Watch Live

Tweet TWEET

Thermo Fisher Scientific Reports Fourth Quarter and Full Year 2012 Results

  Thermo Fisher Scientific Reports Fourth Quarter and Full Year 2012 Results

                    Initiates Guidance for Full Year 2013

Business Wire

WALTHAM, Mass. -- January 31, 2013

Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving
science, today reported its financial results for the fourth quarter and full
year ended December 31, 2012.

Fourth Quarter and Full Year 2012 Highlights

  *Adjusted earnings per share (EPS) in the fourth quarter of 2012 grew 14%
    to a record $1.36, and for the full year grew 19% to a record $4.94.
  *Revenue in the fourth quarter increased 6% to a record $3.26 billion.
  *Adjusted operating margin in the fourth quarter expanded 40 basis points
    to 19.6%.
  *Generated record full year free cash flow of $1.77 billion.
  *Full year revenue from high-growth Asia-Pacific markets now represents 17%
    of total company revenue, up from 15% in 2011; China became the second
    largest geography by revenue, at more than $700 million in 2012.
  *Strengthened technology leadership with numerous Thermo Scientific product
    launches in 2012, including the iCAP™Q ICP mass spectrometer, Trace™ 1300
    gas chromatograph, TruNarc™ handheld drug analyzer, Lynx SuperSpeed
    centrifuge and the PikoReal™ PCR system.
  *Invested $1.1 billion to acquire complementary businesses that increase
    depth of capabilities, highlighted by acquisition of One Lambda, which
    expanded specialty diagnostics offering into high-growth transplant
    diagnostics market.
  *Deployed $350 million in the fourth quarter to repurchase 5.7 million
    shares, and $1.15 billion for the full year to repurchase 20.8 million
    shares.
  *Initiated first quarterly dividend in company history and increased
    dividend by 15% in the fourth quarter to $0.15, based on strong
    performance and outlook.

Adjusted EPS, adjusted operating income, adjusted operating margin and free
cash flow are non-GAAP measures that exclude certain items detailed later in
this press release under the heading “Use of Non-GAAP Financial Measures.”

“I’m extremely proud of our outstanding results in 2012, which led to a 19
percent increase in adjusted EPS,” said Marc N. Casper, president and chief
executive officer of Thermo Fisher Scientific. “Our teams executed well in a
challenging environment to deliver strong performance in all three of our
business segments.

“Our strategy to invest in innovation, commercial excellence and emerging
markets is clearly driving growth. This was a banner year for innovation, with
significant new product launches in each of our key technology platforms.
Through strong commercial execution, our value proposition is making a
difference for our customers and helping us to gain share across a broad
customer set. Last, we expanded our footprint in the Asia-Pacific, including
opening our fifth factory in China and a new demo lab in South Korea, to
capture opportunities in high-growth emerging markets.

“It was another stand-out year in terms of effectively deploying our capital
to create shareholder value. We invested more than $1 billion to complete
complementary acquisitions that broaden our offering for our customers and
strengthen our competitive position. We also returned $1.3 billion to our
shareholders through stock repurchases and dividends, reflecting our
confidence in continuing our growth momentum into 2013 and beyond.”

Fourth Quarter 2012

For the fourth quarter of 2012, adjusted EPS grew 14% to a record $1.36,
versus $1.19 in the fourth quarter of 2011. Revenue for the quarter grew 6% to
$3.26 billion in 2012, versus $3.09 billion in 2011. Organic revenue grew 4%,
with currency translation lowering revenue by 1% and acquisitions increasing
revenue by 2%. Adjusted operating income for the fourth quarter of 2012
increased 7% compared with the year-ago period, and adjusted operating margin
expanded to 19.6%, compared with 19.2% in the fourth quarter of 2011.

GAAP diluted EPS for the fourth quarter of 2012 was $1.04, versus $0.77 in the
same quarter last year. GAAP operating income for the fourth quarter of 2012
increased 15% to $401 million, compared with $348 million in 2011. GAAP
operating margin increased to 12.3%, compared with 11.2% in the fourth quarter
of 2011.

Full Year 2012

For the full year 2012, adjusted EPS grew 19% to a record $4.94, versus $4.16
in 2011. Revenue for 2012 grew 8% to $12.51 billion, versus $11.56 billion a
year ago. On a pro forma basis, as if Dionex and Phadia were owned for the
full year in 2011, organic revenue grew 4%. Acquisitions, other than Phadia
and Dionex, increased revenue by 1% and currency translation lowered revenue
by 2%. Adjusted operating income for 2012 increased 12% compared with 2011,
and adjusted operating margin expanded to 19.0%, compared with 18.4% a year
ago.

GAAP diluted EPS for 2012 was $3.21, versus $3.46 in 2011, due primarily to
gains on the sale of discontinued operations in 2011. GAAP operating income
for 2012 increased 18% to $1.48 billion, compared with $1.25 billion a year
ago. GAAP operating margin increased to 11.8%, compared with 10.8% in 2011.

Annual Guidance for 2013

Casper added, “Looking ahead to 2013, we are planning for the global economic
environment to remain challenging. That said, given our performance in 2012
and our proven strategy of delivering top-line growth, using our productivity
levers to expand margins and effectively deploying our capital, I’m confident
we can deliver another successful year.”

Thermo Fisher is initiating adjusted EPS and revenue guidance for the full
year 2013. The company expects to achieve adjusted EPS in the range of $5.32
to $5.46 for 2013, which would result in 8% to 11% adjusted EPS growth over
2012. The company expects to achieve 2013 revenue in the range of $12.80
billion to $13.00 billion, for 2% to 4% revenue growth year over year.

The 2013 guidance does not include any future acquisitions or divestitures and
is based on current foreign exchange rates. In addition, the adjusted EPS
estimate excludes amortization expense for acquisition-related intangible
assets and certain other items detailed later in this press release under the
heading “Use of Non-GAAP Financial Measures.”

Segment Results

Management uses adjusted operating results to monitor and evaluate performance
of the company’s three business segments, as highlighted below.

Analytical Technologies Segment

In the fourth quarter of 2012, Analytical Technologies Segment revenue
increased 2% to $1.11 billion, compared with revenue of $1.08 billion in the
fourth quarter of 2011. Segment adjusted operating income decreased 3% in the
fourth quarter of 2012, and adjusted operating margin was 20.0%, versus 21.1%
in the 2011 quarter.

For the full year 2012, Analytical Technologies Segment revenue increased 7%
to $4.12 billion, compared with revenue of $3.85 billion in 2011. Segment
adjusted operating income increased 7% in 2012, and adjusted operating margin
was 18.7% in both periods.

Specialty Diagnostics Segment

Specialty Diagnostics Segment revenue in the fourth quarter increased 12% to
$792 million in 2012, compared with revenue of $706 million in the fourth
quarter of 2011. Segment adjusted operating income increased 21% in the fourth
quarter of 2012, and adjusted operating margin increased to 25.9%, versus
24.0% in the 2011 quarter.

For the full year 2012, Specialty Diagnostics Segment revenue increased 20% to
$2.96 billion, compared with revenue of $2.47 billion in 2011. Segment
adjusted operating income increased 27% in 2012, and adjusted operating margin
increased to 25.7%, versus 2011 results of 24.2%.

Laboratory Products and Services Segment

In the fourth quarter of 2012, Laboratory Products and Services Segment
revenue increased 4% to $1.50 billion, compared with revenue of $1.44 billion
in the fourth quarter of 2011. Segment adjusted operating income increased 8%
in the fourth quarter of 2012, and adjusted operating margin was 14.1%, versus
13.7% in the 2011 quarter.

For the full year 2012, Laboratory Products and Services Segment revenue
increased 4% to $5.99 billion, compared with revenue of $5.76 billion in 2011.
Segment adjusted operating income increased 4% in 2012, and adjusted operating
margin was 14.1% in both years.

Use of Non-GAAP Financial Measures

In addition to the financial measures prepared in accordance with generally
accepted accounting principles (GAAP), we use certain non-GAAP financial
measures, including adjusted EPS, adjusted operating income and adjusted
operating margin, which exclude restructuring and other costs/income and
amortization of acquisition-related intangible assets. Adjusted EPS also
excludes certain other gains and losses, tax provisions/benefits related to
the previous items, benefits from tax credit carryforwards, the impact of
significant tax audits or events and discontinued operations. We exclude the
above items because they are outside of our normal operations and/or, in
certain cases, are difficult to forecast accurately for future periods. We
also use a non-GAAP measure, free cash flow, which excludes operating cash
flows from discontinued operations and deducts net capital expenditures. We
believe that the use of non-GAAP measures helps investors to gain a better
understanding of our core operating results and future prospects, consistent
with how management measures and forecasts the company’s performance,
especially when comparing such results to previous periods or forecasts.

For example:

We exclude costs and tax effects associated with restructuring activities,
such as reducing overhead and consolidating facilities. We believe that the
costs related to these restructuring activities are not indicative of our
normal operating costs.

We exclude certain acquisition-related costs, including charges for the sale
of inventories revalued at the date of acquisition and significant transaction
costs. We exclude these costs because we do not believe they are indicative of
our normal operating costs.

We exclude the expense and tax effects associated with the amortization of
acquisition-related intangible assets because a significant portion of the
purchase price for acquisitions may be allocated to intangible assets that
have lives of 5 to 20 years. Our adjusted EPS estimate for 2013 excludes
approximately $1.43 of expense for the amortization of acquisition-related
intangible assets for acquisitions completed through the end of the fourth
quarter of 2012. Exclusion of the amortization expense allows comparisons of
operating results that are consistent over time for both our newly acquired
and long-held businesses and with both acquisitive and non-acquisitive peer
companies.

We also exclude certain gains/losses and related tax effects, benefits from
tax credit carryforwards and the impact of significant tax audits or events
(such as the one-time effect on deferred tax balances of enacted changes in
tax rates), which are either isolated or cannot be expected to occur again
with any regularity or predictability and that we believe are not indicative
of our normal operating gains and losses. For example, we exclude gains/losses
from items such as the sale of a business or real estate, gains or losses on
significant litigation-related matters, gains on curtailments of pension
plans, the early retirement of debt and discontinued operations.

We also report free cash flow, which is operating cash flow, net of capital
expenditures, and also excludes operating cash flows from discontinued
operations to provide a view of the continuing operations’ ability to generate
cash for use in acquisitions and other investing and financing activities.

Thermo Fisher’s management uses these non-GAAP measures, in addition to GAAP
financial measures, as the basis for measuring the company’s core operating
performance and comparing such performance to that of prior periods and to the
performance of our competitors. Such measures are also used by management in
their financial and operating decision-making and for compensation purposes.

The non-GAAP financial measures of Thermo Fisher’s results of operations and
cash flows included in this press release are not meant to be considered
superior to or a substitute for Thermo Fisher’s results of operations prepared
in accordance with GAAP. Reconciliations of such non-GAAP financial measures
to the most directly comparable GAAP financial measures are set forth in the
accompanying tables. Thermo Fisher’s earnings guidance, however, is only
provided on an adjusted basis. It is not feasible to provide GAAP EPS guidance
because the items excluded, other than the amortization expense, are difficult
to predict and estimate and are primarily dependent on future events, such as
acquisitions and decisions concerning the location and timing of facility
consolidations.

Conference Call

Thermo Fisher Scientific will hold its earnings conference call today, January
31, 2013, at 8:30 a.m. Eastern time. To listen, dial (866) 804-6922 within the
U.S. or (857) 350-1668 outside the U.S., and use conference ID 27442368. You
may also listen to the call live on our website, www.thermofisher.com, by
clicking on “Investors.” You will find this press release, including the
accompanying reconciliation of non-GAAP financial measures and related
information, in that section of our website under “Financial Results.” An
audio archive of the call will be available under “Webcasts and Presentations”
through Friday, March 1, 2013.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving
science. Our mission is to enable our customers to make the world healthier,
cleaner and safer. With revenue of $13 billion, we have approximately 39,000
employees and serve customers within pharmaceutical and biotech companies,
hospitals and clinical diagnostic labs, universities, research institutions
and government agencies, as well as in environmental and process control
industries. We create value for our key stakeholders through three premier
brands, Thermo Scientific, Fisher Scientific and Unity Lab Services, which
offer a unique combination of innovative technologies, convenient purchasing
options and a single solution for laboratory operations management. Our
products and services help our customers solve complex analytical challenges,
improve patient diagnostics and increase laboratory productivity. Visit
www.thermofisher.com.

The following constitutes a “Safe Harbor” statement under the Private
Securities Litigation Reform Act of 1995: This press release contains
forward-looking statements that involve a number of risks and uncertainties.
Important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements are set forth in the
company’s Quarterly Report on Form 10-Q for the quarter ended September 29,
2012, under the caption “Risk Factors,” which is on file with the Securities
and Exchange Commission and available in the “Investors” section of our
website under the heading “SEC Filings.” Important factors that could cause
actual results to differ materially from those indicated by forward-looking
statements include risks and uncertainties relating to: the need to develop
new products and adapt to significant technological change; implementation of
strategies for improving growth; general worldwide economic conditions and
related uncertainties; dependence on customers' capital spending policies and
government funding policies; the effect of exchange rate fluctuations on
international operations; the effect of healthcare reform legislation; use and
protection of intellectual property; the effect of changes in governmental
regulations; and the effect of laws and regulations governing government
contracts, as well as the possibility that expected benefits related to the
acquisitions of Dionex and Phadia may not materialize as expected. While we
may elect to update forward-looking statements at some point in the future, we
specifically disclaim any obligation to do so, even if estimates change and,
therefore, you should not rely on these forward-looking statements as
representing our views as of any date subsequent to today.



Consolidated Statement of Income (a)(b)
                         Three Months Ended
                             December 31,  % of      December 31,  % of
(In millions except      2012          Revenues  2011          Revenues
per share amounts)
                                                                      
Revenues                     $  3,259.3               $  3,089.3 
Costs and Operating
Expenses:
Cost of revenues (c)            1,815.6     55.7   %      1,736.1     56.2   %
Selling, general and
administrative                  720.1       22.1   %      693.6       22.5   %
expenses (d)
Amortization of
acquisition-related             194.1       6.0    %      186.7       6.0    %
intangible assets
Research and                    98.5        3.0    %      95.5        3.1    %
development expenses
Restructuring and              30.4       0.9    %     29.9       1.0    %
other costs, net (e)
                               2,858.7    87.7   %     2,741.8    88.8   %
                                                                      
Operating Income                400.6       12.3   %      347.5       11.2   %
Interest Income                 6.2                       8.4
Interest Expense                (66.2   )                 (59.1   )
Other Income, Net              2.9                     15.3    
(f)
                                                                      
Income Before Income            343.5                     312.1
Taxes
Benefit from
(Provision for)                42.3                    (19.6   )
Income Taxes (g)
                                                                      
Income from
Continuing                      385.8                     292.5
Operations
                                                                      
Loss from
Discontinued                    (3.8    )                 (3.0    )
Operations, Net of
Tax
Loss on Disposal of
Discontinued                   (5.6    )                (0.6    )
Operations, Net of
Tax
                                                                      
Net Income                   $  376.4      11.5   %   $  288.9      9.4    %
                                                                      
Earnings per Share
from Continuing
Operations:
                                                                      
Basic                        $  1.08                  $  .78     
Diluted                      $  1.07                  $  .78     
                                                                      
Earnings per Share:
                                                                      
Basic                        $  1.05                  $  .77     
Diluted                      $  1.04                  $  .77     
                                                                      
Weighted Average
Shares:
                                                                      
Basic                          358.4                   373.4   
Diluted                        361.7                   375.9   
                                                                      
                                                                      
Reconciliation of
Adjusted Operating
Income and Adjusted
Operating Margin
GAAP Operating               $  400.6       12.3   %   $  347.5       11.2   %
Income (a)
Cost of Revenues                13.1        0.4    %      30.0        1.0    %
Charges (c)
Selling, General and
Administrative Costs            (0.6    )   0.0    %      (0.2    )   0.0    %
(Income), Net (d)
Restructuring and               30.4        0.9    %      29.9        1.0    %
Other Costs, Net (e)
Amortization of
Acquisition-related            194.1      6.0    %     186.7      6.0    %
Intangible Assets
                                                                      
Adjusted Operating           $  637.6      19.6   %   $  593.9      19.2   %
Income (b)
                                                                      
Reconciliation of
Adjusted Net Income
GAAP Net Income (a)          $  376.4       11.5   %   $  288.9       9.4    %
Cost of Revenues                13.1        0.4    %      30.0        1.0    %
Charges (c)
Selling, General and
Administrative Costs            (0.6    )   0.0    %      (0.2    )   0.0    %
(Income), Net (d)
Restructuring and               30.4        0.9    %      29.9        1.0    %
Other Costs, Net (e)
Amortization of
Acquisition-related             194.1       6.0    %      186.7       6.0    %
Intangible Assets
Amortization of
Acquisition-related             0.4         0.0    %      0.7         0.0    %
Intangible Assets –
Equity Investments
Other Income, Net               -           0.0    %      (17.8   )   -0.6   %
(f)
Provision for Income            (130.4  )   -4.0   %      (76.2   )   -2.5   %
Taxes (g)
Discontinued
Operations, Net of             9.4        0.3    %     3.6        0.1    %
Tax
                                                                      
Adjusted Net Income          $  492.8      15.1   %   $  445.6      14.4   %
(b)
                                                                      
Reconciliation of
Adjusted Earnings
per Share
GAAP EPS (a)                 $  1.04                   $  0.77
Cost of Revenues
Charges, Net of Tax             0.02                      0.06
(c)
Selling, General and
Administrative Costs            -                         (0.01   )
(income), Net of Tax
(d)
Restructuring and
Other Costs, Net of             0.05                      0.06
Tax (e)
Amortization of
Acquisition-related             0.37                      0.31
Intangible Assets,
Net of Tax
Amortization of
Acquisition-related
Intangible Assets,              -                         -
Net of Tax – Equity
Investments
Other Income, Net of            -                         (0.03   )
Tax (f)
(Benefit from)
Provision for Income            (0.15   )                 0.02
Taxes (g)
Discontinued
Operations, Net of             0.03                    0.01    
Tax
                                                                      
Adjusted EPS (b)             $  1.36                  $  1.19    
                                                                      
Reconciliation of
Free Cash Flow
GAAP Net Cash
Provided by                  $  660.1                  $  637.0
Operating Activities
(a)
Net Cash Used in
Discontinued                    7.2                       2.9
Operations
Purchases of
Property, Plant and             (104.4  )                 (80.7   )
Equipment
Proceeds from Sale
of Property, Plant             1.2                     2.0     
and Equipment
                                                                      
Free Cash Flow               $  564.1                 $  561.2   
                                                                      
Segment Data                 Three Months Ended
                             December 31,   % of       December 31,   % of
(In millions)            2012          Revenues  2011          Revenues
                                                                      
Revenues
Analytical                   $  1,105.8     33.9   %   $  1,079.5     34.9   %
Technologies
Specialty                       791.8       24.3   %      706.2       22.9   %
Diagnostics
Laboratory Products             1,499.8     46.0   %      1,435.3     46.5   %
and Services
Eliminations                   (138.1  )   -4.2   %     (131.7  )   -4.3   %
                                                                      
Consolidated                 $  3,259.3    100.0  %   $  3,089.3    100.0  %
Revenues
                                                                      
Operating Income and
Operating Margin
Analytical                   $  220.8       20.0   %   $  228.1       21.1   %
Technologies
Specialty                       205.0       25.9   %      169.4       24.0   %
Diagnostics
Laboratory Products            211.8      14.1   %     196.4      13.7   %
and Services
                                                                      
Subtotal Reportable             637.6       19.6   %      593.9       19.2   %
Segments
                                                                      
Cost of Revenues                (13.1   )   -0.4   %      (30.0   )   -1.0   %
Charges (c)
Selling, General and
Administrative                  0.6         0.0    %      0.2         0.0    %
(Costs) Income, Net
(d)
Restructuring and               (30.4   )   -0.9   %      (29.9   )   -1.0   %
Other Costs, Net (e)
Amortization of
Acquisition-related            (194.1  )   -6.0   %     (186.7  )   -6.0   %
Intangible Assets
                                                                      
GAAP Operating               $  400.6      12.3   %   $  347.5      11.2   %
Income (a)
                                                                      

      "GAAP" (reported) results were determined in accordance with U.S.
(a)  generally accepted accounting principles (GAAP). Results in all periods
      present the results of the laboratory workstations business as
      discontinued operations.
      
      Adjusted results are non-GAAP measures and for income measures exclude
      certain charges to cost of revenues (see note (c) for details); certain
      credits/charges to selling, general and administrative expenses (see
      note (d) for details); amortization of acquisition-related intangible
(b)   assets; restructuring and other costs, net (see note (e) for details);
      certain other gains or losses that are either isolated or cannot be
      expected to occur again with any regularity or predictability (see note
      (f) for details); the tax consequences of the preceding items and
      certain other tax items (see note (g) for details); and discontinued
      operations.
      
      Reported results in 2012 and 2011 include $12.4 and $29.0, respectively,
      of charges for the sale of inventories revalued at the date of
(c)   acquisition. Reported results in 2012 and 2011 also include $0.7 and
      $1.0, respectively, of accelerated depreciation on manufacturing assets
      to be abandoned due to facility consolidations.
      
      Reported results in 2012 include $1.1 of transaction costs related to
      the acquisition of One Lambda, offset by income, net, of $1.7 from
(d)   revisions of estimated contingent consideration for recent acquisitions.
      Reported results in 2011 include $1.0 of transaction costs, net related
      to the acquisition of Dionex, offset by $1.2 of income from revisions of
      estimated contingent consideration for recent acquisitions.
      
      Reported results in 2012 and 2011 include restructuring and other costs,
      net, consisting principally of severance, abandoned facility and other
      expenses of headcount reductions within several businesses and real
(e)   estate consolidations. Reported results in 2012 and 2011 include charges
      of $10.7 and $12.1, respectively, for impairment of intangible assets
      associated with several small business units. Reported results in 2012
      also include a $5.9 gain on a pre-acquisition litigation related-matter.
      
(f)   Reported results in 2011 include a $17.8 gain on sale of an equity
      investment accounted for under the cost method.
      
      Reported provision for income taxes includes i) $75.4 and $83.2 of
      incremental tax benefit in 2012 and 2011, respectively, for the pre-tax
      reconciling items between GAAP and adjusted net income; ii) in 2012,
(g)   $55.0 of incremental tax benefit from adjusting the company's deferred
      tax balances as a result of tax rate changes; and iii) in 2011, $7.0 of
      incremental tax provision from adjusting the company's deferred tax
      balances as a result of tax rate changes.
      
Notes:
      Consolidated depreciation expense in 2012 and 2011 is $60.3 and $58.9,
      respectively.
      Consolidated equity compensation expense included in both reported and
      adjusted results is $20.4 and $19.4 in 2012 and 2011, respectively.
      
      

Consolidated Statement of Income (a)(b)
                         Year Ended
                             December 31,  % of      December 31,  % of
(In millions except      2012          Revenues  2011          Revenues
per share amounts)
                                                                      
Revenues                     $ 12,509.9               $ 11,558.8 
Costs and Operating
Expenses:
Cost of revenues (c)           6,993.0      55.9   %     6,588.9      57.0   %
Selling, general and
administrative                 2,828.7      22.6   %     2,634.5      22.8   %
expenses (d)
Amortization of
acquisition-related            747.6        6.0    %     647.9        5.6    %
intangible assets
Research and                   376.4        3.0    %     340.2        2.9    %
development expenses
Restructuring and             82.1        0.7    %    96.5        0.9    %
other costs, net (e)
                              11,027.8    88.2   %    10,308.0    89.2   %
                                                                      
Operating Income               1,482.1      11.8   %     1,250.8      10.8   %
Interest Income                25.2                      26.8
Interest Expense               (241.6   )                (175.3   )
Other Income, Net             3.7                     30.5     
(f)
                                                                      
Income from
Continuing                     1,269.4                   1,132.8
Operations Before
Income Taxes
Provision for Income          (11.0    )               (109.4   )
Taxes (g)
                                                                      
Income from
Continuing                     1,258.4                   1,023.4
Operations
                                                                      
(Loss) Income from
Discontinued                   (19.2    )                1.7
Operations, Net of
Tax
(Loss) Gain on
Disposal of
Discontinued                  (61.3    )               304.8    
Operations, Net of
Tax
                                                                      
Net Income                   $ 1,177.9     9.4    %   $ 1,329.9     11.5   %
                                                                      
Earnings per Share
from Continuing
Operations:
                                                                      
Basic                        $ 3.46                   $ 2.69     
Diluted                      $ 3.43                   $ 2.66     
                                                                      
Earnings per Share:
                                                                      
Basic                        $ 3.24                   $ 3.49     
Diluted                      $ 3.21                   $ 3.46     
                                                                      
Weighted Average
Shares:
                                                                      
Basic                         363.8                   380.8    
Diluted                       366.6                   384.8    
                                                                      
                                                                      
Reconciliation of
Adjusted Operating
Income and Adjusted
Operating Margin
GAAP Operating               $ 1,482.1      11.8   %   $ 1,250.8      10.8   %
Income (a)
Cost of Revenues               55.6         0.4    %     72.6         0.6    %
Charges (c)
Selling, General and
Administrative                 12.5         0.1    %     61.5         0.5    %
Costs, Net (d)
Restructuring and              82.1         0.7    %     96.5         0.9    %
Other Costs, Net (e)
Amortization of
Acquisition-related           747.6       6.0    %    647.9       5.6    %
Intangible Assets
                                                                      
Adjusted Operating           $ 2,379.9     19.0   %   $ 2,129.3     18.4   %
Income (b)
                                                                      
Reconciliation of
Adjusted Net Income
GAAP Net Income (a)          $ 1,177.9      9.4    %   $ 1,329.9      11.5   %
Cost of Revenues               55.6         0.4    %     72.6         0.6    %
Charges (c)
Selling, General and
Administrative                 12.5         0.1    %     61.5         0.5    %
Costs, Net (d)
Restructuring and              82.1         0.7    %     96.5         0.9    %
Other Costs, Net (e)
Amortization of
Acquisition-related            747.6        6.0    %     647.9        5.6    %
Intangible Assets
Restructuring and
Other Costs, Net –             2.1          0.0    %     0.4          0.0    %
Equity Investments
Amortization of
Acquisition-related            2.7          0.0    %     2.9          0.0    %
Intangible Assets –
Equity Investments
Other Expense                  0.5          0.0    %     (35.1    )   -0.3   %
(Income), Net (f)
Provision for Income           (351.7   )   -2.8   %     (269.1   )   -2.3   %
Taxes (g)
Discontinued
Operations, Net of            80.5        0.7    %    (306.5   )   -2.6   %
Tax
                                                                      
Adjusted Net Income          $ 1,809.8     14.5   %   $ 1,601.0     13.9   %
(b)
                                                                      
Reconciliation of
Adjusted Earnings
per Share
GAAP EPS (a)                 $ 3.21                    $ 3.46
Cost of Revenues
Charges, Net of Tax            0.11                      0.13
(c)
Selling, General and
Administrative                 0.03                      0.13
Costs, Net of Tax
(d)
Restructuring and
Other Costs, Net of            0.15                      0.16
Tax (e)
Amortization of
Acquisition-related            1.36                      1.12
Intangible Assets,
Net of Tax
Restructuring and
Other Costs, Net of            -                         -
Tax – Equity
Investments
Amortization of
Acquisition-related
Intangible Assets,             -                         0.01
Net of Tax – Equity
Investments
Other Expense
(Income), Net of Tax           -                         (0.06    )
(f)
(Benefit from)
Provision for Income           (0.14    )                0.01
Taxes (g)
Discontinued
Operations, Net of            0.22                    (0.80    )
Tax
                                                                      
Adjusted EPS (b)             $ 4.94                   $ 4.16     
                                                                      
Reconciliation of
Free Cash Flow
GAAP Net Cash
Provided by                  $ 2,039.5                 $ 1,691.0
Operating Activities
(a)
Net Cash Used in
(Provided by)                  28.4                      (14.4    )
Discontinued
Operations
Purchases of
Property, Plant and            (315.1   )                (260.9   )
Equipment
Proceeds from Sale
of Property, Plant            12.8                    8.2      
and Equipment
                                                                      
Free Cash Flow               $ 1,765.6                $ 1,423.9  
                                                                      
Segment Data                 Year Ended
                             December 31,   % of       December 31,   % of
(In millions)            2012          Revenues  2011          Revenues
                                                                      
Revenues
Analytical                   $ 4,123.7      33.0   %   $ 3,845.4      33.3   %
Technologies
Specialty                      2,962.3      23.7   %     2,469.9      21.4   %
Diagnostics
Laboratory Products            5,990.0      47.9   %     5,762.9      49.9   %
and Services
Eliminations                  (566.1   )   -4.6   %    (519.4   )   -4.6   %
                                                                      
Consolidated                 $ 12,509.9    100.0  %   $ 11,558.8    100.0  %
Revenues
                                                                      
Operating Income and
Operating Margin
Analytical                   $ 772.7        18.7   %   $ 720.0        18.7   %
Technologies
Specialty                      761.2        25.7   %     598.4        24.2   %
Diagnostics
Laboratory Products           846.0       14.1   %    810.9       14.1   %
and Services
                                                                      
Subtotal Reportable            2,379.9      19.0   %     2,129.3      18.4   %
Segments
                                                                      
Cost of Revenues               (55.6    )   -0.4   %     (72.6    )   -0.6   %
Charges (c)
Selling, General and
Administrative                 (12.5    )   -0.1   %     (61.5    )   -0.5   %
Costs, Net (d)
Restructuring and              (82.1    )   -0.7   %     (96.5    )   -0.9   %
Other Costs, Net (e)
Amortization of
Acquisition-related           (747.6   )   -6.0   %    (647.9   )   -5.6   %
Intangible Assets
                                                                      
GAAP Operating               $ 1,482.1     11.8   %   $ 1,250.8     10.8   %
Income (a)
                                                                             

      "GAAP" (reported) results were determined in accordance with U.S.
(a)  generally accepted accounting principles (GAAP). Results in all periods
      present the results of the laboratory workstations business as
      discontinued operations.
      
      Adjusted results are non-GAAP measures and for income measures exclude
      certain charges to cost of revenues (see note (c) for details); certain
      credits/charges to selling, general and administrative expenses (see
      note (d) for details); amortization of acquisition-related intangible
(b)   assets; restructuring and other costs, net (see note (e) for details);
      certain other gains or losses that are either isolated or cannot be
      expected to occur again with any regularity or predictability (see note
      (f) for details); the tax consequences of the preceding items and
      certain other tax items (see note (g) for details); and discontinued
      operations.
      
      Reported results in 2012 and 2011 include $52.4 and $69.5, respectively,
      of charges for the sale of inventories revalued at the date of
(c)   acquisition. Reported results in 2012 and 2011 also include $3.2 and
      $3.1, respectively, of accelerated depreciation on manufacturing assets
      to be abandoned due to facility consolidations.
      
      Reported results in 2012 include $14.1 of transaction costs related to
      the acquisition of One Lambda, offset in part by income, net, of $1.4
      from revisions of estimated contingent consideration for recent
      acquisitions and a net gain of $0.2 associated with product liability
(d)   litigation. Reported results in 2011 include $59.7 of transaction costs
      related to the acquisitions of Phadia and Dionex and a $3.0 charge
      associated with product liability litigation, offset in part by $1.2 of
      income from revisions of estimated contingent consideration for recent
      acquisitions.
      
      Reported results in 2012 and 2011 include restructuring and other costs,
      net, consisting principally of severance, abandoned facility and other
      expenses of headcount reductions within several businesses and real
      estate consolidations. Reported results in 2012 and 2011 include charges
(e)   of $10.7 and $12.1, respectively, for impairment of intangible assets
      associated with several small business units. Reported results in 2012
      also include a $5.9 gain on a pre-acquisition litigation related-matter.
      Reported results in 2011 also include $21.2 of cash compensation from
      monetizing equity awards held by Dionex employees at the date of
      acquisition.
      
      Reported results in 2012 include $0.5 of loss on extinguishment of debt
      facilities associated with the termination and replacement of the
      company's prior revolving credit agreements. Reported results in 2011
(f)   include a gain of $27.6 on currency hedging contracts related to the
      acquisition of Phadia and repayment of its multi-currency debt and a
      $17.8 gain on sale of an equity investment accounted for under the cost
      method, offset in part by fees of $10.3 to obtain a short-term financing
      commitment related to the Phadia acquisition.
      
      Reported provision for income taxes includes i) $299.1 and $271.4 of
      incremental tax benefit in 2012 and 2011, respectively, for the pre-tax
      reconciling items between GAAP and adjusted net income; ii) in 2012,
      $52.6 of incremental tax benefit from adjusting the company's deferred
(g)   tax balances as a result of tax rate changes; and iii) in 2011, $11.7 of
      incremental tax provision from adjusting the company's deferred tax
      balances as a result of tax rate changes, $7.9 of incremental tax
      benefit from the ability to use tax loss carryforwards as a result of
      the Phadia acquisition and $1.5 of incremental tax benefit from
      resolution of tax audits.
      
Notes:
      Consolidated depreciation expense in 2012 and 2011 is $236.1 and $211.7,
      respectively.
      Consolidated equity compensation expense included in both reported and
      adjusted results is $78.2 and $80.0 in 2012 and 2011, respectively.
      
      

Condensed Consolidated Balance Sheet
                                                            
                                                   December 31,   December 31,
(In millions)                                  2012          2011
                                                                  
Assets
Current Assets:
Cash and cash equivalents                          $  851.0       $  1,016.3
Short-term investments                                4.3            4.3
Accounts receivable, net                              1,804.9        1,763.7
Inventories                                           1,443.3        1,330.1
Other current assets                                 691.1         707.5
                                                                  
Total current assets                                 4,794.6       4,821.9
                                                                  
Property, Plant and Equipment, Net                   1,726.4       1,611.3
                                                                  
Acquisition-related Intangible Assets                7,804.5       7,815.9
                                                                  
Other Assets                                         559.8         611.3
                                                                  
Goodwill                                             12,474.5      11,973.3
                                                                  
Total Assets                                       $  27,359.8    $  26,833.7
                                                                  
                                                                  
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current                 $  93.1        $  1,272.8
maturities of long-term obligations
Other current liabilities                            2,030.7       1,840.3
                                                                  
Total current liabilities                            2,123.8       3,113.1
                                                                  
Other Long-term Liabilities                          2,740.1       2,927.3
                                                                  
Long-term Obligations                                7,031.2       5,755.2
                                                                  
Total Shareholders' Equity                           15,464.7      15,038.1
                                                                  
Total Liabilities and Shareholders' Equity         $  27,359.8    $  26,833.7
                                                                     
                                                                     

Condensed Consolidated Statement of Cash Flows
                                                              
                                                                  
                                                   Year Ended
                                                   December 31,   December 31,
(In millions)                                    2012          2011
                                                                  
Operating Activities
Net income                                         $ 1,177.9      $ 1,329.9
Loss (income) from discontinued operations           19.2           (1.7     )
Loss (gain) on disposal of discontinued             61.3         (304.8   )
operations
Income from continuing operations                    1,258.4        1,023.4
                                                                  
Adjustments to reconcile income from
continuing operations
to net cash provided by operating activities:
Depreciation and amortization                        983.7          859.6
Change in deferred income taxes                      (307.4   )     (123.1   )
Other non-cash expenses, net                         161.7          182.1
Changes in assets and liabilities, excluding
the effects
of acquisitions and dispositions                    (28.5    )    (265.4   )
                                                                  
Net cash provided by continuing operations           2,067.9        1,676.6
Net cash (used in) provided by discontinued         (28.4    )    14.4     
operations
                                                                  
Net cash provided by operating activities           2,039.5      1,691.0  
                                                                  
Investing Activities
Acquisitions, net of cash acquired                   (1,083.4 )     (5,690.3 )
Purchases of property, plant and equipment           (315.1   )     (260.9   )
Proceeds from sale of property, plant and            12.8           8.2
equipment
Other investing activities, net                     1.1          54.9     
                                                                  
Net cash used in continuing operations               (1,384.6 )     (5,888.1 )
Net cash provided by discontinued operations        58.8         745.9    
                                                                  
Net cash used in investing activities               (1,325.8 )    (5,142.2 )
                                                                  
Financing Activities
Net proceeds from issuance of debt                   1,282.1        4,254.1
(Decrease) Increase in commercial paper, net         (849.3   )     899.3
Settlement of convertible debt                       -              (452.0   )
Redemption and repayment of long-term                (354.5   )     (1.4     )
obligations
Dividends paid                                       (142.2   )     -
Purchases of company common stock                    (1,150.0 )     (1,337.5 )
Net proceeds from issuance of company common         254.1          158.1
stock
Tax benefits from stock-based compensation           22.7           16.9
awards
Increase in short-term notes payable                 24.0           9.2
Other financing activities, net                     (4.6     )    3.9      
                                                                  
Net cash (used in) provided by financing            (917.7   )    3,550.6  
activities
                                                                  
Exchange Rate Effect on Cash                        38.7         (0.2     )
                                                                  
(Decrease) Increase in Cash and Cash                 (165.3   )     99.2
Equivalents
Cash and Cash Equivalents at Beginning of           1,016.3      917.1    
Period
                                                                  
Cash and Cash Equivalents at End of Period         $ 851.0       $ 1,016.3  
                                                                  
Free Cash Flow (a)                                 $ 1,765.6      $ 1,423.9

(a) Free cash flow is net cash provided by operating activities of continuing
operations less net purchases of property, plant and equipment.

Contact:

Thermo Fisher Scientific Inc.
Media Contact Information:
Karen Kirkwood, 781-622-1306
karen.kirkwood@thermofisher.com
www.thermofisher.com
or
Investor Contact Information:
Ken Apicerno, 781-622-1294
ken.apicerno@thermofisher.com