 Current contract liabilities 2,710 2,852 Noncurrent contract liabilities 1,183 1,138 Substantially all of the current contract liability balances at December 31, 2024 and 2023 was recognized in revenues during 2025 and 2024, respectively. Remaining Performance Obligations The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of December 31, 2025 was $ 27.92 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 . Amounts expected to occur thereafter generally relate to contract manufacturing, clinical research and extended warranty service agreements, which typically have durations of three to five years . Property, Plant and Equipment Property, plant and equipment consists of the following: (In millions) December 31, 2025 December 31, 2024 Land $ 500 $ 439 Buildings and improvements 4,570 3,728 Machinery, equipment and leasehold improvements 11,005 9,858 Construction in progress 2,305 2,034 Property, plant and equipment, at cost 18,380 16,059 Less: Accumulated depreciation and amortization 7,815 6,753 Property, plant and equipment, net $ 10,565 $ 9,306 45 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Acquisition-related Intangible Assets Acquisition-related intangible assets are as follows: Balance at December 31, 2025 Balance at December 31, 2024 (In millions) Gross Accumulated Amortization Net Gross Accumulated Amortization Net Definite lived: Customer relationships $ 23,290 $ ( 10,515 ) $ 12,775 $ 22,644 $ ( 10,047 ) $ 12,596 Product technology 5,196 ( 3,891 ) 1,305 5,557 ( 4,423 ) 1,134 Trade names 1,804 ( 1,318 ) 486 1,706 ( 1,180 ) 527 Backlog 1,084 ( 1,047 ) 37 1,084 ( 1,043 ) 41 31,374 ( 16,771 ) 14,604 30,991 ( 16,693 ) 14,298 Indefinite lived: Trade names 1,235 N/A 1,235 1,235 N/A 1,235 Acquisition-related intangible assets $ 32,609 $ ( 16,771 ) $ 15,838 $ 32,226 $ ( 16,693 ) $ 15,533 The estimated future amortization expense of acquisition-related intangible assets with definite lives as of December 31, 2025 is as follows: (In millions) 2026 $ 1,638 2027 1,608 2028 1,573 2029 1,457 2030 1,160 2031 and thereafter 7,169 Estimated future amortization expense of definite-lived intangible assets $ 14,604 At December 31, 2025 and 2024, the company had $ 21 million and $ 34 million, respectively, of intangible assets not derived from acquisitions, net of accumulated amortization, which are being amortized using the straight-line method over their estimated useful lives, which range up to 20 years. Other Assets At December 31, 2025 and 2024, the company had equity method investments with carrying amounts of $ 178 million and $ 357 million, respectively. At December 31, 2025 and 2024, the company’s equity investments that do not have readily determinable fair values and are not eligible for the NAV practical expedient investments had carrying amounts of $ 196 million and $ 41 million, respectively. Investments measured at NAV were $ 64 million and $ 40 million at December 31, 2025 and 2024, respectively. Goodwill The changes in the carrying amount of goodwill by segment are as follows: (In millions) Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Total Balance at December 31, 2023 $ 10,151 $ 5,051 $ 4,923 $ 23,895 $ 44,020 Acquisitions 2,302 — — — 2,302 Currency translation ( 117 ) ( 92 ) ( 139 ) ( 122 ) ( 470 ) Balance at December 31, 2024 12,336 4,959 4,784 23,773 45,853 Acquisitions 2,101 — — 15 2,117 Currency translation 473 184 292 444 1,393 Balance at December 31, 2025 $ 14,910 $ 5,143 $ 5,076 $ 24,232 $ 49,362 46 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 3. Debt and Other Financing Arrangements The company’s debt and other financing arrangements are as follows: Effective interest rate at December 31, December 31, December 31, (Dollars in millions) 2025 2025 2024 0.125 % 5.5 -Year Senior Notes, Due 3/1/2025 (euro-denominated) $ — $ 828 2.00 % 10 -Year Senior Notes, Due 4/15/2025 (euro-denominated) — 663 0.853 % 3 -Year Senior Notes, Due 10/20/2025 (Japanese yen-denominated) — 142 0.000 % 4 -Year Senior Notes Due 11/18/2025 (euro-denominated) — 569 3.20 % 3 -Year Senior Notes, Due 1/21/2026 (euro-denominated) 3.18 % 587 518 1.40 % 8.5 -Year Senior Notes, Due 1/23/2026 (euro-denominated) 1.45 % 822 725 4.953 % 3 -Year Senior Notes, Due 8/10/2026 5.18 % 600 600 0.832 % 1.5 -Year Senior Notes, Due 9/7/2026 (Swiss franc-denominated) 1.14 % 517 — 5.000 % 3 -Year Senior Notes, Due 12/5/2026 5.25 % 1,000 1,000 1.45 % 10 -Year Senior Notes, Due 3/16/2027 (euro-denominated) 1.66 % 587 518 1.75 % 7 -Year Senior Notes, Due 4/15/2027 (euro-denominated) 1.97 % 705 621 1.054 % 5 -Year Senior Notes, Due 10/20/2027 (Japanese yen-denominated) 1.18 % 184 184 4.80 % 5 -Year Senior Notes, Due 11/21/2027 5.00 % 600 600 Floating Rate (EURIBOR + 0.280 %) 2 -Year Senior Notes, Due 12/1/2027 (euro-denominated) 2.58 % 1,175 — 0.790 % 3 -Year Senior Notes, Due 1/6/2028 (Swiss franc-denominated) 1.35 % 111 — 0.50 % 8.5 -Year Senior Notes, Due 3/1/2028 (euro-denominated) 0.78 % 940 828 1.6525 % 4 -Year Senior Notes, Due 3/7/2028 (Swiss franc-denominated) 1.79 % 416 364 0.77 % 5 -Year Senior Notes, Due 9/6/2028 (Japanese yen-denominated) 0.90 % 185 184 1.375 % 12 -Year Senior Notes, Due 9/12/2028 (euro-denominated) 1.46 % 705 621 1.750 % 7 -Year Senior Notes, Due 10/15/2028 1.89 % 700 700 5.000 % 5 -Year Senior Notes Due 1/31/2029 5.24 % 1,000 1,000 1.125 % 4 -Year Senior Notes, Due 3/7/2029 (Swiss franc-denominated) 1.26 % 397 — 1.95 % 12 -Year Senior Notes, Due 7/24/2029 (euro-denominated) 2.08 % 822 725 2.60 % 10 -Year Senior Notes, Due 10/1/2029 2.74 % 900 900 1.279 % 7 -Year Senior Notes, Due 10/19/2029 (Japanese yen-denominated) 1.44 % 30 30 1.120 % 5 -Year Senior Notes, Due 1/6/2030 (Swiss franc-denominated) 1.25 % 295 — 4.977 % 7 -Year Senior Notes, Due 8/10/2030 5.12 % 750 750 0.80 % 9 -Year Senior Notes, Due 10/18/2030 (euro-denominated) 0.89 % 2,056 1,812 4.200 % 5.5 -Year Senior Notes Due 3/1/2031 4.41 % 500 — 0.875 % 12 -Year Senior Notes, Due 10/1/2031 (euro-denominated) 1.14 % 1,057 932 2.00 % 10 -Year Senior Notes, Due 10/15/2031 2.23 % 1,200 1,200 1.8401 % 8 -Year Senior Notes, Due 3/8/2032 (Swiss franc-denominated) 1.92 % 524 457 2.375 % 12 -Year Senior Notes, Due 4/15/2032 (euro-denominated) 2.55 % 705 621 4.473 % 7 -Year Senior Notes, Due 10/7/2032 4.62 % 750 — 1.49 % 10 -Year Senior Notes, Due 10/20/2032 (Japanese yen-denominated) 1.60 % 40 40 4.95 % 10 -Year Senior Notes, Due 11/21/2032 5.09 % 600 600 1.4175 % 8 -Year Senior Notes, Due 3/7/2033 (Swiss franc-denominated) 1.49 % 442 — 5.086 % 10 -Year Senior Notes, Due 8/10/2033 5.20 % 1,000 1,000 1.125 % 12 -Year Senior Notes, Due 10/18/2033 (euro-denominated) 1.21 % 1,762 1,553 5.200 % 10 -Year Senior Notes, Due 1/31/2034 5.34 % 500 500 3.65 % 12 -Year Senior Notes, Due 11/21/2034 (euro-denominated) 3.76 % 881 777 1.50 % 12 -Year Senior Notes, Due 9/6/2035 (Japanese yen-denominated) 1.58 % 137 137 4.794 % 10 -Year Senior Notes, Due 10/7/2035 4.91 % 750 — 3.628 % 10 -Year Senior Notes, Due 12/1/2035 (euro-denominated) 3.70 % 1,292 — 2.0375 % 12 -Year Senior Notes, Due 3/7/2036 (Swiss franc-denominated) 2.10 % 410 358 1.520 % 12 -Year Senior Notes, Due 1/6/2037 (Swiss franc-denominated) 1.56 % 392 — 47 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Effective interest rate at December 31, December 31, December 31, (Dollars in millions) 2025 2025 2024 1.6524 % 12 -Year Senior Notes, Due 3/6/2037 (Swiss franc-denominated) 1.71 % 271 — 2.875 % 20 -Year Senior Notes, Due 7/24/2037 (euro-denominated) 2.94 % 822 725 4.894 % 12 -Year Senior Notes, Due 10/7/2037 5.00 % 500 — 1.50 % 20 -Year Senior Notes, Due 10/1/2039 (euro-denominated) 1.73 % 1,057 932 2.80 % 20 -Year Senior Notes, Due 10/15/2041 2.90 % 1,200 1,200 1.625 % 20 -Year Senior Notes, Due 10/18/2041 (euro-denominated) 1.78 % 1,468 1,294 2.069 % 20 -Year Senior Notes, Due 10/20/2042 (Japanese yen-denominated) 2.13 % 93 93 5.404 % 20 -Year Senior Notes, Due 8/10/2043 5.50 % 600 600 2.02 % 20 -Year Senior Notes, Due 9/6/2043 (Japanese yen-denominated) 2.06 % 185 184 5.30 % 30 -Year Senior Notes, Due 2/1/2044 5.37 % 400 400 1.49 % 20 -Year Senior Notes, Due 1/6/2045 (Swiss franc-denominated) 1.54 % 233 — 1.8975 % 20 -Year Senior Notes, Due 3/7/2045 (Swiss franc-denominated) 1.95 % 170 — 4.10 % 30 -Year Senior Notes, Due 8/15/2047 4.23 % 750 750 1.875 % 30 -Year Senior Notes, Due 10/1/2049 (euro-denominated) 1.99 % 1,175 1,035 1.47 % 25 -Year Senior Notes, Due 1/6/2050 (Swiss franc-denominated) 1.49 % 413 — 2.00 % 30 -Year Senior Notes, Due 10/18/2051 (euro-denominated) 2.07 % 881 777 2.382 % 30 -Year Senior Notes, Due 10/18/2052 (Japanese yen-denominated) 2.43 % 212 212 Other 1 73 Total borrowings at par value 39,459 31,332 Unamortized discount ( 94 ) ( 95 ) Unamortized debt issuance costs ( 194 ) ( 164 ) Total borrowings at carrying value 39,172 31,072 Finance lease liabilities 213 202 Less: Short-term obligations and current maturities 3,533 2,214 Long-term obligations $ 35,852 $ 29,061 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 discounts/premiums and the amortization of any debt issuance costs. See Note 4 for fair value information pertaining to the company’s long-term borrowings. As of December 31, 2025, the annual repayment requirements for debt obligations are as follows: (In millions) Borrowings Finance Lease Liabilities 2026 $ 3,528 $ 9 2027 3,254 8 2028 3,057 8 2029 3,150 9 2030 3,105 10 2031 and thereafter 23,366 170 $ 39,459 $ 213 In addition to available borrowings under the company’s revolving credit agreements, discussed below, the company had unused lines of credit of $ 73 million as of December 31, 2025. These unused lines of credit generally provide for short-term unsecured borrowings at various interest rates. Credit Facilities 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, 2028. The revolving credit agreement calls for interest at either a Term Secured Overnight Financing Rate (SOFR), EURIBOR-based rate (for funds drawn in euro), or a rate based on 48 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. 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 Net Interest Coverage Ratio of 3.5 :1.0 as of the last day of any fiscal quarter. As of December 31, 2025, no borrowings were outstanding under the Facility, although available capacity was reduced by immaterial outstanding letters of credit. Commercial Paper Programs The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. 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. Senior Notes Interest is payable annually on the euro and public Swiss franc-denominated fixed rate senior notes and semi-annually on all other senior notes. Each of the U.S. dollar and euro-denominated fixed rate senior notes, and Japanese yen-denominated and Swiss franc-denominated private placement notes may be redeemed at a redemption price of 100 % of the principal amount plus a specified make-whole premium and accrued interest, together with swap breakage costs payable to holders of the Japanese yen-denominated and Swiss franc-denominated private placement notes who have entered into cross-currency swap agreements. 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 December 31, 2025. 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 December 31, 2025, included in the table above (collectively, the “Euronotes”) in registered public offerings: the Floating Rate Senior Notes due 2027, the 0.80 % Senior Notes due 2030, the 1.125 % Senior Notes due 2033, the 3.628 % Senior Notes due 2035, the 1.625 % Senior Notes due 2041, and the 2.00 % Senior Notes due 2051. The company has fully and unconditionally guaranteed all of Thermo Fisher International’s obligations under the Euronotes and all of Thermo Fisher International’s other debt securities, and no other subsidiary of the company will guarantee these obligations. Thermo Fisher International is a “finance subsidiary” as defined in Rule 13-01(a)(4)(vi) of the Exchange Act, with no assets or operations other than those related to the issuance, administration and repayment of the Euronotes and other debt securities issued by Thermo Fisher International from time to time. The financial condition, results of operations and cash flows of Thermo Fisher International are consolidated in the financial statements of the company. February 2026 Debt Issuances In the first quarter of 2026 the company issued the following senior notes: (In millions) Principal value issued 4.215 % 5 -Year Senior Notes, Due 2/12/2031 $ 1,000 4.550 % 7.3 -Year Senior Notes, Due 6/15/2033 750 4.902 % 10 -Year Senior Notes, Due 2/12/2036 1,300 5.546 % 20 -Year Senior Notes, Due 2/12/2046 750 Note 4. Fair Value Measurements Fair Value Measurements The company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2025. The company’s financial assets and liabilities carried at fair value are primarily comprised of investments in bank time deposits, publicly traded securities, insurance contracts, investments in derivative contracts, mutual funds holding publicly traded securities and other investments in unit trusts held as assets to satisfy outstanding deferred compensation and retirement liabilities; and acquisition-related contingent consideration. 49 THERMO FISHER SCIENTIFIC INC. 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: December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs (In millions) 2025 (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 6,907 $ 6,907 $ — $ — Bank time deposits 250 250 — — Investments 103 27 — 76 Insurance contracts 280 — 280 — Derivative contracts 685 — 685 — Contingent consideration 67 — — 67 Total assets $ 8,292 $ 7,184 $ 966 $ 143 Liabilities Derivative contracts $ 506 $ — $ 506 $ — Contingent consideration 16 — — 16 Total liabilities $ 522 $ — $ 506 $ 16 December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs (In millions) 2024 (Level 1) (Level 2) (Level 3) Assets Cash equivalents $ 1,103 $ 1,103 $ — $ — Bank time deposits 1,560 1,560 — — Investments 39 18 — 21 Insurance contracts 240 — 240 — Derivative contracts 460 — 460 — Total assets $ 3,401 $ 2,680 $ 700 $ 21 Liabilities Derivative contracts $ 59 $ — $ 59 $ — Contingent consideration 13 — — 13 Total liabilities $ 72 $ — $ 59 $ 13 The following table provides a rollforward of investments classified as level 3: (In millions) 2025 2024 Investments Beginning balance $ 21 $ — Purchases 55 21 Ending balance $ 76 $ 21 The following table provides a rollforward of the fair value, as determined by level 3 inputs (such as likelihood of a qualifying transaction), of the contingent consideration asset: (In millions) 2025 Contingent consideration asset Beginning balance $ — Acquisition 66 Changes in fair value included in earnings 1 Ending balance $ 67 50 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 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 liabilities. (In millions) 2025 2024 Contingent consideration liabilities Beginning balance $ 13 $ 87 Acquisitions (including assumed balances) 3 — Payments ( 6 ) ( 2 ) Changes in fair value included in earnings 7 ( 73 ) Ending balance $ 16 $ 13 Fair Value of Other Financial Instruments The carrying value and fair value of the company’s debt instruments are as follows: December 31, 2025 December 31, 2024 (In millions) Carrying value Fair value Carrying value Fair value Senior notes $ 39,171 $ 36,606 $ 30,999 $ 28,454 Other 1 1 73 73 $ 39,172 $ 36,607 $ 31,072 $ 28,527 The fair value of debt instruments, excluding private placement notes, 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. The fair value of private placement notes was determined based on internally developed pricing models and unobservable inputs, which represent level 3 measurements. Note 5. Commitments and Contingencies Purchase Obligations The company has entered into unconditional purchase obligations, in the ordinary course of business, that include agreements to purchase goods, services or fixed assets and to pay royalties that are enforceable and legally binding and that specify all significant terms including: fixed or minimum quantities to be purchased; fixed, minimum or variable price provisions; and the approximate timing of the transaction. Purchase obligations exclude agreements that are cancelable at any time without penalty. The aggregate amount of the company’s unconditional purchase obligations totaled $ 1.98 billion at December 31, 2025, the majority of which are expected to be settled during 2026. Letters of Credit, Guarantees and Other Commitments Outstanding letters of credit and bank guarantees totaled $ 379 million at December 31, 2025. Substantially all of these letters of credit and guarantees expire through 2039. Outstanding surety bonds and other guarantees totaled $ 175 million at December 31, 2025. The expiration of these bonds and guarantees ranges through 2030. The letters of credit, bank guarantees and surety bonds principally secure performance obligations, and allow the holder to draw funds up to the face amount of the letter of credit, bank guarantee or surety bond if the applicable business unit does not perform as contractually required. The company has funding commitments totaling $ 162 million at December 31, 2025, related to investments. The company is a guarantor of pension plan obligations of a divested business. The purchaser of the divested business has agreed to pay for the pension benefits; however, the company was required to guarantee payment of these pension benefits should the purchaser fail to do so. The amount of the guarantee at December 31, 2025 was $ 24 million. In connection with the sale of businesses of the company, the buyers have assumed certain contractual obligations of such businesses and have agreed to indemnify the company with respect to those assumed liabilities. In the event a third-party to a transferred contract does not recognize the transfer of obligations or a buyer defaults on its obligations under the transferred contract, the company could be liable to the third-party for such obligations. However, in such event, the company would be entitled to seek indemnification from the buyer. 51 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Indemnifications In conjunction with certain transactions, primarily divestitures, the company has agreed to indemnify the other parties with respect to certain liabilities related to the businesses that were sold or leased properties that were abandoned (e.g., retention of certain environmental, tax, employee and product liabilities). The scope and duration of such indemnity obligations vary from transaction to transaction. Where probable, an obligation for such indemnifications is recorded as a liability. Generally, a 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. In connection with the company’s efforts to reduce the number of facilities that it occupies, the company has vacated some of its leased facilities or sublet them to third parties. When the company sublets a facility to a third-party, it remains the primary obligor under the master lease agreement with the owner of the facility. As a result, if a third-party vacates the sublet facility, the company would be obligated to make lease or other payments under the master lease agreement. The company believes that the financial risk of default by sublessors is individually and in the aggregate not material to the company’s financial position or results of operations. In connection with the sale of products in the ordinary course of business, the company often makes representations affirming, among other things, that its products do not infringe on the intellectual property rights of others and agrees to indemnify customers against third-party claims for such infringement. The company has not been required to make material payments under such provisions. Environmental Matters The company is currently involved in various stages of investigation and remediation related to environmental matters. The company cannot predict all potential costs related to environmental remediation matters and the possible impact on future operations given the uncertainties regarding the extent of the required cleanup, the complexity and interpretation of applicable laws and regulations, the varying costs of alternative cleanup methods and the extent of the company’s responsibility. 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 December 31, 2025 , the company’s total environmental liability was approximately $ 86 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 and cash flows. Litigation and Related Contingencies The company is involved in various disputes, governmental and/or regulatory inspections, inquiries, investigations and proceedings, and litigation matters that arise from time to time in the ordinary course of business. The disputes and litigation matters include product liability, intellectual property, employment and commercial issues. Due to the inherent uncertainties associated with pending litigation or claims, the company cannot predict the outcome, nor, with respect to certain pending litigation or claims where no liability has been accrued, make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. The company has no material accruals for pending litigation or claims for which accrual amounts are not disclosed below, nor are material losses deemed probable for such matters. It is reasonably possible, however, that an unfavorable outcome that exceeds the company’s current accrual estimate, if any, for one or more of the matters described below could have a material adverse effect on the company’s results of operations, financial position and cash flows. Product Liability, Workers Compensation and Other Personal Injury Matters 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, 2025, was approximately $ 218 million to $ 376 million. The company’s accrual for these matters totaled $ 223 million at December 31, 2025. The accrual includes estimated defense costs and is gross of estimated amounts due from insurers of $ 81 million at December 31, 2025 that are included in other assets in the accompanying balance sheet. In addition, as of December 31, 2025, the company had a product liability accrual of $ 19 million relating to divested businesses. Although the company believes that the amounts accrued and estimated 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 52 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) adverse effect on the company’s results of operations, financial position, and cash flows. Insurance contracts do not relieve the company of its primary obligation with respect to any losses incurred. The collectability of amounts due from its insurers is subject to the solvency and willingness of the insurer to pay, as well as the legal sufficiency of the insurance claims. Management monitors the payment history as well as the financial condition and ratings of its insurers on an ongoing basis. Note 6. Supplemental Income Statement Information Disaggregated Revenues Revenues by type are as follows: (In millions) 2025 2024 2023 Revenues Consumables $ 18,664 $ 17,587 $ 17,597 Instruments 7,301 7,446 7,646 Services 18,592 17,845 17,614 Consolidated revenues $ 44,556 $ 42,879 $ 42,857 Revenues by geographic region based on customer location are as follows: (In millions) 2025 2024 2023 Revenues North America $ 23,033 $ 22,504 $ 22,764 Europe 11,826 10,857 10,741 Asia-Pacific 8,101 7,956 7,873 Other regions 1,597 1,561 1,479 Consolidated revenues $ 44,556 $ 42,879 $ 42,857 Each reportable segment earns revenues from consumables, instruments and services in North America, Europe, Asia-Pacific and other regions. See Note 11 for revenues by reportable segment and other geographic data. Revenues by business are as follows: (In millions) 2025 2024 2023 Revenues Biosciences $ 4,169 $ 4,192 $ 4,238 Genetic sciences 2,870 2,787 2,816 BioProduction 3,200 2,652 2,923 Other 136 — 1 Life Sciences Solutions 10,374 9,631 9,977 Chromatography and mass spectrometry 3,360 3,278 3,329 Chemical analysis 1,237 1,315 1,371 Electron microscopy 2,957 2,870 2,564 Analytical Instruments 7,554 7,463 7,263 Clinical diagnostics 1,115 1,063 1,104 ImmunoDiagnostics 912 864 802 Microbiology 645 633 618 Transplant diagnostics 492 454 393 Healthcare market channel 1,788 1,764 1,712 Elimination of intrasegment revenues and other ( 275 ) ( 266 ) ( 222 ) Specialty Diagnostics 4,676 4,512 4,405 Laboratory products 2,407 2,525 2,613 Research and safety market channel 7,440 7,019 6,841 Pharma services 7,142 6,685 6,806 Clinical research 7,915 7,836 7,691 Elimination of intrasegment revenues and other ( 920 ) ( 907 ) ( 910 ) Laboratory Products and Biopharma Services 23,984 23,157 23,041 Elimination of intersegment revenues ( 2,033 ) ( 1,885 ) ( 1,829 ) Consolidated revenues $ 44,556 $ 42,879 $ 42,857 53 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Restructuring and Other Costs Restructuring and other costs in 2025 primarily included continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, net charges for disposition of a consolidated joint venture, impairments of long-lived assets, and, to a lesser extent, net charges for pre-acquisition litigation and other matters. In 2025, severance actions associated with facility consolidations and cost reduction measures affected approximately 5 % of the company’s workforce. Restructuring and other costs in 2024 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 2 % of the company’s workforce. Restructuring and other costs in 2023 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 5 % of the company’s workforce. As of February 26, 2026, the company has identified restructuring actions, primarily in the Laboratory Products and Biopharma Services, Life Sciences Solutions, and Analytical Instruments segments, that it expects will result in additional charges of approximately $ 250 million, primarily in 2026, and expects to identify additional actions in future periods. Restructuring and other costs by segment are as follows: (In millions) 2025 2024 2023 Life Sciences Solutions $ 154 $ 69 $ 105 Analytical Instruments 81 4 33 Specialty Diagnostics 10 17 11 Laboratory Products and Biopharma Services 147 280 295 Corporate ( 29 ) 9 15 $ 362 $ 379 $ 459 The following table summarizes the changes in the company’s accrued restructuring balance, which is included in other accrued expenses in the accompanying balance sheets. Other amounts reported as restructuring and other costs in the accompanying statements of income have been summarized in the notes to the table. (In millions) Total (a) Balance at December 31, 2022 $ 41 Net restructuring charges incurred in 2023 (b) (c) 194 Payments ( 175 ) Balance at December 31, 2023 60 Net restructuring charges incurred in 2024 (d) (e) 97 Payments ( 105 ) Currency translation and other ( 2 ) Balance at December 31, 2024 50 Net restructuring charges incurred in 2025 (f) 197 Payments ( 175 ) Currency translation and other ( 1 ) Balance at December 31, 2025 $ 70 (a) The movements in the restructuring liability principally consist of severance and other costs associated with facility consolidations. (b) Excludes $ 264 million of charges, principally $ 126 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 $ 19 million of net charges for pre-acquisition litigation and other matters in the Laboratory Products and Biopharma Services segment. (c) Excludes $ 93 million of charges in the Laboratory Products and Biopharma Services segment for impairments of a disposal group that was held for sale beginning in the third quarter of 2023. The loss attributable to Thermo Fisher Scientific Inc. was reduced by $ 46 million attributable to a noncontrolling interest. (d) Excludes $ 282 million of net charges, principally $ 211 million of charges for impairment of long-lived assets in the Laboratory Products and Biopharma Services and Life Sciences Solutions segments. 54 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) (e) Excludes $ 41 million of charges in the Laboratory Products and Biopharma Services segment for impairment of a disposal group that was held for sale beginning in the third quarter of 2023. The loss attributable to Thermo Fisher Scientific Inc. was reduced by $ 19 million attributable to a noncontrolling interest. (f) Excludes $ 165 million of net charges, principally $ 94 million of charges for impairments of long-lived assets in the Life Sciences Solutions and Laboratory Products and Biopharma Services segments, as well as $ 51 million of net charges for disposition of a consolidated joint venture. The company expects to pay accrued restructuring costs primarily through 2026. Earnings per Share The company’s earnings per share are as follows: (In millions except per share amounts) 2025 2024 2023 Net income attributable to Thermo Fisher Scientific Inc. $ 6,704 $ 6,335 $ 5,995 Basic weighted average shares 377 382 386 Plus effect of: stock options and restricted stock units 1 1 2 Diluted weighted average shares 378 383 388 Basic earnings per share $ 17.77 $ 16.58 $ 15.52 Diluted earnings per share $ 17.74 $ 16.53 $ 15.45 Antidilutive stock options excluded from diluted weighted average shares 3 2 2 Other Income/(Expense) In all periods, other income/(expense) includes currency transaction gains/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 statements of income. In 2025, 2024, and 2023 other income/(expense) includes $ 13 million, $ 21 million, and $( 46 ) million of net gains/(losses) on investments, respectively. In 2025, other income/(expense) includes $ 7 million of settlement charges for pension plans (Note 14). Foreign Currency Transactions The aggregate foreign currency transaction gains/(losses) included in the accompanying statements of income were $( 130 ) million, $ 0 million and $( 67 ) million in 2025, 2024 and 2023, respectively. Note 7. Income Taxes The components of income before provision for income taxes are as follows: (In millions) 2025 2024 2023 U.S. $ 2,608 $ 2,226 $ 2,431 Non-U.S. 4,700 4,812 3,867 Income before income taxes $ 7,308 $ 7,037 $ 6,298 The components of the provision for income taxes are as follows: (In millions) 2025 2024 2023 Current income tax provision Federal $ 402 $ 561 $ 228 Non-U.S. 658 1,175 1,206 State 126 130 150 1,186 1,866 1,584 Deferred income tax provision/(benefit) Federal $ ( 385 ) $ ( 1,026 ) $ ( 551 ) Non-U.S. ( 221 ) ( 72 ) ( 647 ) State ( 34 ) ( 111 ) ( 102 ) ( 639 ) ( 1,209 ) ( 1,300 ) Provision for/(benefit from) income taxes $ 547 $ 657 $ 284 55 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before income taxes due to the following: (Dollars in millions) 2025 U.S. federal statutory tax rate $ 1,535 21.0 % State and local income taxes, net of federal income tax effect (a) 68 0.9 % Foreign tax effects Malta Changes in valuation allowances 2,351 32.2 % Statutory tax rate difference between Malta and United States 473 6.5 % Deferred interest ( 2,351 ) ( 32.2 ) % Notional interest deduction ( 1,186 ) ( 16.2 ) % Other 19 0.3 % Netherlands Changes in valuation allowances 144 2.0 % Deferred interest ( 97 ) ( 1.3 ) % Other ( 27 ) ( 0.4 ) % United Kingdom Partnership income/(loss) ( 118 ) ( 1.6 ) % Foreign exchange 131 1.8 % Other ( 41 ) ( 0.6 ) % Other foreign jurisdictions 166 2.3 % Effect of changes in tax laws or rates enacted in the current period 12 0.2 % Effect of cross-border tax laws Foreign-derived intangible income ( 268 ) ( 3.7 ) % U.S. tax on branch income/(loss) 390 5.3 % Other 125 1.7 % Tax credits Foreign tax credits ( 181 ) ( 2.5 ) % Other ( 36 ) ( 0.5 ) % Changes in valuation allowances ( 157 ) ( 2.1 ) % Nontaxable or nondeductible items 1 0.0 % Changes in unrecognized tax benefits ( 64 ) ( 0.9 ) % Other adjustments Intra-entity transfer ( 133 ) ( 1.8 ) % Domestication transaction ( 240 ) ( 3.3 ) % Other 31 0.4 % Effective tax rate $ 547 7.5 % (a) State taxes in California, Massachusetts, Illinois, and Pennsylvania comprise the majority of the tax effect in this category. 56 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Under previous tax disclosure guidance, the provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before income taxes due to the following: (In millions) 2024 2023 Statutory federal income tax rate 21 % 21 % Provision for income taxes at statutory rate $ 1,478 $ 1,323 Increases (decreases) resulting from: Foreign rate differential ( 131 ) ( 223 ) Income tax credits ( 333 ) ( 276 ) Global intangible low-taxed income 57 113 Foreign-derived intangible income ( 133 ) ( 108 ) Excess tax benefits from stock options and restricted stock units ( 67 ) ( 69 ) Provision for (reversal of) tax reserves, net 218 13 Intra-entity transfers ( 106 ) ( 233 ) Foreign exchange loss on inter-company debt refinancing — ( 112 ) Provision for (reversal of) valuation allowances, net ( 229 ) ( 32 ) Withholding taxes 74 33 Tax return reassessments and settlements ( 192 ) ( 187 ) State income taxes, net of federal tax 66 70 Other, net ( 45 ) ( 28 ) Provision for/(benefit from) income taxes $ 657 $ 284 The company has operations and a taxable presence in approximately 70 countries outside the U.S. The company's effective income tax rate differs from the U.S. federal statutory rate each year due to certain operations that are subject to tax incentives, state and local taxes, nondeductible interest in certain foreign jurisdictions, and foreign taxes that are different than the U.S. federal statutory rate. During 2025, the company recorded tax benefits of $ 269 million and $ 153 million for domestication transactions and capital losses generated as part of intra-entity transactions, respectively, as well as $ 93 million of tax benefits related to tax return reassessments associated with the company’s foreign-derived intangible income. The company also recorded net tax benefits of $ 157 million, primarily in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income. During 2024, the company recorded a tax reserve and associated interest of $ 240 million related to the settlement of international tax audits for tax years 2009 through 2016, which were settled in 2024. The company also recorded tax benefits of $ 459 million, primarily in jurisdictions where the deferred tax assets are now expected to be realized due to forecasted income. The benefits were partially offset by tax provisions primarily associated with disallowed interest expense and net operating loss carryforwards that are not expected to be realized. During 2023, the company released valuation allowances of $ 32 million in jurisdictions where the deferred tax assets are now expected to be realized. In 2023, the company also recorded a tax benefit of $ 127 million for U.S. tax credits and the revaluation of net operating loss carryforwards due to higher tax rates as a result of its tax return resubmissions, a $ 91 million tax benefit, net of related tax expenses, from a foreign exchange loss on an intercompany debt refinancing transaction, and $ 233 million of tax benefits resulting from intra-entity transactions. 57 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Net deferred tax asset/(liability) in the accompanying balance sheets consists of the following: (In millions) 2025 2024 Deferred tax asset/(liability) Depreciation and amortization $ ( 4,304 ) $ ( 4,133 ) Net operating loss and credit carryforwards 3,662 2,915 Reserves and accruals 139 161 Accrued compensation 321 318 Inventory basis difference 293 309 Deferred interest 3,365 534 Research and development and other capitalized costs 372 536 Unrealized (gains) losses on hedging instruments 20 ( 363 ) Contract liabilities 289 280 Other, net ( 346 ) 147 Deferred tax assets/(liabilities), net before valuation allowance 3,811 705 Less: Valuation allowance 3,561 1,043 Deferred tax assets/(liabilities), net $ 249 $ ( 338 ) Prior to 2025, certain of the company’s non-U.S. attributes were determined to have a remote possibility of realization and therefore were not reported in the table above. In connection with the Organization for Economic Cooperation and Development global minimum tax initiative, Pillar Two, any existing deferred taxes not disclosed in the company’s 2025 financial statements will not be available in the future to reduce tax otherwise due under Pillar Two. Accordingly, beginning in 2025, the company is disclosing in the above table the tax effects of these non-US attributes offset with a full valuation allowance. The company estimates the degree to which tax assets, losses and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction and provides a valuation allowance for tax assets and loss and credit carryforwards that it believes will more likely than not expire unutilized. At December 31, 2025, all of the company’s valuation allowance relates to deferred tax assets, primarily net operating losses and disallowed interest expense carryforward, for which any subsequently recognized tax benefits will reduce income tax expense. The changes in the valuation allowance are as follows: Year Ended December 31, (In millions) 2025 2024 2023 Beginning balance $ 1,043 $ 1,317 $ 1,322 Additions/(reductions) recognized in income tax provision, net 2,455 ( 229 ) ( 32 ) Additions due to acquisitions — — 4 Currency translation and other 64 ( 46 ) 23 Ending balance $ 3,561 $ 1,043 $ 1,317 At December 31, 2025, the company had net federal, state and non-U.S. net operating loss carryforwards of $ 317 million, $ 72 million and $ 2.20 billion, respectively. Use of the carryforwards is limited based on the future income of certain subsidiaries. Of the federal net operating loss carryforwards, $ 38 million expire in the years 2026 through 2037, and the remainder do not expire. Of the state net operating loss carryforwards, $ 56 million expire in the years 2026 through 2044, and the remainder do not expire. Of the net non-U.S. net operating loss carryforwards, $ 1.04 billion expire in the years 2028 through 2045, and the remainder do not expire. At December 31, 2025, the company had foreign tax credit carryforwards of $ 554 million and deferred interest carryforwards of $ 3.36 billion. The foreign tax credit carryforwards will expire in the years 2026 through 2034. Of the deferred interest carryforwards, $ 301 million expire in the years 2026 through 2035 and the remainder do not expire. A provision has not been made for certain U.S. state income taxes or additional non-U.S. taxes that would be due when cash is repatriated to the U.S. as the company’s undistributed foreign earnings are intended to be reinvested outside of the U.S. indefinitely. The determination of the amount of the unrecognized deferred tax liability related to the undistributed foreign earnings is not practicable due to the uncertainty in the manner in which these earnings will be distributed. The company’s intent is to only make distributions from non-U.S. subsidiaries in the future when they can be made at no net tax cost. 58 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Unrecognized Tax Benefits As of December 31, 2025, the company had $ 0.42 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: (In millions) 2025 2024 2023 Beginning balance $ 525 $ 540 $ 572 Additions due to acquisitions — 19 — Additions for tax positions of current year 25 91 4 Additions for tax positions of prior years — 244 34 Reductions for tax positions of prior years ( 34 ) ( 182 ) ( 43 ) Closure of tax years ( 19 ) — ( 6 ) Settlements ( 78 ) ( 187 ) ( 21 ) Ending balance $ 419 $ 525 $ 540 Substantially all of the unrecognized tax benefits are classified as long-term liabilities. During 2025, the company’s tax benefits decreased by $ 103 million as a result of uncertain tax positions relating to foreign tax positions, which included $ 72 million of reserve and associated interest from the settlement of international tax audits and decreased $ 3 million relating to U.S. federal and state tax positions. During 2024, the company’s unrecognized tax benefits decreased by $ 99 million as a result of uncertain tax positions relating to foreign tax positions which included $ 240 million of reserve and associated interest from the settlement of international tax audits for tax years 2009 through 2016 and increased $ 84 million relating to U.S. federal and state tax positions. During 2023, the company’s unrecognized tax benefits decreased by $ 12 million as a result of uncertain tax positions relating to foreign tax positions and decreased $ 19 million relating to U.S. federal and state tax positions. The company classified interest and penalties related to unrecognized tax benefits as income tax expense. The total amount of interest and penalties related to uncertain tax positions and recognized in the balance sheet as of December 31, 2025 and 2024 was $ 39 million and $ 75 million, respectively. The company conducts business globally and, as a result, Thermo Fisher or one or more of its subsidiaries files income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions. In the normal course of business, the company is subject to examination by taxing authorities throughout the world, including such major jurisdictions as Australia, Canada, China, Denmark, Finland, France, Germany, Japan, Singapore, Sweden, the United Kingdom and the United States. With few exceptions, the company is no longer subject to U.S. state and local or non-U.S. income tax examinations for years before 2012 and no longer subject to U.S. federal income tax examinations for years before 2019. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted. The OBBBA includes a broad range of provisions, such as the permanent extension of certain otherwise expiring provisions, modifications to the international tax framework and the reinstatement of favorable tax treatment for certain business provisions. While most of the changes made by the OBBBA are effective in future tax years, some of its provisions are effective in 2025. There was no material impact on the company’s effective tax rate. We will continue to monitor and assess the impact of OBBBA on our consolidated financial statements. 59 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 8. Comprehensive Income/(Loss) and Shareholders' Equity Comprehensive Income/(Loss) Changes in each component of accumulated other comprehensive income/(loss), net of tax, are as follows: (In millions) Cumulative translation adjustment Unrealized gains/(losses) on hedging instruments Pension and other postretirement benefit liability adjustment Total Balance at December 31, 2024 $ ( 2,409 ) $ ( 25 ) $ ( 263 ) $ ( 2,697 ) Other comprehensive income/(loss) before reclassifications 223 — 13 236 Amounts reclassified from accumulated other comprehensive income/(loss) 5 3 5 13 Net other comprehensive income/(loss) 228 3 18 249 Balance at December 31, 2025 $ ( 2,181 ) $ ( 23 ) $ ( 245 ) $ ( 2,448 ) Shareholders’ Equity At December 31, 2025, the company had reserved 36 million unissued shares of its common stock for possible issuance under stock-based compensation plans. Early in the first quarter of 2026, the company repurchased $ 3.00 billion of the company's common stock ( 4.9 million shares). Note 9. Supplemental Cash Flow Information Supplemental cash flow information is as follows: (In millions) 2025 2024 2023 Cash paid for: Interest $ 1,612 $ 1,570 $ 1,385 Income taxes, net of refunds received Federal 408 U.S. state and local 184 Foreign United Kingdom 207 Netherlands 179 Germany 97 China 97 Other 603 Total income taxes, net of refunds received 1,776 1,834 1,482 Non-cash investing and financing activities Acquired but unpaid property, plant and equipment $ 264 $ 303 $ 296 Finance lease ROU assets obtained in exchange for new finance lease liabilities 21 — 2 Declared but unpaid dividends 164 150 137 Issuance of stock upon vesting of restricted stock units 164 186 234 Excise tax from stock repurchases 24 26 28 60 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Cash, cash equivalents and restricted cash is included in the consolidated balance sheet as follows: December 31, December 31, (In millions) 2025 2024 Cash and cash equivalents $ 9,852 $ 4,009 Restricted cash included in other current assets 5 10 Restricted cash included in other assets 22 21 Cash, cash equivalents and restricted cash $ 9,879 $ 4,040 Amounts included in restricted cash primarily represent funds held as collateral for bank guarantees, pension related deposits, and incoming cash in China awaiting government administrative clearance. Note 10. Derivatives Derivative Contracts The following table provides the aggregate notional value of outstanding derivative contracts. December 31, December 31, (In millions) 2025 2024 Notional amount Cross-currency interest rate swaps designated as net investment hedge - euro $ 1,000 $ 1,000 Cross-currency interest rate swaps designated as net investment hedge - Japanese yen 4,650 4,650 Cross-currency interest rate swaps designated as net investment hedge - Swiss franc 5,000 2,500 Currency exchange contracts 2,248 1,588 While certain derivatives are subject to netting arrangements with counterparties, the company does not offset derivative assets and liabilities within the balance sheet. The following tables present the fair value of derivative instruments in the accompanying balance sheets and statements of income. Fair value – assets Fair value – liabilities December 31, December 31, December 31, December 31, (In millions) 2025 2024 2025 2024 Derivatives designated as hedging instruments Cross-currency interest rate swaps $ 684 $ 458 $ 504 $ 57 Derivatives not designated as hedging instruments Currency exchange contracts 2 2 2 2 Total derivatives $ 685 $ 460 $ 506 $ 59 The following table provides information on the company’s derivative positions subject to master netting arrangements, presented on a net basis, had the company elected to offset the asset and liability balances of its positions in the consolidated balance sheets: Fair value – assets Fair value – liabilities December 31, December 31, December 31, December 31, (In millions) 2025 2024 2025 2024 Gross amounts recognized in the consolidated balance sheets $ 685 $ 460 $ 506 $ 59 Gross amounts subject to offset in master netting arrangements not offset in the consolidated balance sheets ( 319 ) $ ( 56 ) ( 319 ) $ ( 56 ) Total derivatives, net $ 366 $ 404 $ 187 $ 3 61 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Gain/(loss) recognized (In millions) 2025 2024 2023 Derivatives designated as cash flow hedges Interest rate swaps Amount reclassified from accumulated other comprehensive income/(loss) to interest expense $ ( 3 ) $ ( 3 ) $ ( 4 ) Amount reclassified from accumulated other comprehensive items to other income/(loss) — — ( 3 ) Financial instruments designated as net investment hedges Foreign currency-denominated debt and other payables Included in cumulative translation adjustment within other comprehensive income/(loss) ( 1,252 ) 686 ( 356 ) Cross-currency interest rate swaps Included in cumulative translation adjustment within other comprehensive income/(loss) ( 222 ) 682 ( 222 ) Included in interest expense 287 267 120 Derivatives not designated as hedging instruments Currency exchange contracts Included in cost of product revenues ( 7 ) 21 1 Included in other income/(expense) 66 ( 16 ) ( 29 ) See Note 1 and Note 3 for additional information on the company’s risk management objectives and strategies. Note 11. Business Segment and Geographical Information The company’s financial performance is reported in four segments. A description of each segment follows. 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. 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 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 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 innovative, productive and cost-efficient. 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, restructuring and other costs, and amortization of acquisition-related intangible assets. The company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitates comparison of performance for determining compensation. The company's chairman, president and chief executive officer is its chief operating decision maker (CODM). The CODM uses total revenues and segment income predominantly in the strategic plan, annual operating plan and quarterly business review processes. During these processes, the CODM considers budget-to-actual variances to evaluate both internal (e.g., changes in selling prices, strategic growth investments, productivity, business mix, newly acquired/divested businesses, etc.) and external (e.g., inflation, foreign currency, etc.) events and conditions. The company generally accounts for intersegment revenues at current market prices. 62 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Other segment items included in the below tables consist of stock-based compensation and other incentive compensation expenses, allocations of corporate and certain overhead expenses, as well as elimination of intersegment and intrasegment profits, all of which are included in the company's measurement of segment income, but not regularly provided to the CODM at the segment level. Cost of revenues adjustments 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 adjustments consist of certain transaction-related third-party costs (including reimbursement thereof), charges/credits for changes in estimates of contingent acquisition consideration, and charges related to product liability litigation. Restructuring and other costs include charges arising from headcount reductions and facility consolidations such as severance and abandoned lease expense and gains and losses on the sale of real estate and product lines, as well as impacts of pre-acquisition matters, net charges for significant litigation-related matters, and certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability (Note 6). Prior period segment expense amounts have been recast to reflect the method for allocating expenses to segments in the current period. Segment assets included in the below tables consist of third-party accounts receivable and inventories, which are regularly provided to the CODM. Geographical revenues are attributed to countries based on customer location. Long-lived assets by geographical location includes property, plant and equipment, net, and operating lease ROU assets. Business Segment Information 2025 (In millions) Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Total Revenues Revenues from external customers $ 8,781 $ 7,353 $ 4,604 $ 23,818 $ 44,556 Intersegment revenues 1,593 201 72 167 2,033 10,374 7,554 4,676 23,984 46,589 Elimination of intersegment revenues ( 2,033 ) Consolidated revenues $ 44,556 Segment Income Cost of revenues 3,929 3,850 2,718 18,609 Selling, general, and administrative expenses 1,912 1,244 708 2,392 Research and development expenses 553 573 178 56 Other segment items 213 151 ( 183 ) ( 422 ) Segment income 3,768 1,736 1,256 3,350 10,109 Unallocated amounts Cost of revenues adjustments ( 64 ) Selling, general and administrative expenses adjustments ( 207 ) Restructuring and other costs ( 362 ) Amortization of acquisition-related intangible assets ( 1,730 ) Interest income 993 Interest expense ( 1,419 ) Other income/(expense) ( 12 ) Consolidated income before income taxes $ 7,308 (In millions) Unallocated amounts Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Consolidated Segment assets $ 95,919 $ 3,446 $ 3,170 $ 1,323 $ 6,485 $ 110,343 Purchases of property, plant and equipment 116 152 124 128 1,005 1,525 Depreciation of property, plant and equipment — 251 104 91 604 1,050 63 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2024 (In millions) Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Total Revenues Revenues from external customers $ 8,160 $ 7,267 $ 4,449 $ 23,002 $ 42,879 Intersegment revenues 1,471 196 63 155 1,885 9,631 7,463 4,512 23,157 44,764 Elimination of intersegment revenues ( 1,885 ) Consolidated revenues $ 42,879 Segment Income Cost of revenues 3,560 3,532 2,605 18,020 Selling, general, and administrative expenses 1,797 1,250 732 2,356 Research and development expenses 551 551 176 66 Other segment items 221 174 ( 159 ) ( 375 ) Segment income 3,503 1,955 1,159 3,090 9,707 Unallocated amounts Cost of revenues adjustments ( 47 ) Selling, general and administrative expenses adjustments 8 Restructuring and other costs ( 379 ) Amortization of acquisition-related intangible assets ( 1,952 ) Interest income 1,078 Interest expense ( 1,390 ) Other income/(expense) 12 Consolidated income before income taxes $ 7,037 (In millions) Unallocated amounts Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Consolidated Segment assets $ 84,031 $ 2,982 $ 2,944 $ 1,218 $ 6,145 $ 97,321 Purchases of property, plant and equipment 85 123 95 125 971 1,400 Depreciation of property, plant and equipment — 230 103 104 721 1,156 64 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 2023 (In millions) Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Total Revenues Revenues from external customers $ 8,545 $ 7,101 $ 4,324 $ 22,888 $ 42,857 Intersegment revenues 1,432 163 82 154 1,829 9,977 7,263 4,405 23,041 44,686 Elimination of intersegment revenues ( 1,829 ) Consolidated revenues $ 42,857 Segment Income Cost of revenues 4,078 3,467 2,584 17,978 Selling, general, and administrative expenses 1,766 1,244 716 2,276 Research and development expenses 558 528 156 68 Other segment items 155 116 ( 174 ) ( 638 ) Segment income 3,420 1,908 1,124 3,358 9,810 Unallocated amounts Cost of revenues adjustments ( 95 ) Selling, general and administrative expenses adjustments ( 59 ) Restructuring and other costs ( 459 ) Amortization of acquisition-related intangible assets ( 2,338 ) Interest income 879 Interest expense ( 1,375 ) Other income/(expense) ( 65 ) Consolidated income before income taxes $ 6,298 (In millions) Unallocated amounts Life Sciences Solutions Analytical Instruments Specialty Diagnostics Laboratory Products and Biopharma Services Consolidated Segment assets $ 85,314 $ 3,186 $ 2,726 $ 1,150 $ 6,350 $ 98,726 Purchases of property, plant and equipment 80 178 87 121 1,013 1,479 Depreciation of property, plant and equipment — 220 93 86 669 1,068 Geographical Information (In millions) 2025 2024 2023 Revenues United States $ 22,240 $ 21,755 $ 22,013 Other 22,316 21,124 20,844 Consolidated revenues $ 44,556 $ 42,879 $ 42,857 Long-lived Assets United States $ 6,547 $ 6,245 $ 6,352 Other 5,465 4,550 4,652 Consolidated long-lived assets $ 12,012 $ 10,795 $ 11,004 65 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 12. Acquisitions Acquisitions 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. 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 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. Pending Acquisition The company has entered into an agreement to acquire Clario Holdings, Inc. for approximately $ 8.875 billion in cash at the closing of the transaction, with an additional $ 125 million in deferred consideration and up to $ 400 million in contingent consideration to be payable following the closing. Clario is a leading provider of endpoint data solutions for clinical trials. The transaction, which is expected to be completed by the middle of 2026, is subject to customary closing conditions and regulatory approvals. Upon completion, Clario will become part of the Laboratory Products and Biopharma Services segment. 2025 On September 1, 2025, the company acquired, within the Life Sciences Solutions segment, our filtration and separation business, a leading provider of purification and filtration technologies used in the production of biologics as well as in medical technologies and industrial applications, from Solventum Corporation. The business strengthens the segment’s bioproduction offerings with advanced filtration technologies that improve quality and efficiency across upstream and downstream workflows. In addition, its industrial filtration and membrane solutions will expand our reach into industries including battery, semiconductor and medical device manufacturing. 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 millions) Filtration and separation business Purchase price Cash paid $ 3,944 Fair value of contingent consideration ( 66 ) Cash acquired ( 9 ) $ 3,870 Net assets acquired Property, plant and equipment $ 454 Definite-lived intangible assets Customer relationships 1,115 Product technology 386 Trade names 51 Goodwill 2,101 Net other assets/(liabilities) 141 Deferred tax assets (liabilities) ( 377 ) $ 3,870 The preliminary allocation of the purchase price for the acquisition of Solventum’s Filtration and Separation business is based on the estimates of the fair value of the purchase price and net assets acquired and is subject to adjustment upon finalization, largely with respect to acquired intangible assets, real and personal property, inventory and the related deferred taxes. Measurements of these items inherently require significant estimates and assumptions. 66 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) In addition, in 2025, the company acquired within the Laboratory Products and Biopharma Services segment, a sterile fill finishing and packaging facility to meet the growing demand from pharma and biotech customers for U.S. manufacturing capacity. The weighted-average amortization periods for definite-lived intangible assets acquired in 2025 are 18 years for customer relationships, 19 years for product technology, and 15 years for trade names. The weighted-average amortization period for all definite-lived intangible assets acquired in 2025 is 18 years. 2024 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 tax deductible. The components of the purchase price and net assets acquired are as follows: (In millions) Olink Purchase price Cash paid $ 3,215 Purchase price payable 28 Cash acquired ( 97 ) $ 3,146 Net assets acquired Definite-lived intangible assets Customer relationships $ 708 Product technology 207 Trade names 97 Goodwill 2,301 Net other assets/(liabilities) 9 Deferred tax assets/(liabilities) ( 176 ) $ 3,146 The weighted-average amortization periods for definite-lived intangible assets acquired in 2024 are 19 years for customer relationships, 15 years for product technology, and 15 years for trade names. The weighted-average amortization period for definite-lived intangible assets acquired in 2024 is 18 years. 2023 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 tax deductible. On August 14, 2023, the company acquired, within the Laboratory Products and Biopharma Services segment, CorEvitas, LLC, a U.S.-based provider of regulatory-grade, real-world evidence for approved medical treatments and therapies. The acquisition expands the segment’s portfolio with the addition of highly complementary real-world evidence solutions to enhance decision-making as well as the time and cost of drug development. The goodwill recorded as a result of this business combination is not tax deductible. 67 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The components of the purchase price and net assets acquired are as follows: (In millions) The Binding Site CorEvitas Purchase price Cash paid $ 2,412 $ 730 Debt settled 307 184 Cash acquired ( 20 ) ( 4 ) $ 2,699 $ 910 Net assets acquired Definite-lived intangible assets Customer relationships $ 868 $ 260 Product technology 162 47 Trade names 42 — Backlog — 46 Goodwill 1,741 627 Net tangible assets 174 ( 2 ) Deferred tax assets (liabilities) ( 288 ) ( 68 ) $ 2,699 $ 910 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 periods for definite-lived intangible assets acquired in 2023 are 18 years for customer relationships, 14 years for product technology, 15 years for trade names, and 13 years for backlog. The weighted-average amortization period for definite-lived intangible assets acquired in 2023 is 17 years. Note 13. Leases As a lessee, the company leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally for 1 to 10 years) or have options to terminate the arrangement within 1 year. The company has guaranteed the residual value of three leased operating facilities with lease terms ending in 2028, 2029, and 2030. The company has agreed with the lessor to comply with certain financial covenants consistent with its other debt arrangements (Note 3). The aggregate maximum guarantee under these three lease arrangements is $ 147 million. Operating lease ROU assets and lease liabilities for these lease arrangements are recorded on the consolidated balance sheet as of December 31, 2025, but exclude any amounts for residual value guarantees. 68 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) As a lessee, the consolidated financial statements include the following relating to operating leases: (Dollars in millions) 2025 2024 2023 Statement of income Operating lease costs $ 381 $ 353 $ 355 Variable lease costs 116 115 115 Statement of cash flows Cash used in operating activities for payments of amounts included in the measurement of operating lease liabilities $ 374 $ 327 $ 410 Operating lease ROU assets obtained in exchange for new operating lease liabilities 197 262 234 Balance sheet ROU assets - included in other assets $ 1,447 $ 1,489 Operating lease liabilities - included in other accrued expenses 275 261 Operating lease liabilities - included in other long-term liabilities 1,195 1,239 Weighted average at end of year Remaining operating lease term 7.9 years 8.6 years Discount rate 4.7 % 4.6 % Lease costs arising from finance leases, short-term leases, and sublease income are not material. See Note 3 for additional information relating to finance leases. As of December 31, 2025, future payments of operating lease liabilities are as follows: (In millions) 2026 $ 331 2027 283 2028 237 2029 174 2030 142 2031 and thereafter 652 Total lease payments 1,819 Less: imputed interest 349 Total operating lease liability $ 1,470 As a lessor, operating leases, sales-type leases and direct financing leases are not material. Note 14. Pension and Other Postretirement Benefit Plans 401(k) Savings Plan and Other Defined Contribution Plans The company’s 401(k) savings and other defined contribution plans cover the majority of the company’s eligible U.S. and certain non-U.S. employees. Contributions to the plans are made by both employees and the company. Company contributions are based on the level of employee contributions and formulas determined by the company. In 2025, 2024, and 2023, the company charged to expense $ 472 million, $ 443 million, and $ 468 million, respectively, related to its defined contribution plans. Defined Benefit Pension Plans Employees of a number of the company’s non-U.S. and certain U.S. subsidiaries participate in defined benefit pension plans covering substantially all full-time employees at those subsidiaries. Some of the plans are unfunded, as permitted under the plans and applicable laws. The company also maintains postretirement healthcare programs at several acquired businesses where certain employees are eligible to participate. The liabilities and costs associated with the company’s postretirement healthcare programs are generally funded on a self-insured and insured-premium basis and are not material for any period presented. 69 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Contributions to the plans included in the following table are estimated at between $ 45 million and $ 50 million for 2026. 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. pension benefits (In millions) 2025 2024 2025 2024 Accumulated benefit obligation $ 946 $ 937 $ 1,176 $ 1,079 Change in projected benefit obligations Projected benefit obligation at beginning of year $ 937 $ 1,005 $ 1,135 $ 1,221 Acquisitions 2 — 46 — Service costs — — 33 28 Interest costs 47 46 41 40 Settlements — — ( 69 ) ( 29 ) Plan participants' contributions — — 10 10 Actuarial (gains)/losses 42 ( 32 ) ( 59 ) ( 59 ) Benefits paid ( 83 ) ( 81 ) ( 23 ) ( 26 ) Currency translation and other — — 121 ( 49 ) Projected benefit obligation at end of year $ 946 $ 937 $ 1,236 $ 1,135 Change in fair value of plan assets Fair value of plan assets at beginning of year $ 895 $ 947 $ 867 $ 944 Acquisitions 2 — 22 — Actual return on plan assets 84 22 16 ( 37 ) Employer contributions 5 7 40 37 Settlements — — ( 69 ) ( 29 ) Plan participants' contributions — — 10 10 Benefits paid ( 83 ) ( 81 ) ( 23 ) ( 26 ) Currency translation and other — — 88 ( 32 ) Fair value of plan assets at end of year $ 903 $ 895 $ 952 $ 867 Funded status $ ( 43 ) $ ( 43 ) $ ( 284 ) $ ( 268 ) Amounts recognized in balance sheet Noncurrent assets $ 3 $ 5 $ 71 $ 57 Current liability ( 5 ) ( 5 ) ( 13 ) ( 12 ) Noncurrent liabilities ( 40 ) ( 42 ) ( 342 ) ( 313 ) Net amount recognized $ ( 43 ) $ ( 43 ) $ ( 284 ) $ ( 268 ) Amounts recognized in accumulated other comprehensive income/(loss) Net actuarial (gain)/loss $ 234 $ 218 $ 118 $ 156 Prior service (credits)/cost — — ( 9 ) ( 7 ) Net amount recognized $ 234 $ 218 $ 109 $ 149 Actuarial (gains)/losses experienced in 2025 for domestic pension plans were driven by differences between actual and expected returns on plan assets for certain portions of plan benefits indexed to asset returns, as well as decreases in the weighted average discount rates used to determine the projected benefit obligation when compared to 2024. For non-U.S. pension plans, actuarial (gains)/losses experienced in 2025 were primarily driven by increases in the weighted average discount rates used to determine the projected benefit obligation when compared to 2024. Actuarial (gains)/losses experienced in 2024 for both domestic and non-U.S. pension plans were primarily driven by increases in the weighted average discount rates used to determine the projected benefit obligation when compared to 2023. 70 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The actuarial assumptions used to compute the funded status for the plans are based upon information available as of December 31, 2025 and 2024 and are as follows: Domestic pension benefits Non-U.S. pension benefits 2025 2024 2025 2024 Weighted average assumptions used to determine projected benefit obligations Discount rate for determining benefit obligation 5.20 % 5.48 % 4.05 % 3.74 % Interest crediting rate for cash balance plans 5.00 % 5.39 % 2.52 % 2.28 % Average rate of increase in employee compensation N/A N/A 2.52 % 2.58 % 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: Domestic pension benefits Non-U.S. pension benefits 2025 2024 2023 2025 2024 2023 Weighted average assumptions used to determine net benefit cost/(income) Discount rate - service cost N/A N/A N/A 2.77 % 3.00 % 3.62 % Discount rate - interest cost 5.49 % 4.82 % 5.01 % 3.62 % 3.48 % 3.95 % Interest crediting rate for cash balance plans 5.39 % 4.76 % 4.96 % 2.28 % 2.06 % 2.19 % Average rate of increase in employee compensation N/A N/A N/A 2.58 % 2.64 % 2.77 % Expected long-term rate of return on assets 6.50 % 6.00 % 6.25 % 4.52 % 4.28 % 4.33 % The projected benefit obligation and fair value of plan assets for the company’s qualified and non-qualified pension plans with projected benefit obligations in excess of plan assets are as follows: Pension plans (In millions) 2025 2024 Pension plans with projected benefit obligations in excess of plan assets Projected benefit obligation $ 850 $ 727 Fair value of plan assets 449 376 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: Pension plans (In millions) 2025 2024 Pension plans with accumulated benefit obligations in excess of plan assets Accumulated benefit obligation $ 792 $ 671 Fair value of plan assets 451 376 The measurement date used to determine benefit information is December 31 for all plan assets and benefit obligations. The net periodic pension benefit cost/(income) includes the following components: Domestic pension benefits Non-U.S. pension benefits (In millions) 2025 2024 2023 2025 2024 2023 Components of net benefit cost/(income) Service cost $ — $ — $ — $ 33 $ 28 $ 26 Interest cost on benefit obligation 47 46 47 41 40 42 Expected return on plan assets ( 59 ) ( 56 ) ( 59 ) ( 37 ) ( 36 ) ( 37 ) Amortization of actuarial net loss — — — 4 4 2 Amortization of prior service cost/(benefit) — — — ( 1 ) ( 1 ) ( 1 ) Settlement/curtailment loss/(gain) — — — 7 2 1 Net periodic benefit cost/(income) $ ( 11 ) $ ( 10 ) $ ( 12 ) $ 47 $ 38 $ 33 71 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Expected benefit payments are estimated using the same assumptions used in determining the company’s benefit obligation at December 31, 2025. Benefit payments will depend on future employment and compensation levels, average years employed and average life spans, among other factors, and changes in any of these factors could significantly affect these estimated future benefit payments. 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 pension benefits Non-U.S. pension benefits Expected benefit payments 2026 $ 84 $ 61 2027 83 61 2028 83 67 2029 81 72 2030 80 71 2031-2035 370 394 Domestic Pension Plan Assets The company’s overall objective is to manage the assets in a liability framework where investments are selected that are expected to have similar changes in fair value as the related liabilities will have upon changes in interest rates. The company invests in a portfolio of both return-seeking and liability-hedging assets, primarily through the use of institutional collective funds, to achieve long-term growth and to insulate the funded position from interest rate volatility. The strategic asset allocation uses a combination of risk controlled and index strategies in fixed income and global equities. The target allocations for the investments are approximately 10 % to funds investing in U.S. equities, approximately 10 % to funds investing in international equities and approximately 80 % to funds investing in fixed income securities. The portfolio maintains enough liquidity at all times to meet the near-term benefit payments. Non-U.S. Pension Plan Assets The company maintains specific plan assets for many of the individual pension plans outside the U.S. The investment strategy of each plan has been uniquely established based on the country specific standards and characteristics of the plans. 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 diversified assets with a variety of fund managers. The investments may include equity funds, fixed income funds, hedge funds, multi-asset funds, alternative investments, real estate funds and derivative funds with the target asset allocations ranging from approximately 0 % - 10 % for equity funds, 30 % - 75 % for fixed income funds, 0 % - 45 % for multi-asset funds, 0 % - 4 % for alternative investments, 0 % - 2 % for real estate funds and 0 % - 35 % for funds holding derivatives. The derivatives held by the funds are primarily interest rate swaps intended to match the movements in the plan liabilities. Each plan maintains enough liquidity at all times to meet the near-term benefit payments. 72 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The fair values of the company’s plan assets at December 31, 2025 and 2024, by asset category are as follows: December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Not subject to leveling (a) (In millions) 2025 (Level 1) (Level 2) (Level 3) Domestic pension plan assets U.S. equity funds $ 120 $ — $ — $ — $ 120 International equity funds 71 — — — 71 Fixed income funds 693 — — — 693 Money market funds 20 — — — 20 Total domestic pension plans $ 903 $ — $ — $ — $ 903 Non-U.S. pension plan assets Equity funds $ 10 $ — $ — $ — $ 10 Fixed income funds 325 9 — — 316 Multi-asset funds 100 — — — 100 Derivative funds 133 — — — 133 Insurance contracts 378 — 378 — — Cash / money market funds 6 4 — — 2 Total non-U.S. pension plans $ 952 $ 13 $ 378 $ — $ 561 (a) Investments measured at the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. December 31, Quoted prices in active markets Significant other observable inputs Significant unobservable inputs Not subject to leveling (a) (In millions) 2024 (Level 1) (Level 2) (Level 3) Domestic pension plan assets U.S. equity funds $ 91 $ — $ — $ — $ 91 International equity funds 89 — — — 89 Fixed income funds 692 — — — 692 Money market funds 23 — — — 23 Total domestic pension plans $ 895 $ — $ — $ — $ 895 Non-U.S. pension plan assets Equity funds $ 7 $ — $ — $ — $ 7 Fixed income funds 288 7 — — 281 Multi-asset funds 69 — — — 69 Derivative funds 169 — — — 169 Insurance contracts 325 — 325 — — Cash / money market funds 9 4 — — 5 Total non-U.S. pension plans $ 867 $ 10 $ 325 $ — $ 532 (a) Investments measured at the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy. The tables above present the fair value of the company’s plan assets in accordance with the fair value hierarchy (Note 1). Certain investments that are measured at fair value using the net asset value per share practical expedient have not been classified in the fair value hierarchy. The fair value amounts of these investments presented in the above tables are intended to permit reconciliation of the fair value hierarchy to the amounts presented for the total pension plan assets. These investments were also redeemable at the balance sheet date or within limited time restrictions. 73 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) Note 15. Stock-based Compensation Expense The company has stock-based compensation plans for its key employees, directors and others. These plans permit the grant of a variety of stock and stock-based awards, including restricted stock units, stock options, or performance-based shares, as determined by the compensation committee of the company’s Board of Directors or, for certain non-officer grants, by the company’s employee equity committee, which consists of its chief executive officer. The company generally issues new shares of its common stock to satisfy option exercises and restricted unit vesting. Grants of stock options and restricted units generally provide that in the event of both a change in control of the company and a qualifying termination of an option or unit holder’s employment, all options and service-based restricted unit awards held by the recipient become immediately vested (unless an employment or other agreement with the employee provides for different treatment). Stock Options The weighted average assumptions used in the Black-Scholes option pricing model are as follows: 2025 2024 2023 Expected stock price volatility 25 % 25 % 25 % Risk free interest rate 4.4 % 4.3 % 4.2 % Expected life of options (years) 5.9 5.0 4.7 Expected annual dividend 0.3 % 0.3 % 0.3 % Weighted average per share grant-date fair values of options granted $ 166.69 $ 166.92 $ 159.32 The total intrinsic value of options exercised during the same periods was $ 247 million, $ 395 million and $ 320 million, respectively. The intrinsic value is the difference between the market value of the shares on the exercise date and the exercise price of the option. A summary of the company’s option activity for the year ended December 31, 2025 is presented below: Shares (in millions) Weighted average exercise price Weighted average remaining contractual term (in years) Aggregate intrinsic value (in millions) Outstanding at December 31, 2024 4.5 $ 465.80 Granted 0.9 507.42 Exercised ( 0.8 ) 267.66 Canceled/expired ( 0.3 ) 558.52 Outstanding at December 31, 2025 4.3 $ 507.59 5.0 $ 336 Vested and unvested expected to vest at December 31, 2025 4.2 $ 507.05 4.9 $ 327 Exercisable at December 31, 2025 2.3 $ 488.09 3.0 $ 237 As of December 31, 2025, there was $ 180 million of total unrecognized compensation cost related to unvested stock options granted. The cost is expected to be recognized through 2029 with a weighted average amortization period of 2.2 years. Restricted Share/Unit Awards A summary of the company’s restricted unit activity for the year ended December 31, 2025 is presented below: Units (in millions) Weighted average grant-date fair value Unvested at December 31, 2024 0.6 $ 551.81 Granted 0.6 480.35 Performance adjustments 0.1 560.12 Vested ( 0.3 ) 546.98 Forfeited ( 0.1 ) 547.42 Unvested at December 31, 2025 0.8 $ 505.62 74 THERMO FISHER SCIENTIFIC INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) The weighted average per share grant-date fair values of restricted units granted during 2024 and 2023 were $ 556.83 and $ 545.73 , respectively. The total fair value of shares vested during 2025, 2024 and 2023 was $ 178 million, $ 165 million and $ 207 million, respectively. As of December 31, 2025, there was $ 278 million of total unrecognized compensation cost related to unvested restricted stock unit awards. The cost is expected to be recognized through 2030 with a weighted average amortization period of 2.4 years. Employee Stock Purchase Plans Qualifying employees are eligible to participate in an employee stock purchase plan sponsored by the company. Shares may be purchased under the program at 95 % of the fair market value at the end of the purchase period and the shares purchased are not subject to a holding period. Shares are purchased through payroll deductions of up to 10 % of each participating employee’s qualifying gross wages. The company issued 0.2 million, 0.1 million and 0.1 million shares, respectively, of its common stock in 2025, 2024 and 2023 under the employee stock purchase plan. 75 THERMO FISHER SCIENTIFIC INC. Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure Not applicable.