UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. - PDF document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ý Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended April 2, 2016 ¨ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File Number 1-8002 THERMO FISHER SCIENTIFIC INC. (Exact name of Registrant as specified in its charter) Delaware 04-2209186 (State of incorporation or organization) (I.R.S. Employer Identification No.) 81 Wyman Street Waltham, Massachusetts 02451 (Address of principal executive offices) (Zip Code) Registrant’s telephone number, including area code: (781) 622-1000 Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files). Yes ý No o Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ý Accelerated filer o Non-accelerated filer o Smaller reporting company o Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date. Class Outstanding at April 2, 2016 Common Stock, $1.00 par value 393,512,230

THERMO FISHER SCIENTIFIC INC. QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED APRIL 2, 2016 TABLE OF CONTENTS Page PART I Item 1. Financial Statements (Unaudited) 3 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 28 Item 3. Quantitative and Qualitative Disclosures About Market Risk 35 Item 4. Controls and Procedures 36 PART II Item 1. Legal Proceedings 36 Item 1A. Risk Factors 36 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 41 Item 6. Exhibits 42 2

THERMO FISHER SCIENTIFIC INC. PART I FINANCIAL INFORMATION Item 1. Financial Statements CONSOLIDATED BALANCE SHEET (Unaudited) April 2, December 31, 2016 (In millions except share and per share amounts) 2015 Assets Current Assets: Cash and cash equivalents $ 826.8 $ 452.1 2,668.3 Accounts receivable, less allowances of $71.6 and $70.1 2,544.9 Inventories 2,154.9 1,991.7 889.0 Other current assets 752.5 Total current assets 6,539.0 5,741.2 Property, Plant and Equipment, Net 2,483.1 2,448.8 13,237.8 Acquisition-related Intangible Assets, Net 12,758.3 Other Assets 1,060.3 1,058.4 19,632.5 Goodwill 18,827.6 42,952.7 Total Assets $ $ 40,834.3 Liabilities and Shareholders' Equity Current Liabilities: 3,383.0 Short-term obligations and current maturities of long-term obligations $ $ 1,051.8 Accounts payable 853.0 822.2 421.2 Accrued payroll and employee benefits 598.2 Accrued income taxes 55.7 212.5 360.5 Deferred revenue 317.9 Other accrued expenses 1,249.4 1,143.7 6,322.8 Total current liabilities 4,146.3 2,694.0 Deferred Income Taxes 2,622.6 1,358.5 Other Long-term Liabilities 1,295.0 11,653.0 Long-term Obligations 11,420.2 Shareholders' Equity: Preferred stock, $100 par value, 50,000 shares authorized; none issued Common stock, $1 par value, 1,200,000,000 shares authorized; 413,253,651 and 411,944,301 shares issued 413.3 411.9 11,918.8 Capital in excess of par value 11,801.2 Retained earnings 12,485.2 12,142.3 (2,026.2) Treasury stock at cost, 19,741,421 and 12,314,200 shares (1,007.9) Accumulated other comprehensive items (1,866.7) (1,997.3) 20,924.4 Total shareholders' equity 21,350.2 42,952.7 $ $ 40,834.3 Total Liabilities and Shareholders' Equity The accompanying notes are an integral part of these consolidated financial statements.

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THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENT OF INCOME (Unaudited) Three Months Ended April 2, March 28, 2016 (In millions except per share amounts) 2015 Revenues 3,690.4 Product revenues $ $ 3,387.6 Service revenues 604.4 531.2 4,294.8 Total revenues 3,918.8 Costs and Operating Expenses: Cost of product revenues 1,933.6 1,720.8 403.3 Cost of service revenues 375.5 Selling, general and administrative expenses 1,212.9 1,137.4 176.5 Research and development expenses 165.8 Restructuring and other costs, net 50.6 32.0 3,776.9 Total costs and operating expenses 3,431.5 517.9 Operating Income 487.3 Other Expense, Net (94.9) (105.3) 423.0 Income from Continuing Operations Before Income Taxes 382.0 (Provision for) Benefit from Income Taxes (20.7) 3.1 402.3 Income from Continuing Operations 385.1 Loss from Discontinued Operations (net of income tax benefit of $0.1 and $0.0) (0.1) — $ 402.2 $ 385.1 Net Income Earnings per Share from Continuing Operations $ 1.02 $ 0.97 Basic $ 1.01 $ 0.96 Diluted Earnings per Share 1.02 $ $ 0.97 Basic 1.01 $ $ 0.96 Diluted Weighted Average Shares 395.8 Basic 397.8 398.7 Diluted 401.4 0.15 $ $ 0.15 Cash Dividends Declared per Common Share The accompanying notes are an integral part of these consolidated financial statements. 4

THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME (LOSS) (Unaudited) Three Months Ended April 2, March 28, 2016 (In millions) 2015 Comprehensive Income (Loss) 402.2 Net Income $ $ 385.1 Other Comprehensive Items: Currency translation adjustment 169.9 (563.1) Unrealized gains on available-for-sale investments: Unrealized holding (losses) gains arising during the period (net of tax benefit of $0.4 and $0.0) (1.5) 0.1 Unrealized gains and losses on hedging instruments: Unrealized losses on hedging instruments (net of tax benefit of $22.4 and $4.9) (36.6) (8.0) 0.8 Reclassification adjustment for losses included in net income (net of tax benefit of $0.5 and $0.1) 1.1 Pension and other postretirement benefit liability adjustments: Pension and other postretirement benefit liability adjustments arising during the period (net of tax (benefit) provision of ($1.1) and $2.9) (3.4) 6.6 Amortization of net loss and prior service benefit included in net periodic pension cost (net of tax benefit of $0.3 and $0.7) 1.4 1.7 130.6 Total other comprehensive items (561.6) 532.8 $ $ (176.5) Comprehensive Income (Loss) The accompanying notes are an integral part of these consolidated financial statements. 5

THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited) Three Months Ended April 2, March 28, 2016 (In millions) 2015 Operating Activities 402.2 Net income $ $ 385.1 Loss from discontinued operations 0.1 — 402.3 Income from continuing operations 385.1 Adjustments to reconcile income from continuing operations to net cash provided by operating activities: 416.1 Depreciation and amortization 416.3 (88.8) Change in deferred income taxes (102.4) 33.4 Non-cash stock-based compensation 28.2 (27.2) Tax benefits from stock-based compensation awards (39.2) 6.2 Non-cash charges for sale of inventories revalued at the date of acquisition 0.5 14.2 Other non-cash expenses, net 15.8 Changes in assets and liabilities, excluding the effects of acquisitions and dispositions: (29.9) Accounts receivable (124.7) (56.2) Inventories (81.3) (38.7) Other assets (37.6) 34.8 Accounts payable 34.8 (353.4) Other liabilities (395.4) (22.2) Contributions to retirement plans (18.0) Net cash provided by continuing operations 290.6 82.1 (1.5) Net cash used in discontinued operations (2.1) Net cash provided by operating activities 289.1 80.0 Investing Activities (1,032.4) Acquisitions, net of cash acquired (298.6) Purchase of property, plant and equipment (115.1) (97.2) 6.0 Proceeds from sale of property, plant and equipment 0.6 Other investing activities, net 2.2 0.9 (1,139.3) Net cash used in investing activities $ $ (394.3) 6

THERMO FISHER SCIENTIFIC INC. CONSOLIDATED STATEMENT OF CASH FLOWS (Continued) (Unaudited) Three Months Ended April 2, March 28, 2016 (In millions) 2015 Financing Activities 998.9 Net proceeds from issuance of debt $ $ — Repayment of debt (1.4) (851.4) 1,174.0 Increase in commercial paper, net 1,218.9 Purchases of company common stock (1,000.0) (500.0) (60.3) Dividends paid (60.8) Net proceeds from issuance of company common stock under employee stock plans 50.0 60.0 27.2 Tax benefits from stock-based compensation awards 39.2 Other financing activities, net (0.4) (6.3) 1,188.0 Net cash used in financing activities (100.4) 36.9 Exchange Rate Effect on Cash (64.2) Increase (Decrease) in Cash and Cash Equivalents 374.7 (478.9) 452.1 Cash and Cash Equivalents at Beginning of Period 1,343.5 826.8 $ $ 864.6 Cash and Cash Equivalents at End of Period See Note 13 for supplemental cash flow information. The accompanying notes are an integral part of these consolidated financial statements. 7