UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarter Ended OctoberJuly 2, 20212022 or
☐ 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)
Delaware04-2209186
(State of incorporation)(I.R.S. Employer Identification No.)

168 Third Avenue
Waltham, Massachusetts 02451
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (781) 622-1000
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $1.00 par valueTMONew York Stock Exchange
0.750% Notes due 2024TMO 24ANew York Stock Exchange
0.125% Notes due 2025TMO 25BNew York Stock Exchange
2.000% Notes due 2025TMO 25New York Stock Exchange
1.400% Notes due 2026TMO 26ANew York Stock Exchange
1.450% Notes due 2027TMO 27New York Stock Exchange
1.750% Notes due 2027TMO 27BNew York Stock Exchange
0.500% Notes due 2028TMO 28ANew York Stock Exchange
1.375% Notes due 2028TMO 28New York Stock Exchange
1.950% Notes due 2029TMO 29New York Stock Exchange
0.875% Notes due 2031TMO 31New York Stock Exchange
2.375% Notes due 2032TMO 32New York Stock Exchange
2.875% Notes due 2037TMO 37New York Stock Exchange
1.500% Notes due 2039TMO 39New York Stock Exchange
1.875% Notes due 2049TMO 49New York Stock Exchange
Indicate by check mark whether the Registrantregistrant: (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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒  No ☐
Indicate by check mark whether the Registrantregistrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months.months (or for such shorter period that the registrant was required to submit such files). Yes ☒  No ☐
Indicate by check mark whether the Registrantregistrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company”company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ☒                                              Accelerated filer ☐                                       Non-accelerated filer ☐
Smaller reporting company ☐                                      Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐
Indicate by check mark whether the Registrantregistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒
As of OctoberJuly 2, 2021,2022, the Registrant had 394,048,087391,788,962 shares of Common Stock outstanding.



THERMO FISHER SCIENTIFIC INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED OCTOBERJULY 2, 20212022
TABLE OF CONTENTS
Page
PART I
3
2321
3230
3230
PART II
3331
3331
3431
3531

2

THERMO FISHER SCIENTIFIC INC.
PART I    FINANCIAL INFORMATION
Item 1.    Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEET
(Unaudited)
 October 2,December 31,
(In millions except share and per share amounts)20212020
Assets
Current Assets:
Cash and cash equivalents$12,027 $10,325 
Accounts receivable, less allowances of $138 and $1355,557 5,741 
Inventories4,906 4,029 
Contract assets, net808 731 
Other current assets1,426 1,131 
Total current assets24,724 21,957 
Property, Plant and Equipment, Net7,049 5,912 
Acquisition-related Intangible Assets, Net11,927 12,685 
Other Assets2,991 2,457 
Goodwill26,909 26,041 
Total Assets$73,600 $69,052 
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current maturities of long-term obligations$19 $2,628 
Accounts payable2,301 2,175 
Accrued payroll and employee benefits1,816 1,916 
Contract liabilities1,442 1,271 
Other accrued expenses2,175 2,314 
Total current liabilities7,753 10,304 
Deferred Income Taxes1,465 1,794 
Other Long-term Liabilities3,984 3,340 
Long-term Obligations21,688 19,107 
Shareholders' Equity:
Preferred stock, $100 par value, 50,000 shares authorized; none issued00
Common stock, $1 par value, 1,200,000,000 shares authorized; 438,749,893 and 437,088,297 shares issued439 437 
Capital in excess of par value15,960 15,579 
Retained earnings33,876 28,116 
Treasury stock at cost, 44,701,806 and 40,417,789 shares(8,911)(6,818)
Accumulated other comprehensive items(2,654)(2,807)
Total shareholders' equity38,710 34,507 
Total Liabilities and Shareholders' Equity$73,600 $69,052 

 July 2,December 31,
(In millions except share and per share amounts)20222021
Assets
Current assets:
Cash and cash equivalents$1,888 $4,477 
Accounts receivable, less allowances of $177 and $1507,745 7,977 
Inventories5,668 5,051 
Contract assets, net1,147 968 
Other current assets1,652 1,640 
Total current assets18,100 20,113 
Property, plant and equipment, net8,529 8,333 
Acquisition-related intangible assets, net18,578 20,113 
Other assets4,306 4,640 
Goodwill41,066 41,924 
Total assets$90,579 $95,123 
Liabilities, redeemable noncontrolling interest and equity
Current liabilities:
Short-term obligations and current maturities of long-term obligations$1,010 $2,537 
Accounts payable2,586 2,867 
Accrued payroll and employee benefits1,722 2,427 
Contract liabilities2,722 2,655 
Other accrued expenses2,957 2,950 
Total current liabilities10,997 13,436 
Deferred income taxes3,327 3,837 
Other long-term liabilities4,534 4,540 
Long-term obligations29,250 32,333 
Redeemable noncontrolling interest117 122 
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; 439,863,357 and 439,154,741 shares issued440 439 
Capital in excess of par value16,467 16,174 
Retained earnings39,074 35,431 
Treasury stock at cost, 48,074,395 and 44,720,112 shares(10,964)(8,922)
Accumulated other comprehensive items(2,724)(2,329)
Total Thermo Fisher Scientific Inc. shareholders’ equity42,293 40,793 
Noncontrolling interests61 62 
Total equity42,354 40,855 
Total liabilities, redeemable noncontrolling interest and equity$90,579 $95,123 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


THERMO FISHER SCIENTIFIC INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
Three Months EndedNine Months EndedThree months endedSix months ended
October 2,September 26,October 2,September 26,July 2,July 3,July 2,July 3,
(In millions except per share amounts)(In millions except per share amounts)2021202020212020(In millions except per share amounts)2022202120222021
RevenuesRevenuesRevenues
Product revenuesProduct revenues$7,360 $6,782 $22,430 $16,662 Product revenues$7,003 $7,214 $15,020 $15,070 
Service revenuesService revenues1,970 1,739 6,079 5,006 Service revenues3,967 2,059 7,768 4,109 
Total revenuesTotal revenues9,330 8,521 28,509 21,668 Total revenues10,970 9,273 22,788 19,179 
Costs and Operating Expenses:
Costs and operating expenses:Costs and operating expenses:
Cost of product revenuesCost of product revenues3,298 3,001 9,977 7,732 Cost of product revenues3,516 3,352 7,071 6,679 
Cost of service revenuesCost of service revenues1,381 1,189 4,148 3,488 Cost of service revenues2,855 1,397 5,654 2,767 
Selling, general and administrative expensesSelling, general and administrative expenses2,004 1,592 5,729 4,853 Selling, general and administrative expenses2,209 1,899 4,486 3,725 
Research and development expensesResearch and development expenses351 296 1,014 805 Research and development expenses365 343 729 663 
Restructuring and other costsRestructuring and other costs18 17 151 67 Restructuring and other costs24 119 26 133 
Total costs and operating expensesTotal costs and operating expenses7,052 6,095 21,019 16,945 Total costs and operating expenses8,969 7,110 17,966 13,967 
Operating Income2,278 2,426 7,490 4,723 
Interest Income9 9 32 53 
Interest Expense(128)(144)(375)(407)
Other Income (Expense)14 (39)(174)(36)
Income Before Income Taxes2,173 2,252 6,973 4,333 
Provision for Income Taxes(271)(319)(906)(456)
Net Income$1,902 $1,933 $6,067 $3,877 
Operating incomeOperating income2,001 2,163 4,822 5,212 
Interest incomeInterest income36 11 54 23 
Interest expenseInterest expense(148)(122)(284)(247)
Other income/(expense)Other income/(expense)28 (3)(135)(186)
Income before income taxesIncome before income taxes1,917 2,049 4,457 4,802 
Provision for income taxesProvision for income taxes(198)(219)(499)(635)
Equity in earnings/(losses) of unconsolidated entitiesEquity in earnings/(losses) of unconsolidated entities(51)(1)(70)(1)
Net incomeNet income1,668 1,829 3,888 4,166 
Less: net income attributable to noncontrolling interests and redeemable noncontrolling interestLess: net income attributable to noncontrolling interests and redeemable noncontrolling interest4 1 9 1 
Net income attributable to Thermo Fisher Scientific Inc.Net income attributable to Thermo Fisher Scientific Inc.$1,664 $1,828 $3,879 $4,165 
Earnings per Share
Earnings per share attributable to Thermo Fisher Scientific Inc.Earnings per share attributable to Thermo Fisher Scientific Inc.
BasicBasic$4.83 $4.88 $15.41 $9.79 Basic$4.25 $4.65 $9.90 $10.58 
DilutedDiluted$4.79 $4.84 $15.29 $9.71 Diluted$4.22 $4.61 $9.83 $10.50 
Weighted Average Shares
Weighted average sharesWeighted average shares
BasicBasic394 396 394 396 Basic392 393 392 394 
DilutedDiluted397 399 397 399 Diluted394 396 394 397 

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

4

THERMO FISHER SCIENTIFIC INC.
 CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
 Three Months EndedNine Months Ended
 October 2,September 26,October 2,September 26,
(In millions)2021202020212020
Comprehensive Income
Net Income$1,902 $1,933 $6,067 $3,877 
Other Comprehensive Items:
Currency translation adjustment:
Currency translation adjustment (net of tax provision (benefit) of $74, $(76), $169 and $(71))(32)10 121 (244)
Unrealized gains and losses on hedging instruments:
Unrealized losses on hedging instruments (net of tax benefit of $0, $0, $0 and $20)— — — (65)
Reclassification adjustment for losses included in net income (net of tax benefit of $0, $2, $5 and $4)2 6 16 10 
Pension and other postretirement benefit liability adjustments:
Pension and other postretirement benefit liability adjustments arising during the period (net of tax (provision) benefit of $(1), $1, $(3) and $2)3 (4)7 (5)
Amortization of net loss included in net periodic pension cost (net of tax benefit of $2, $1, $4 and $4)3 7 9 13 
Total other comprehensive items(24)19 153 (291)
Comprehensive Income$1,878 $1,952 $6,220 $3,586 
 Three months endedSix months ended
 July 2,July 3,July 2,July 3,
(In millions)2022202120222021
Comprehensive income
Net income$1,668 $1,829 $3,888 $4,166 
Other comprehensive items:
Currency translation adjustment:
Currency translation adjustment (net of tax provision (benefit) of $173, $(23), $262 and $95)(386)(71)(416)153 
Unrealized gains and losses on hedging instruments:
Reclassification adjustment for losses included in net income (net of tax benefit of $1, $1, $1 and $5)— 1 1 14 
Pension and other postretirement benefit liability adjustments:
Pension and other postretirement benefit liability adjustments arising during the period (net of tax (provision) benefit of $(2), $0, $(3) and $(2))6 (2)9 4 
Amortization of net loss included in net periodic pension cost (net of tax benefit of $1, $1, $2 and $2)2 4 4 6 
Total other comprehensive items(378)(68)(402)177 
Comprehensive income1,290 1,761 3,486 4,343 
Less: comprehensive income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest7 1 2 1 
Comprehensive income attributable to Thermo Fisher Scientific Inc.$1,283 $1,760 $3,484 $4,342 

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

5

THERMO FISHER SCIENTIFIC INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Nine Months Ended Six months ended
October 2,September 26, July 2,July 3,
(In millions)(In millions)20212020(In millions)20222021
Operating Activities
Operating activitiesOperating activities
Net incomeNet income$6,067 $3,877 Net income$3,888 $4,166 
Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipmentDepreciation of property, plant and equipment614 467 Depreciation of property, plant and equipment486 409 
Amortization of acquisition-related intangible assetsAmortization of acquisition-related intangible assets1,295 1,256 Amortization of acquisition-related intangible assets1,209 872 
Change in deferred income taxesChange in deferred income taxes(455)(496)Change in deferred income taxes(601)(307)
Loss on early extinguishment of debtLoss on early extinguishment of debt197 — Loss on early extinguishment of debt26 197 
Stock-based compensationStock-based compensation153 145 Stock-based compensation155 102 
Other non-cash expenses, netOther non-cash expenses, net194 209 Other non-cash expenses, net291 213 
Changes in assets and liabilities, excluding the effects of acquisitionsChanges in assets and liabilities, excluding the effects of acquisitions(1,210)(508)Changes in assets and liabilities, excluding the effects of acquisitions(1,724)(1,447)
Net cash provided by operating activitiesNet cash provided by operating activities6,855 4,950 Net cash provided by operating activities3,730 4,205 
Investing Activities  
Investing activitiesInvesting activities  
Acquisitions, net of cash acquiredAcquisitions, net of cash acquired(1,519)(3)Acquisitions, net of cash acquired(40)(1,425)
Purchase of property, plant and equipmentPurchase of property, plant and equipment(1,692)(888)Purchase of property, plant and equipment(1,146)(1,168)
Proceeds from sale of property, plant and equipmentProceeds from sale of property, plant and equipment9 7 Proceeds from sale of property, plant and equipment14 5 
Other investing activities, netOther investing activities, net(38)— Other investing activities, net83 (36)
Net cash used in investing activitiesNet cash used in investing activities(3,240)(884)Net cash used in investing activities(1,089)(2,624)
Financing Activities
Net proceeds from issuance of debt3,122 3,464 
Financing activitiesFinancing activities
Repayment of debtRepayment of debt(2,807)(712)Repayment of debt(375)(2,803)
Proceeds from issuance of commercial paperProceeds from issuance of commercial paper— 383 Proceeds from issuance of commercial paper1,032 — 
Repayments of commercial paperRepayments of commercial paper— (387)Repayments of commercial paper(3,490)— 
Purchases of company common stockPurchases of company common stock(2,000)(1,500)Purchases of company common stock(2,000)(2,000)
Dividends paidDividends paid(292)(250)Dividends paid(220)(190)
Net proceeds from issuance of company common stock under employee stock plansNet proceeds from issuance of company common stock under employee stock plans101 156 Net proceeds from issuance of company common stock under employee stock plans51 72 
Other financing activities, netOther financing activities, net(10)(146)Other financing activities, net(48)(5)
Net cash (used in) provided by financing activities(1,886)1,008 
Net cash used in financing activitiesNet cash used in financing activities(5,050)(4,926)
Exchange Rate Effect on Cash(17)74 
Increase in Cash, Cash Equivalents and Restricted Cash1,712 5,148 
Cash, Cash Equivalents and Restricted Cash at Beginning of Period10,336 2,422 
Cash, Cash Equivalents and Restricted Cash at End of Period$12,048 $7,570 
Exchange rate effect on cashExchange rate effect on cash(177)44 
Decrease in cash, cash equivalents and restricted cashDecrease in cash, cash equivalents and restricted cash(2,586)(3,301)
Cash, cash equivalents and restricted cash at beginning of periodCash, cash equivalents and restricted cash at beginning of period4,491 10,336 
Cash, cash equivalents and restricted cash at end of periodCash, cash equivalents and restricted cash at end of period$1,905 $7,035 

The accompanying notes are an integral part of these condensed consolidated financial statements.
6

THERMO FISHER SCIENTIFIC INC.
CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS'REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
(Unaudited)
 Common StockCapital in Excess of Par ValueRetained EarningsTreasury StockAccumulated Other Comprehensive ItemsTotal Shareholders' Equity
(In millions)SharesAmountSharesAmount
Three Months Ended October 2, 2021
Balance at July 3, 2021438 $438 $15,826 $32,076 45 $(8,856)$(2,630)$36,854 
Issuance of shares under employees' and directors' stock plans1 1 83 — — (55)— 29 
Stock-based compensation— — 51 — — — — 51 
Dividends declared ($0.26 per share)— — — (102)— — — (102)
Net income— — — 1,902 — — — 1,902 
Other comprehensive items— — — — — — (24)(24)
Balance at October 2, 2021439 $439 $15,960 $33,876 45 $(8,911)$(2,654)$38,710 
Three Months Ended September 26, 2020
Balance at June 27, 2020436 $436 $15,334 $23,860 40 $(6,766)$(2,989)$29,875 
Issuance of shares under employees' and directors' stock plans1 1 81 — — (49)— 33 
Stock-based compensation— — 52 — — — — 52 
Dividends declared ($0.22 per share)— — — (88)— — — (88)
Net income— — — 1,933 — — — 1,933 
Other comprehensive items— — — — — — 19 19 
Balance at September 26, 2020437 $437 $15,467 $25,705 40 $(6,815)$(2,970)$31,824 
Nine Months Ended October 2, 2021
Balance at December 31, 2020437 $437 $15,579 $28,116 40 $(6,818)$(2,807)$34,507 
Issuance of shares under employees' and directors' stock plans2 2 228 — 1 (93)— 137 
Stock-based compensation— — 153 — — — — 153 
Purchases of company common stock— — — — 4 (2,000)— (2,000)
Dividends declared ($0.78 per share)— — — (307)— — — (307)
Net income— — — 6,067 — — — 6,067 
Other comprehensive items— — — — — — 153 153 
Balance at October 2, 2021439 $439 $15,960 $33,876 45 $(8,911)$(2,654)$38,710 
Nine Months Ended September 26, 2020
Balance at December 31, 2019434 $434 $15,064 $22,092 36 $(5,236)$(2,679)$29,675 
Cumulative effect of accounting change— — — (1)— — — (1)
Issuance of shares under employees' and directors' stock plans3 3 258 — — (79)— 182 
Stock-based compensation— — 145 — — — — 145 
Purchases of company common stock— — — — 4 (1,500)— (1,500)
Dividends declared ($0.66 per share)— — — (263)— — — (263)
Net income— — — 3,877 — — — 3,877 
Other comprehensive items— — — — — — (291)(291)
Balance at September 26, 2020437 $437 $15,467 $25,705 40 $(6,815)$(2,970)$31,824 
 Redeemable Noncontrolling InterestCommon StockCapital in Excess of Par ValueRetained EarningsTreasury StockAccumulated Other Comprehensive ItemsTotal
Thermo Fisher Scientific Inc. Shareholders’ Equity		Noncontrolling InterestsTotal Equity
(In millions)SharesAmountSharesAmount
Three months ended July 2, 2022
Balance at April 2, 2022$113 440 $440 $16,292 $37,528 48 $(10,961)$(2,343)$40,956 $62 $41,018 
Issuance of shares under employees' and directors' stock plans— — — 98 — — (3)— 95 — 95 
Stock-based compensation— — — 77 — — — — 77 — 77 
Dividends declared ($0.30 per share)— — — — (118)— — — (118)— (118)
Net income4 — — — 1,664 — — — 1,664 — 1,664 
Other comprehensive items4 — — — — — — (381)(381)(1)(382)
Contributions from (distributions to) noncontrolling interests(4)— — — — — — — — — — 
Balance at July 2, 2022$117 440 $440 $16,467 $39,074 48 $(10,964)$(2,724)$42,293 $61 $42,354 
Three months ended July 3, 2021
Balance at April 3, 2021$— 438 $438 $15,684 $30,350 45 $(8,852)$(2,562)$35,058 $10 $35,068 
Issuance of shares under employees' and directors' stock plans— — — 91 — — (4)— 87 — 87 
Stock-based compensation— — — 51 — — — — 51 — 51 
Dividends declared ($0.26 per share)— — — — (102)— — — (102)— (102)
Net income— — — — 1,828 — — — 1,828 1 1,829 
Other comprehensive items— — — — — — — (68)(68)— (68)
Contributions from (distributions to) noncontrolling interests— — — — — — — — — 36 36 
Balance at July 3, 2021$— 438 $438 $15,826 $32,076 45 $(8,856)$(2,630)$36,854 $47 $36,901 

The accompanying notes are an integral part of these condensed consolidated financial statements.
7

THERMO FISHER SCIENTIFIC INC.
CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY (Continued)
(Unaudited)
 Redeemable Noncontrolling InterestCommon StockCapital in Excess of Par ValueRetained EarningsTreasury StockAccumulated Other Comprehensive ItemsTotal
Thermo Fisher Scientific Inc. Shareholders’ Equity		Noncontrolling InterestsTotal Equity
(In millions)SharesAmountSharesAmount
Six months ended July 2, 2022
Balance at December 31, 2021$122 439 $439 $16,174 $35,431 45 $(8,922)$(2,329)$40,793 $62 $40,855 
Issuance of shares under employees' and directors' stock plans— 1 1 138 — — (42)— 97 — 97 
Stock-based compensation— — — 155 — — — — 155 — 155 
Purchases of company common stock— — — — — 3 (2,000)— (2,000)— (2,000)
Dividends declared ($0.60 per share)— — — — (236)— — — (236)— (236)
Net income9 — — — 3,879 — — — 3,879 — 3,879 
Other comprehensive items(7)— — — — — — (395)(395)— (395)
Contributions from (distributions to) noncontrolling interests(7)— — — — — — — — (1)(1)
Balance at July 2, 2022$117 440 $440 $16,467 $39,074 48 $(10,964)$(2,724)$42,293 $61 $42,354 
Six months ended July 3, 2021
Balance at December 31, 2020$— 437 $437 $15,579 $28,116 40 $(6,818)$(2,807)$34,507 $10 $34,517 
Issuance of shares under employees' and directors' stock plans— 1 1 145 — 1 (38)— 108 — 108 
Stock-based compensation— — — 102 — — — — 102 — 102 
Purchases of company common stock— — — — — 4 (2,000)— (2,000)— (2,000)
Dividends declared ($0.52 per share)— — — — (205)— — — (205)— (205)
Net income— — — — 4,165 — — — 4,165 1 4,166 
Other comprehensive items— — — — — — — 177 177 — 177 
Contributions from (distributions to) noncontrolling interests— — — — — — — — — 36 36 
Balance at July 3, 2021$— 438 $438 $15,826 $32,076 45 $(8,856)$(2,630)$36,854 $47 $36,901 

The accompanying notes are an integral part of these condensed consolidated financial statements.
8

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

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 therapies,the development and increase laboratory productivity.manufacture of life-changing therapies. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics.
Interim Financial Statements
The interim condensed consolidated financial statements presented herein have been prepared by the company, are unaudited and, in the opinion of management, reflect all adjustments of a normal recurring nature necessary for a fair statement of the financial position at OctoberJuly 2, 2021,2022, the results of operations for the three- and nine-monthsix-month periods ended OctoberJuly 2, 20212022 and September 26, 2020,July 3, 2021, and the cash flows for the nine-monthsix-month periods ended OctoberJuly 2, 20212022 and September 26, 2020.July 3, 2021. Interim results are not necessarily indicative of results for a full year.
The condensed consolidated balance sheet presented as of December 31, 2020,2021, has been derived from the audited consolidated financial statements as of that date. The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain all information that is included in the annual financial statements and notes thereto of the company. The condensed consolidated financial statements and notes included in this report should be read in conjunction with the 20202021 financial statements and notes included in the company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC). Certain reclassifications of prior year amounts have been made to conform to the current year presentation.
Note 1 to the consolidated financial statements for 20202021 describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no material changes in the company’s significant accounting policies during the ninesix months ended OctoberJuly 2, 2021.2022.
Inventories
The components of inventories are as follows:
October 2,December 31,
(In millions)20212020
Raw Materials$1,840 $1,305 
Work in Process680 540 
Finished Goods2,386 2,184 
Inventories$4,906 $4,029 
Prior to the third quarter of 2021, certain of the company’s businesses utilized the last-in, first-out (LIFO) method of accounting for inventories. During the third quarter of 2021, these businesses, which comprise approximately 5% of consolidated inventories, changed from the LIFO method to the first-in, first-out (FIFO) method. The company believes this change is preferable as it will provide a consistent, uniform costing method for all inventories across the company, better reflect the current value of inventories, and improve comparability with peers. Prior financial statements have not been retrospectively adjusted due to immateriality. The cumulative pre-tax effect of this change in accounting principle of $33 million was recorded as an increase to inventories and a decrease to cost of product revenues in the third quarter of 2021. This change was recorded in the Laboratory Products and Services ($20 million) and Specialty Diagnostics ($13 million) segments.
July 2,December 31,
(In millions)20222021
Raw materials$2,335 $1,922 
Work in process699 676 
Finished goods2,634 2,453 
Inventories$5,668 $5,051 
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. Risks and uncertaintiesThe negative impacts associated with the ongoing COVID-19 global pandemic materially adversely affected certain of the company’s businesses in 2020, particularly in the Analytical Instruments segment and, to a lesser extent, some businesses within the other three
8

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
segments. The negative impacts have significantly lessened so far in 2021.2021 and 2022. The extent and duration of negative impacts in the future, which may include inflationary pressures and supply chain disruptions, are uncertain and may require changes to estimates. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In OctoberNovember 2021, the FASB amendedissued new guidance to recognizerequire entities to disclose information about certain types of government assistance they receive, including cash grants and measure contract assets and contract liabilities acquired in a business combination. Generally, thistax credits. Among other things, the new guidance will result inrequires expanded disclosure regarding the company recognizing contract assetsqualitative and contract liabilities atquantitative characteristics of the same amounts recorded by the acquiree.nature, amount, timing, and significant terms and conditions of transactions with a government arising from a grant or other forms of assistance accounted for under a contribution model. The company will adopt this guidance in the fourth quarter of 2021 retrospectively to all business combinations completed in the first three quarters of 2021 and prospectively to all future business combinations. The adoption of this guidance will not have a material impact on the company’s consolidated financial statements for prior acquisitions; however, the impact in future periods will be dependent on the contract assets and contract liabilities acquired in future business combinations.
In July 2021, the FASB amended guidance to require lessors to classify leases as operating leases if they have certain variable lease payment structures and would have selling losses if they were classified as sales-type or direct financing leases. The company adopted the guidance in the third quarter of 20212022 using a prospective method. The adoption of this guidance didis not expected to have a material impact on the company’s consolidated financial statements.
In December 2019, the FASB issued new guidance to simplify the accounting for income taxes. Among other things, the new guidance requires the effects of enacted changes in tax laws or rates to be reflected in the annual effective tax rate computation in the interim period that includes the enactment date. The company adopted this guidance in 2021 using a prospective method. The adoption of this guidance did not have a material impact on the company’s consolidated financial statements;disclosures; however, the impact in future periods will be dependent on the extent of future events or conditions that would be affected such as enacted changes in tax laws or rates.transactions of this nature entered into by the company.
9

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 2.    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 workforce.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;products and services; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.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.
Pending Acquisition2022
On April 15, 2021,In 2022, the company entered into a definitive agreement under which it will acquire PPD, Inc. for $47.50 per share for a total cash purchase price of $17.4 billion plus the assumption of approximately $3.5 billion of net debt. PPD provides a broad range of clinical research and specialized laboratory services to enable customers to accelerate innovation and increase drug development productivity. Upon close of the transaction, PPD will become part of the Laboratory Products and Services Segment. Shareholders holding in aggregate approximately 60% of the issued and outstanding shares of common stock of PPD on April 15, 2021, have approved the transaction by written consent. No further action by other PPD shareholders is required to approve the transaction. On July 16, 2021, the company and PPD each received a request for additional information and documentary materials (collectively, the “Second Request”) from the U.S. Federal Trade Commission (FTC), in connection with the FTC’s review of the proposed merger. The effect of the Second Request is to extend the waiting period imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), until the 30th day after substantial compliance by the company and PPD with the Second Request, unless the waiting period is terminated earlier by the FTC. As of October 22, 2021, both the company and PPD had certified substantial compliance with the Second Request. The transaction remains subject to the satisfaction of customary closing conditions, including termination of the HSR Act waiting period and receipt of applicable regulatory approvals outside the U.S. Subject to the satisfaction of the required closing conditions, we continue to expect the merger to be completed by the end of 2021.
9

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
2021
On January 15, 2021, the company acquired, within the Laboratory Products and Services segment, the Belgium-based European viral vector manufacturing business of Groupe Novasep SAS for $834 million in net cash consideration. The European viral vector manufacturing business provides manufacturing services for vaccines and therapies to biotechnology companies and large biopharma customers. The acquisition expands the segment’s capabilities for cell and gene vaccines and therapies. The goodwill recorded as a result of this business combination is not tax deductible.
On February 25, 2021, the company acquired, within the Life Sciences Solutions segment, Mesa Biotech, Inc., a U.S.-based molecular diagnostic company, for $409 million in net cash consideration and contingent consideration with an initial fair value of $65 million due upon the completion of certain milestones. Mesa Biotech has developed and commercialized a polymerase chain reaction (PCR) based rapid point-of-care testing platform available for detecting infectious diseases including COVID-19. The acquisition enables the company to accelerate the availability of reliable and accurate advanced molecular diagnostics at the point of care. The goodwill recorded as a result of this business combination is not tax deductible.
On September 30, 2021, the company assumed operating responsibility, within the Laboratory Products and Services segment, of a new state-of-the-art biologics manufacturing facility in Lengnau, Switzerland from CSL Limited to perform pharma services for CSL with capacity to serve other customers as well. The company expects to make fixed lease payments aggregating to $555 million (excluding renewals) from 2021 to 2041, with additional amounts dependent on the extent of revenues from customers of the facility other than CSL. The goodwill recorded as a result of this business combination is not tax deductible.
In addition, in the first nine months of 2021, the company acquired, within the Life Sciences Solutions segment, cell sorting technology assets, an Ireland-based life sciences distributor and a developer of a digital PCR platform and, within the Analytical Instruments segment, a Belgium-basedU.S.-based developer of micro-chip based technology for liquid chromatography columns.Fourier-transform infrared gas analysis technologies.
The components of the purchase prices and the allocations to the net assets acquired for 2021 acquisitions are as follows:
(In millions)European Viral Vector BusinessMesa BiotechLengnau biologics manufacturing facilityOther
Purchase Price
Cash paid$853 $423 $— $287 
Fair value of contingent consideration— 65 1 113 
Purchase price payable— — 17 — 
Cash acquired(19)(14)— (11)
$834 $474 $18 $389 
Net Assets Acquired
Current assets$39 $54 $— $10 
Property, plant and equipment59 2 92 3 
Definite-lived intangible assets:
Customer relationships302 — — 2 
Product technology25 279 — 220 
Tradenames— 2 — 3 
Goodwill603 239 18 190 
Other assets4 4 361 — 
Contract liabilities(59)— — (1)
Deferred tax liabilities(80)(72)— (28)
Finance lease liabilities(24)(1)(82)— 
Other liabilities assumed(35)(33)(371)(10)
$834 $474 $18 $389 
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THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
The weighted-average amortization periods for definite-lived intangible assets acquired in 2021 are 14 years for customer relationships, 7 years for product technology and 3 years for tradenames. The weighted average amortization period for all definite-lived intangible assets acquired in 2021 is 9 years.
The allocationpreliminary allocations of the purchase price for the acquisitions of the Lengnau biologics manufacturing facility, is preliminary, principallyPPD, Inc. and PeproTech, Inc. were based on estimates of the fair values of the net assets acquired and are subject to adjustment upon finalization, largely with respect to acquired intangible assets, lease assets and liabilities, as well asand the related deferred taxes. Measurements of these items inherently require significant estimates and assumptions. During the first six months of 2022, the company adjusted the preliminary allocations of PPD and PeproTech, which among others increased goodwill ($95 million) and other liabilities assumed ($22 million), and decreased definite-lived intangible assets ($43 million), other current assets ($34 million), contract liabilities ($29 million), equity method investments ($23 million), and the fair value of assumed contingent consideration ($18 million). The adjustment to amortization expense recorded during the first six months of 2022 was not material.

Note 3.    Revenues and Contract-related Balances
Disaggregated Revenues
Revenues by type are as follows:
Three Months Ended Nine Months EndedThree months ended Six months ended
October 2,September 26,October 2,September 26,July 2,July 3,July 2,July 3,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
RevenuesRevenuesRevenues
ConsumablesConsumables5,544 4,956 $16,880 $12,214 Consumables$4,993 $5,372 $11,103 $11,336 
InstrumentsInstruments1,816 1,826 5,550 4,448 Instruments2,010 1,842 3,917 3,734 
ServicesServices1,970 1,739 6,079 5,006 Services3,967 2,059 7,768 4,109 
Consolidated revenuesConsolidated revenues$9,330 $8,521 $28,509 $21,668 Consolidated revenues$10,970 $9,273 $22,788 $19,179 
Revenues by geographic region based on customer location are as follows:
Three Months EndedNine Months EndedThree months endedSix months ended
October 2,September 26,October 2,September 26,July 2,July 3,July 2,July 3,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
RevenuesRevenuesRevenues
North AmericaNorth America$4,662 $4,587 $14,292 $11,418 North America$6,032 $4,529 $12,355 $9,630 
EuropeEurope2,557 2,032 8,037 5,464 Europe2,551 2,695 5,601 5,480 
Asia-PacificAsia-Pacific1,836 1,607 5,294 4,054 Asia-Pacific2,042 1,749 4,106 3,458 
Other regionsOther regions275 295 886 732 Other regions345 300 726 611 
Consolidated revenuesConsolidated revenues$9,330 $8,521 $28,509 $21,668 Consolidated revenues$10,970 $9,273 $22,788 $19,179 
Each reportable segment earns revenues from consumables, instruments and services in North America, Europe, Asia-Pacific and other regions. See Note 4 for revenues by reportable segment and other geographic data.
10

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Remaining Performance Obligations
The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of OctoberJuly 2, 20212022 was $14.49$27.70 billion. The company will recognize revenues for these performance obligations as they are satisfied, approximately 76%58% 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.
Contract-related Balances
Noncurrent contract assets are included within other assets in the accompanying balance sheet. Noncurrent contract liabilities are included within other long-term liabilities in the accompanying balance sheet. Contract asset and liability balances are as follows:
October 2,December 31,
(In millions)20212020
Current Contract Assets, Net$808 $731 
Noncurrent Contract Assets, Net11 11 
Current Contract Liabilities1,442 1,271 
Noncurrent Contract Liabilities822 763 
11

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
July 2,December 31,
(In millions)20222021
Current contract assets, net$1,147 $968 
Noncurrent contract assets, net10 9 
Current contract liabilities2,722 2,655 
Noncurrent contract liabilities1,237 1,238 
In the three and ninesix months ended OctoberJuly 2, 2021,2022, the company recognized revenues of $173 million$0.71 billion and $1.10$1.99 billion, respectively, that were included in the contract liabilities balance at December 31, 2020.2021. In the three and ninesix months ended September 26, 2020,July 3, 2021, the company recognized revenues of $142 million$0.37 billion and $773 million,$0.93 billion, respectively, that were included in the contract liabilities balance at December 31, 2019.2020.

Note 4.    Business Segment and Geographical Information
Business Segment Information
Three Months EndedNine Months Ended
October 2,September 26,October 2,September 26,
(In millions)2021202020212020
Revenues
Life Sciences Solutions$3,721 $3,424 $11,481 $7,800 
Analytical Instruments1,476 1,336 4,344 3,488 
Specialty Diagnostics1,362 1,430 4,212 3,376 
Laboratory Products and Services3,487 3,112 10,667 8,629 
Eliminations(716)(781)(2,195)(1,625)
Consolidated revenues9,330 8,521 28,509 21,668 
Segment Income
Life Sciences Solutions1,821 1,879 5,818 3,788 
Analytical Instruments264 171 816 477 
Specialty Diagnostics310 398 983 848 
Laboratory Products and Services383 355 1,360 931 
Subtotal reportable segments2,778 2,803 8,977 6,044 
Cost of revenues charges— (1)(8)(5)
Selling, general and administrative (charges) credits(59)55 (33)7 
Restructuring and other costs(18)(17)(151)(67)
Amortization of acquisition-related intangible assets(423)(414)(1,295)(1,256)
Consolidated operating income2,278 2,426 7,490 4,723 
Interest income9 9 32 53 
Interest expense(128)(144)(375)(407)
Other income (expense)14 (39)(174)(36)
Income before income taxes$2,173 $2,252 $6,973 $4,333 
Geographical Information
Three Months EndedNine Months Ended
October 2,September 26,October 2,September 26,
(In millions)2021202020212020
Revenues (a)
United States$4,495 $4,428 $13,742 $10,981 
China885 828 2,454 1,886 
Other3,950 3,265 12,313 8,801 
Consolidated revenues$9,330 $8,521 $28,509 $21,668 
(a)     Revenues are attributed to countries based on customer location.
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(In millions)2022202120222021
Revenues
Life Sciences Solutions$3,292 $3,557 $7,523 $7,760 
Analytical Instruments1,607 1,481 3,125 2,868 
Specialty Diagnostics1,101 1,235 2,583 2,850 
Laboratory Products and Biopharma Services5,537 3,583 10,979 7,180 
Eliminations(567)(583)(1,422)(1,479)
Consolidated revenues10,970 9,273 22,788 19,179 
Segment Income
Life Sciences Solutions1,327 1,718 3,503 3,997 
Analytical Instruments344 280 645 552 
Specialty Diagnostics243 245 596 673 
Laboratory Products and Biopharma Services691 446 1,311 977 
Subtotal reportable segments2,605 2,689 6,055 6,199 
Cost of revenues adjustments(8)— (19)(8)
Selling, general and administrative expenses adjustments28 42 21 26 
Restructuring and other costs(24)(119)(26)(133)
Amortization of acquisition-related intangible assets(600)(449)(1,209)(872)
Consolidated operating income2,001 2,163 4,822 5,212 
Interest income36 11 54 23 
Interest expense(148)(122)(284)(247)
Other income/(expense)28 (3)(135)(186)
Income before income taxes$1,917 $2,049 $4,457 $4,802 

1211

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Cost of revenues adjustments included in the above table consist of charges for the sale of inventories revalued at the date of acquisition. Selling, general and administrative expenses adjustments included in the above table consist of third-party transaction/integration costs related to recent acquisitions, and charges/credits for changes in estimates of contingent acquisition consideration.
Geographical Information
Revenues by country based on customer location are as follows:
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(In millions)2022202120222021
Revenues
United States$5,846 $4,355 $11,943 $9,247 
China1,001 794 1,911 1,569 
Other4,123 4,124 8,934 8,363 
Consolidated revenues$10,970 $9,273 $22,788 $19,179 

Note 5.    Income Taxes
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 provision for income taxes due to the following:
Nine Months EndedSix months ended
October 2,September 26,July 2,July 3,
(In millions)(In millions)20212020(In millions)20222021
Statutory Federal Income Tax Rate21 %21 %
Provision for Income Taxes at Statutory Rate$1,464 $910 
Increases (Decreases) Resulting From:
Statutory federal income tax rateStatutory federal income tax rate21 %21 %
Provision for income taxes at statutory rateProvision for income taxes at statutory rate$936 $1,008 
Increases (decreases) resulting from:Increases (decreases) resulting from:
Foreign rate differentialForeign rate differential(159)(132)Foreign rate differential(138)(73)
Income tax creditsIncome tax credits(205)(205)Income tax credits(117)(173)
Global intangible low-taxed incomeGlobal intangible low-taxed income45 82 Global intangible low-taxed income46 50 
Foreign-derived intangible incomeForeign-derived intangible income(114)(53)Foreign-derived intangible income(71)(89)
Excess tax benefits from stock options and restricted stock unitsExcess tax benefits from stock options and restricted stock units(96)(94)Excess tax benefits from stock options and restricted stock units(31)(47)
Intra-entity transfersIntra-entity transfers(258)— Intra-entity transfers(18)(162)
Valuation allowancesValuation allowances(175)29 
Withholding taxesWithholding taxes106 10 Withholding taxes33 28 
State income taxes, net of federal taxState income taxes, net of federal tax115 29 State income taxes, net of federal tax67 78 
Other, netOther, net8 (91)Other, net(33)(14)
Provision for Income Taxes$906 $456 
Provision for income taxesProvision for income taxes$499 $635 
The company has operations and a taxable presence in approximately 5070 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, and foreign taxes that are different than the U.S. federal statutory rate.
Unrecognized Tax Benefits
As of OctoberJuly 2, 2021,2022 the company had $1.12$1.10 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)20212022
Balance at Beginningbeginning of Yearyear$1,0911,124 
Additions for tax positions of current year3013 
Additions for tax positions of prior years15 
Reductions for
Closure of tax positions of prior years(2)
Settlements(16)(32)
Balance at Endend of Periodperiod$1,1181,103 
12

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 6.    Earnings per Share
Three Months EndedNine Months Ended
October 2,September 26,October 2,September 26,
(In millions except per share amounts)2021202020212020
Net Income$1,902 $1,933 $6,067 $3,877 
Basic Weighted Average Shares394 396 394 396 
Plus Effect of: Stock options and restricted stock units3 3 3 3 
Diluted Weighted Average Shares397 399 397 399 
Basic Earnings per Share$4.83 $4.88 $15.41 $9.79 
Diluted Earnings per Share$4.79 $4.84 $15.29 $9.71 
Antidilutive Stock Options Excluded from Diluted Weighted Average Shares— — 1 1 
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(In millions except per share amounts)2022202120222021
Net income attributable to Thermo Fisher Scientific Inc.$1,664 $1,828 $3,879 $4,165 
Basic weighted average shares392 393 392 394 
Plus effect of: stock options and restricted stock units2 3 2 3 
Diluted weighted average shares394 396 394 397 
Basic earnings per share$4.25 $4.65 $9.90 $10.58 
Diluted earnings per share$4.22 $4.61 $9.83 $10.50 
Antidilutive stock options excluded from diluted weighted average shares2 1 2 1 
13

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 7.    Debt and Other Financing Arrangements
Effective Interest Rate at October 2,October 2,December 31,Effective interest rate at July 2,July 2,December 31,
(Dollars in millions)(Dollars in millions)202120212020(Dollars in millions)202220222021
Commercial PaperCommercial Paper$— $2,522 
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)$— $611 
3.00% 7-Year Senior Notes, Due 4/15/2023— 1,000 
4.15% 10-Year Senior Notes, Due 2/1/2024— 1,000 
Floating Rate (SOFR + 0.35%) 1.5-Year Senior Notes, Due 4/18/2023Floating Rate (SOFR + 0.35%) 1.5-Year Senior Notes, Due 4/18/20231,000 1,000 
Floating Rate (SOFR + 0.39%) 2-Year Senior Notes, Due 10/18/2023Floating Rate (SOFR + 0.39%) 2-Year Senior Notes, Due 10/18/2023500 500 
0.797% 2-Year Senior Notes, Due 10/18/20230.797% 2-Year Senior Notes, Due 10/18/20231.04 %1,350 1,350 
Floating Rate (EURIBOR + 0.20%) 2-Year Senior Notes Due 11/18/2023 (euro-denominated)Floating Rate (EURIBOR + 0.20%) 2-Year Senior Notes Due 11/18/2023 (euro-denominated)0.00 %1,770 1,933 
0.000% 2-Year Senior Notes Due 11/18/2023 (euro-denominated)0.000% 2-Year Senior Notes Due 11/18/2023 (euro-denominated)0.06 %573 625 
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)0.94 %1,159 1,222 0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)0.93 %1,041 1,137 
1.215% 3-Year Senior Notes, Due 10/18/20241.215% 3-Year Senior Notes, Due 10/18/20241.42 %2,500 2,500 
Floating Rate (SOFR + 0.53%) 3-Year Senior Notes, Due 10/18/2024Floating Rate (SOFR + 0.53%) 3-Year Senior Notes, Due 10/18/2024500 500 
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)0.42 %928 977 0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)0.40 %833 910 
4.133% 5-Year Senior Notes, Due 3/25/20254.32 %1,100 1,100 
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)2.10 %742 782 2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)2.09 %666 728 
0.000% 4-Year Senior Notes, Due 11/18/2025 (euro-denominated)0.000% 4-Year Senior Notes, Due 11/18/2025 (euro-denominated)0.15 %573 625 
3.65% 10-Year Senior Notes, Due 12/15/20253.65% 10-Year Senior Notes, Due 12/15/20253.77 %350 350 3.65% 10-Year Senior Notes, Due 12/15/2025— 350 
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)1.53 %812 855 1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)1.52 %729 796 
2.95% 10-Year Senior Notes, Due 9/19/20263.19 %1,200 1,200 
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)1.66 %580 611 1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)1.65 %521 568 
1.75% 7-Year Senior Notes, Due 4/15/2027 (euro-denominated)1.75% 7-Year Senior Notes, Due 4/15/2027 (euro-denominated)1.97 %696 733 1.75% 7-Year Senior Notes, Due 4/15/2027 (euro-denominated)1.96 %625 682 
3.20% 10-Year Senior Notes, Due 8/15/20273.39 %750 750 
0.50% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)0.50% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)0.78 %928 977 0.50% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)0.76 %833 910 
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)1.46 %696 733 1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)1.46 %625 682 
1.750% 7-Year Senior Notes, Due 10/15/20281.750% 7-Year Senior Notes, Due 10/15/20281.89 %700 — 1.750% 7-Year Senior Notes, Due 10/15/20281.89 %700 700 
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)2.08 %812 855 1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)2.07 %729 796 
2.60% 10-Year Senior Notes, Due 10/1/20292.60% 10-Year Senior Notes, Due 10/1/20292.74 %900 900 2.60% 10-Year Senior Notes, Due 10/1/20292.74 %900 900 
4.497% 10-Year Senior Notes, Due 3/25/20305.31 %1,100 1,100 
0.80% 9-Year Senior Notes, Due 10/18/2030 (euro-denominated)0.80% 9-Year Senior Notes, Due 10/18/2030 (euro-denominated)0.88 %1,822 1,990 
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)1.14 %1,043 1,099 0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)1.13 %937 1,023 
2.00% 10-Year Senior Notes, Due 10/15/20312.00% 10-Year Senior Notes, Due 10/15/20312.23 %1,200 — 2.00% 10-Year Senior Notes, Due 10/15/20312.23 %1,200 1,200 
2.375% 12-Year Senior Notes, Due 4/15/2032 (euro-denominated)2.375% 12-Year Senior Notes, Due 4/15/2032 (euro-denominated)2.55 %696 733 2.375% 12-Year Senior Notes, Due 4/15/2032 (euro-denominated)2.54 %625 682 
1.125% 12-Year Senior Notes, Due 10/18/2033 (euro-denominated)1.125% 12-Year Senior Notes, Due 10/18/2033 (euro-denominated)1.20 %1,562 1,706 
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)2.94 %812 855 2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)2.94 %729 796 
1.50% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)1.50% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)1.73 %1,043 1,099 1.50% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)1.73 %937 1,023 
2.80% 20-Year Senior Notes, Due 10/15/20412.80% 20-Year Senior Notes, Due 10/15/20412.90 %1,200 — 2.80% 20-Year Senior Notes, Due 10/15/20412.90 %1,200 1,200 
5.30% 30-Year Senior Notes, Due 2/1/20445.37 %400 400 
4.10% 30-Year Senior Notes, Due 8/15/20474.23 %750 750 
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)1.99 %1,159 1,222 
Other77 5 
Total Borrowings at Par Value21,833 21,919 
Fair Value Hedge Accounting Adjustments— 25 
Unamortized Discount(107)(102)
Unamortized Debt Issuance Costs(128)(114)
Total Borrowings at Carrying Value21,598 21,728 
Finance Lease Liabilities109 7 
Less: Short-term Obligations and Current Maturities19 2,628 
Long-term Obligations$21,688 $19,107 
13

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Effective interest rate at July 2,July 2,December 31,
(Dollars in millions)202220222021
1.625% 20-Year Senior Notes, Due 10/18/2041 (euro-denominated)1.76 %1,302 1,421 
5.30% 30-Year Senior Notes, Due 2/1/20445.37 %400 400 
4.10% 30-Year Senior Notes, Due 8/15/20474.23 %750 750 
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)1.98 %1,041 1,137 
2.00% 30-Year Senior Notes, Due 10/18/2051 (euro-denominated)2.06 %781 853 
Other74 76 
Total borrowings at par value30,328 34,971 
Unamortized discount(107)(117)
Unamortized debt issuance costs(161)(184)
Total borrowings at carrying value30,060 34,670 
Finance lease liabilities200 200 
Less: Short-term obligations and current maturities1,010 2,537 
Long-term obligations$29,250 $32,333 
SOFR - Secured Overnight Financing Rate
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 discountdiscounts/premiums and the amortization of any debt issuance costs.
See Note 10 for fair value information pertaining to the company’s long-term borrowings.
In connection with the agreement to acquire PPD (Note 2), the company had a cash outlay of $35 million in 2021 associated with obtaining bridge financing commitments, included in other financing activities, net, in the accompanying statement of cash flows. The bridge commitments were terminated in October 2021 upon the issuances of senior notes. The company intends to finance the purchase price with cash on hand and the net proceeds from issuances of debt, including the
14

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
senior notes issued in October 2021. The company is currently evaluating a future debt offering and the timing of such transaction is subject to market and other conditions.
Credit Facilities
The company has a revolving credit facility (the Facility) with a bank group that provides for up to $3.00$5.00 billion of unsecured multi-currency revolving credit. The Facility expires on December 4, 2025.January 7, 2027. The revolving credit agreement calls for interest at either a LIBOR-based rate (or LIBOR successor rate),Term SOFR, a EURIBOR-based rate (for funds drawn in euro) or a rate based on 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 Interest Coverage Ratio of 3.5:1.0 as of the last day of any fiscal quarter. As of OctoberJuly 2, 2021,2022, no borrowings were outstanding under the Facility, although available capacity was reduced by approximately $4 million as a result ofimmaterial 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. As of OctoberJuly 2, 2021,2022, there were no outstanding borrowings under these programs.
Senior Notes
Interest is payable quarterly on the floating rate senior notes, annually on the euro-denominated fixed rate senior notes and semi-annually on all other senior notes. Each of the fixed rate senior notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. Except for the euro-denominated floating rate senior notes, which may not be redeemed early, the floating rate senior notes may be redeemed in whole or in part on or after their applicable call dates at a redemption price of 100% of the principal amount plus accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which
14

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
limits the ability of the company to pledge principal properties as security under borrowing arrangements. The company was in compliance with all covenants at OctoberJuly 2, 2021.2022.
In the first quarter of 2021,2022, the company redeemed someall of its existing senior notes.3.650% Senior Notes due 2025. In connection with these redemptions,the redemption, the company incurred $197$26 million of losses on the early extinguishment of debt included in Other Income (Expense)other income/(expense) on the accompanying statement of income. Upon redemption of the senior notes, the company terminated the related fixed to floating rate interest rate swap arrangements and received $22 million, included in other financing activities, net, in the accompanying statement of cash flows.
October 2021 Debt Issuances
Early in the fourth quarter, the company issued the following senior notes:
(In millions)Principal Value Issued
Floating Rate 18-Month Senior Notes, Due 4/18/2023$1,000 
Floating Rate 2-Year Senior Notes, Due 10/18/2023$500 
0.797% 2-Year Senior Notes, Due 10/18/2023$1,350 
Floating Rate 3-Year Senior Notes, Due 10/18/2024$500 
1.215% 3-Year Senior Notes, Due 10/18/2024$2,500 
0.80% 9-Year Senior Notes, Due 10/18/2030 (euro-denominated)€1,750 
1.125% 12-Year Senior Notes, Due 10/18/2033 (euro-denominated)€1,500 
1.625% 20-Year Senior Notes, Due 10/18/2041 (euro-denominated)€1,250 
2.00% 30-Year Senior Notes, Due 10/18/2051 (euro-denominated)€750 
15

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Thermo Fisher Scientific (Finance I) B.V. (Thermo Fisher International), a wholly-owned finance subsidiary of the company, issued each of the Floating Rate Senior Notes due 2023, the 0.00% Senior Notes due 2023, the 0.00% Senior Notes due 2025, the 0.80% Senior Notes due 2030, the 1.125% Senior Notes due 2033, the 1.625% Senior Notes due 2041, and the 2.00% Senior Notes due 2051 included in the table above (collectively, the “Euronotes”) in a registered public offering.offerings. 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.

Note 8.    Commitments and Contingencies
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 OctoberJuly 2, 2021,2022, there have been no material changes to the accruals for pending environmental-related matters disclosed in the company’s 20202021 financial statements and notes included in the company’s Annual Report on Form 10-K. While management believes the accruals for environmental remediation are adequate based on current estimates of remediation costs, the company may be subject to additional remedial or compliance costs due to future events such as changes in existing laws and regulations, changes in agency direction or enforcement policies, developments in remediation technologies or changes in the conduct of the company’s operations, which could have a material adverse effect on the company’s financial position, results of operations orand 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 in the company's 2020company’s 2021 financial statements and notes included in the company'scompany’s Annual Report on Form 10-K, 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. At OctoberJuly 2, 2021,2022, there have been no material changes to the accruals for pending product liability, workers compensation, and other personal injury matters disclosed in the company’s 20202021 financial statements and notes included in the company’s Annual Report on Form 10-K. Although the company believes that the amounts accrued and estimated insurance recoveries are probable and appropriate based on available information, including actuarial studies of loss estimates, the process of estimating losses and insurance recoveries involves a considerable degree of judgment by management and the ultimate amounts could vary, which could have a material adverse effect on the company’s results of operations, financial position, and cash flows. 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
15

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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.
16

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Loss on Supply Agreement
In the third quarter of 2020, the Analytical Instruments segment recorded a charge to cost of product revenues for $108 million related to an existing supply contract for components of electron microscopy instruments. The agreement requires the company to make future minimum purchases through 2025. The company developed and launched an alternative product beginning in 2020 and based on the expected demand for the internally developed product vs. the third-party product, the company does not expect to use all of the product it will be required to buy, resulting in a loss on the purchase commitment.

Note 9.    Comprehensive Income
Changes in each component of accumulated other comprehensive items, net of tax, are as follows:
(In millions)(In millions)Currency
Translation
Adjustment		Unrealized
Losses on
Hedging
Instruments		Pension and
Other
Postretirement
Benefit
Liability
Adjustment		Total(In millions)Currency
translation
adjustment		Unrealized
losses on
hedging
instruments		Pension and
other
postretirement
benefit
liability
adjustment		Total
Balance at December 31, 2020$(2,438)$(91)$(278)$(2,807)
Balance at December 31, 2021Balance at December 31, 2021$(2,065)$(35)$(229)$(2,329)
Other comprehensive items before reclassificationsOther comprehensive items before reclassifications121 — 7 128 Other comprehensive items before reclassifications(416)— 9 (407)
Amounts reclassified from accumulated other comprehensive itemsAmounts reclassified from accumulated other comprehensive items— 16 9 25 Amounts reclassified from accumulated other comprehensive items7 1 4 12 
Net other comprehensive itemsNet other comprehensive items121 16 16 153 Net other comprehensive items(409)1 13 (395)
Balance at October 2, 2021$(2,317)$(75)$(262)$(2,654)
Balance at July 2, 2022Balance at July 2, 2022$(2,474)$(34)$(216)$(2,724)

Note 10.    Fair Value Measurements and Fair Value of Financial Instruments
Fair Value Measurements
The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of October 2, 2021 and December 31, 2020:basis:
October 2,Quoted
Prices in
Active
Markets		Significant
Other
Observable
 Inputs		Significant
Unobservable
Inputs		July 2,Quoted
prices in
active
markets		Significant
other
observable
inputs		Significant
unobservable
inputs
(In millions)(In millions)2021(Level 1)(Level 2)(Level 3)(In millions)2022(Level 1)(Level 2)(Level 3)
AssetsAssetsAssets
Cash equivalentsCash equivalents$10,518 $10,518 $— $— Cash equivalents$173 $173 $— $— 
Investments in common stock, mutual funds and other similar instruments61 61 — — 
InvestmentsInvestments64 64 — — 
WarrantsWarrants18 — 18 — Warrants13 — 13 — 
Insurance contractsInsurance contracts178 — 178 — Insurance contracts153 — 153 — 
Derivative contractsDerivative contracts75 — 75 — Derivative contracts103 — 103 — 
Total Assets$10,850 $10,579 $271 $— 
Total assetsTotal assets$506 $237 $269 $— 
LiabilitiesLiabilitiesLiabilities
Derivative contractsDerivative contracts$4 $— $4 $— Derivative contracts$1 $— $1 $— 
Contingent considerationContingent consideration171 — — 171 Contingent consideration216 — — 216 
Total Liabilities$175 $— $4 $171 
Total liabilitiesTotal liabilities$217 $— $1 $216 
1716

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
December 31,Quoted
Prices in
 Active
Markets		Significant
Other
Observable
 Inputs		Significant
 Unobservable
 Inputs		December 31,Quoted
prices in
active
markets		Significant
other
observable
inputs		Significant
unobservable
inputs
(In millions)(In millions)2020(Level 1)(Level 2)(Level 3)(In millions)2021(Level 1)(Level 2)(Level 3)
AssetsAssetsAssets
Cash equivalentsCash equivalents$8,971 $8,971 $— $— Cash equivalents$2,210 $2,210 $— $— 
Investments in common stock, mutual funds and other similar instruments21 21 — — 
InvestmentsInvestments298 298 — — 
WarrantsWarrants7 — 7 — Warrants15 — 15 — 
Insurance contractsInsurance contracts157 — 157 — Insurance contracts181 — 181 — 
Derivative contractsDerivative contracts28 — 28 — Derivative contracts36 — 36 — 
Total Assets$9,184 $8,992 $192 $— 
Total assetsTotal assets$2,740 $2,508 $232 $— 
LiabilitiesLiabilitiesLiabilities
Derivative contractsDerivative contracts$132 $— $132 $— Derivative contracts$1 $— $1 $— 
Contingent considerationContingent consideration70 — — 70 Contingent consideration317 — — 317 
Total Liabilities$202 $— $132 $70 
Total liabilitiesTotal liabilities$318 $— $1 $317 
The company uses the Black-Scholes model to value its warrants. 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 the fair value of acquisition-related contingent consideration based on amounts expected to be transferred (probability-weighted) discounted to present value. Changes to the fair value of contingent consideration are recorded in selling, general and administrative expense.
In the three and six months ended July 2, 2022, the company recorded $17 million and $(122) million, respectively, of net gains (losses) on investments which are included in other income/(expense) in the accompanying statement of income. In the three and six months ended July 3, 2021, the company recorded $1 million and $2 million, respectively, of net losses on investments which are included in other income/(expense) in the accompanying statement of income.
The following table provides a rollforward of the fair value, as determined by level 3 inputs (such as likelihood of achieving production or revenue milestones)milestones, as well as changes in the fair values of the investments underlying a recapitalization investment portfolio), of the contingent consideration.
Three Months EndedNine Months EndedThree months endedSix months ended
October 2,September 26,October 2,September 26,July 2,July 3,July 2,July 3,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Contingent Consideration
Beginning Balance$149 $53 $70 $55 
Contingent considerationContingent consideration
Beginning balanceBeginning balance$261 $227 $317 $70 
Acquisitions (including assumed balances)Acquisitions (including assumed balances)— — 179 — Acquisitions (including assumed balances)— 17 (18)179 
PaymentsPayments(1)(1)(43)(3)Payments(2)(35)(32)(42)
Changes in fair value included in earnings
Changes in fair value included in earnings
23 (8)(35)(8)Changes in fair value included in earnings(43)(60)(51)(58)
Ending Balance$171 $44 $171 $44 
Ending balanceEnding balance$216 $149 $216 $149 
Derivative Contracts
The following table provides the aggregate notional value of outstanding derivative contracts.
October 2,December 31,July 2,December 31,
(In millions)(In millions)20212020(In millions)20222021
Notional Amount
Interest rate swaps - fair value hedges$— $1,000 
Notional amountNotional amount
Cross-currency interest rate swaps - designated as net investment hedgesCross-currency interest rate swaps - designated as net investment hedges900 900 Cross-currency interest rate swaps - designated as net investment hedges$900 $900 
Currency exchange contractsCurrency exchange contracts4,823 5,206 Currency exchange contracts1,571 2,149 
17

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
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
18

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
accompanying balance sheet and statement of income.
 Fair Value – AssetsFair Value – Liabilities
 October 2,December 31,October 2,December 31,
(In millions)2021202020212020
Derivatives Designated as Hedging Instruments
Interest rate swaps (a)$— $25 $— $— 
Cross-currency interest rate swaps (a)10 — 4 46 
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts (b)65 3 — 86 
Total Derivatives$75 $28 $4 $132 
 Fair value – assetsFair value – liabilities
 July 2,December 31,July 2,December 31,
(In millions)2022202120222021
Derivatives designated as hedging instruments
Cross-currency interest rate swaps (a)$98 $25 $— $— 
Derivatives not designated as hedging instruments
Currency exchange contracts (b)5 11 1 1 
Total derivatives$103 $36 $1 $1 
(a)    The fair valuesvalue of the interest rate swaps and cross-currency interest rate swaps areis included in the accompanying balance sheet under the caption other assets or other long-term liabilities.
(b)    The fair value of the currency exchange contracts is included in the accompanying balance sheet under the captions other current assets or other accrued expenses.
The following amounts related to cumulative basis adjustments for fair value hedges were included in the accompanying balance sheet under the caption long-term obligations:
Carrying Amount of the Hedged LiabilityCumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability
October 2,December 31,October 2,December 31,
(In millions)2021202020212020
Long-term Obligations$— $1,020 $— $25 

 Gain (Loss) Recognized
Three Months EndedNine Months Ended
October 2,September 26,October 2,September 26,
(In millions)2021202020212020
Fair Value Hedging Relationships
Interest rate swaps
Hedged long-term obligations - included in other income (expense)$— $— $25 $(43)
Derivatives designated as hedging instruments - included in other income (expense)— — (3)43 
Derivatives Designated as Cash Flow Hedges
Interest rate swaps
Included in unrealized losses on hedging instruments within other comprehensive items— — — (85)
Amount reclassified from accumulated other comprehensive items to other expense(2)(8)(21)(14)
Financial Instruments Designated as Net Investment Hedges
Foreign currency-denominated debt
Included in currency translation adjustment within other comprehensive items297 (295)673 (276)
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive items20 (30)52 (30)
Included in other income (expense)2 2 6 9 
19

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Gain (Loss) Recognized Gain (loss) recognized
Three Months EndedNine Months EndedThree months endedSix months ended
October 2,September 26,October 2,September 26,July 2,July 3,July 2,July 3,
(In millions)(In millions)2021202020212020(In millions)2022202120222021
Derivatives Not Designated as Hedging Instruments
Fair value hedging relationshipsFair value hedging relationships
Interest rate swapsInterest rate swaps
Hedged long-term obligations - included in other income/(expense)Hedged long-term obligations - included in other income/(expense)$— $— $— $25 
Derivatives designated as hedging instruments - included in other income/(expense)Derivatives designated as hedging instruments - included in other income/(expense)— — — (3)
Derivatives designated as cash flow hedgesDerivatives designated as cash flow hedges
Interest rate swapsInterest rate swaps
Amount reclassified from accumulated other comprehensive items to other income/(expense)Amount reclassified from accumulated other comprehensive items to other income/(expense)(1)(2)(2)(19)
Financial instruments designated as net investment hedgesFinancial instruments designated as net investment hedges
Foreign currency-denominated debt and other payablesForeign currency-denominated debt and other payables
Included in currency translation adjustment within other comprehensive itemsIncluded in currency translation adjustment within other comprehensive items671 (90)1,033 376 
Cross-currency interest rate swapsCross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive itemsIncluded in currency translation adjustment within other comprehensive items51 (6)74 32 
Included in other income/(expense)Included in other income/(expense)4 2 6 4 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Currency exchange contractsCurrency exchange contractsCurrency exchange contracts
Included in cost of product revenuesIncluded in cost of product revenues7 (2)8 (2)Included in cost of product revenues21 (11)12 1 
Included in other income (expense)(8)51 147 7 
Cross-currency interest rate swaps
Included in other income (expense)— 1 — (9)
Included in other income/(expense)Included in other income/(expense)13 (28)12 155 
Gains and losses recognized on currency exchange contracts and the interest rate swaps designated as fair value hedges are included in the accompanying statement of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.
The company uses foreign currency-denominated debt, certain foreign-denominated payables, and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates. The majorityA portion of the company’s euro-denominated senior notes, certain foreign-denominated payables, and its cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and certain foreign-denominated payables, and contract fair value changes on the cross-currency interest rate
18

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.
See Note 1 to the consolidated financial statements for 20202021 included in the company'scompany’s Annual Report on Form 10-K for additional information on the company'scompany’s risk management objectives and strategies.
Fair Value of Other Financial Instruments
The carrying value and fair value of the company’s debt instruments are as follows:
October 2, 2021December 31, 2020July 2, 2022December 31, 2021
CarryingFairCarryingFairCarryingFairCarryingFair
(In millions)(In millions)ValueValueValueValue(In millions)valuevaluevaluevalue
Senior notesSenior notes$21,521 $23,418 $21,723 $24,653 Senior notes$29,986 $27,265 $32,072 $33,449 
Commercial paperCommercial paper— — 2,522 2,522 
OtherOther77 77 5 5 Other74 74 76 76 
$21,598 $23,495 $21,728 $24,658 $30,060 $27,339 $34,670 $36,047 
The fair value of debt instruments 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.

Note 11.    Supplemental Cash Flow Information
 Nine Months Ended
 October 2,September 26,
(In millions)20212020
Non-cash Investing and Financing Activities
Acquired but unpaid property, plant and equipment$257 $134 
Fair value of acquisition contingent consideration179 — 
Declared but unpaid dividends104 88 
Issuance of stock upon vesting of restricted stock units237 209 
20

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
 Six months ended
 July 2,July 3,
(In millions)20222021
Non-cash investing and financing activities
Acquired but unpaid property, plant and equipment$234 $225 
Fair value of acquisition contingent consideration— 179 
Declared but unpaid dividends119 104 
Issuance of stock upon vesting of restricted stock units107 97 
Cash, cash equivalents and restricted cash is included in the accompanying balance sheet as follows:
 October 2,December 31,
(In millions)20212020
Cash and Cash Equivalents$12,027 $10,325 
Restricted Cash Included in Other Current Assets20 10 
Restricted Cash Included in Other Assets1 1 
Cash, Cash Equivalents and Restricted Cash$12,048 $10,336 
 July 2,December 31,
(In millions)20222021
Cash and cash equivalents$1,888 $4,477 
Restricted cash included in other current assets16 13 
Restricted cash included in other assets1 1 
Cash, cash equivalents and restricted cash$1,905 $4,491 
Amounts included in restricted cash represent funds held as collateral for bank guarantees and incoming cash in China awaiting government administrative clearance.

19

THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
Note 12.    Restructuring and Other Costs
In the first ninesix months of 2021 the company recorded2022, restructuring and other costs primarily associated withincluded continuing charges for impairment of acquired technologyheadcount reductions and third-party transaction/integration costs relatedfacility consolidations in an effort to recent acquisitions, partially offset by credits for changes in estimates of contingent acquisition consideration.streamline operations. In the first nine months of 2021,2022, severance actions associated with facility consolidations and cost reduction measures affected less than 1%0.5% of the company’s workforce.
As of November 4, 2021,August 5, 2022, the company has identified restructuring actions that will result in additional charges of approximately $25$20 million, primarily in 2021 and 2022, and expects to identify additional actions in future periods which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.
During the third quarter of 2021, the company recorded net restructuringRestructuring and other costs (income) by segment as follows:
(In millions)Cost of
Revenues		Selling,
General and
Administrative
Expenses		Restructuring
and Other
Costs		Total
Life Sciences Solutions$— $23 $(3)$20 
Analytical Instruments— 1 2 3 
Specialty Diagnostics— — 14 14 
Laboratory Products and Services— 26 (3)23 
Corporate— 9 8 17 
$— $59 $18 $77 
During the first nine months of 2021, the company recorded net restructuring and other costs (income) by segment as follows:
(In millions)Cost of
Revenues		Selling,
General and
Administrative
Expenses		Restructuring
and Other
Costs		Total
Life Sciences Solutions$8 $(24)$125 $109 
Analytical Instruments— 1 5 6 
Specialty Diagnostics— (2)17 15 
Laboratory Products and Services— 49 (5)44 
Corporate— 9 9 18 
$8 $33 $151 $192 
The principal components of net restructuring and other costs (income) by segment are as follows:
Life Sciences Solutions
In the first nine months of 2021, the Life Sciences Solutions segment recorded $125 million of restructuring and other costs, primarily charges of $110 million for impairment of acquired technology resulting from a reduction in expected cash
21


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
flows, and compensation contractually due to employees of acquired businesses at the date of acquisition. The segment recorded $24 million of net credits to selling, general, and administrative expense, principally for changes in estimates of contingent acquisition consideration, partially offset by third-party transaction costs related to recent acquisitions. The segment also recorded $8 million of charges to cost of revenues for the sale of inventories revalued at the date of acquisition.
Specialty Diagnostics
In the first nine months of 2021, the Specialty Diagnostics segment recorded $17 million of net restructuring and other charges, primarily for severance and write-downs of fixed assets to estimated disposal value in connection with the discontinuation of a product line in Europe.
Laboratory Products and Services
In the first nine months of 2021, the Laboratory Products and Services segment recorded $44 million of net restructuring and other charges, primarily for third-party transaction/integration costs related to recent acquisitions.
Corporate
In the first nine months of 2021, the company recorded $18 million of net restructuring and other charges, primarily for product liability litigation and pre-acquisition related matters.
Three months endedSix months ended
July 2,July 2,
(In millions)20222022
Life Sciences Solutions$5 $6 
Analytical Instruments2 4 
Specialty Diagnostics2 3 
Laboratory Products and Biopharma Services15 13 
$24 $26 
The following table summarizes the changes in the company’s accrued restructuring balance. Other amounts reported as restructuring and other costs in the accompanying statement of income have been summarized in the notes to the table. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.
(In millions)Total (a)
Balance at December 31, 2020202121$17 
Net restructuring charges incurred in 20212022 (b)2322 
Payments(31)(24)
Currency translation(1)
Balance at OctoberJuly 2, 20212022$1215 
(a)The movements in the restructuring liability principally consist of severance and other costs such as relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.
(b)Excludes $128$4 million of net charges, principally for impairment of acquired technology, compensation contractually due and paid to employees of acquired businesses at the date of acquisition, fixed asset write-downs, and charges associated with pre-acquisition related matters.non-cash charges.
The company expects to pay accrued restructuring costs primarily through 2021.2022.

2220

THERMO FISHER SCIENTIFIC INC.
Item 2.    Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934 (the Exchange Act), are made throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, including without limitation statements regarding: projections of revenues, expenses, earnings, margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, and our liquidity position; cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions or divestitures; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; any potentialthe expected impact of the COVID-19 pandemic on the company’s business; and any other statements that address events or developments that Thermo Fisher intends or believes will or may occur in the future. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” “seeks,” “estimates,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, even if the company’s estimates change, and readers should not rely on those forward-looking statements as representing the company’s views as of any date subsequent to the date of the filing of this Quarterly Report.report.
ImportantA number of important factors that could cause actualthe results of the company to differ materially from those indicated by such forward-looking statements, are set forthincluding those detailed under the caption “Risk Factors” in the company’s Annual Report on Form 10-K for the year ended December 31, 20202021 (which is on file with the SEC) as updated under the heading “Risk Factors” in Part II, Item 1A of this report on Form 10-Q.. Important factors that could cause actual results to differ materially from those indicated by forward-looking statements include risks and uncertainties relating to: the duration and severity of the COVID-19 pandemic; the need to develop new products and adapt to significant technological change; implementation of strategies for improving growth; general economic conditions and related uncertainties,uncertainties; dependence on customers'customers’ capital spending policies and government funding policies; the effect of economic and political conditions and exchange rate fluctuations on international operations; use and protection of intellectual property; the effect of changes in governmental regulations; any natural disaster, public health crisis or other catastrophic event; and the effect of laws and regulations governing government contracts, as well as the possibility that expected benefits related to recent or pending acquisitions including our pending acquisition of PPD, Inc., may not materialize as expected.

The company refers to various amounts or measures not prepared in accordance with generally accepted accounting principles (non-GAAP measures). These non-GAAP measures are further described and reconciled to their most directly comparable amount or measure under the section “Non-GAAP Measures” later in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”
Overview
Thermo Fisher Scientific Inc. 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. The company develops, manufactures and sells a broad range of products that are sold worldwide. The company expands the product lines and services it offers by developing and commercializing its own technologies and by making strategic acquisitions of complementary businesses. The company’scompany���s operations fall into four segments (Note 4): Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Biopharma Services.
21

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview (continued)
Financial Highlights
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(Dollars in millions except per share amounts)20222021Change20222021Change
Revenues$10,970 $9,273 18 %$22,788 $19,179 19 %
GAAP operating income2,001 2,163 (7)%4,822 5,212 (7)%
GAAP operating income margin18.2 %23.3 %(5.1) pt21.2 %27.2 %(6.0) pt
Adjusted operating income (non-GAAP measure)
2,605 2,689 (3)%6,055 6,199 (2)%
Adjusted operating income margin (non-GAAP measure)
23.7 %29.0 %(5.3) pt26.6 %32.3 %(5.7) pt
GAAP diluted earnings per share attributable to Thermo Fisher Scientific Inc.4.22 4.61 (8)%9.83 10.50 (6)%
Adjusted earnings per share (non-GAAP measure)
5.51 5.60 (2)%12.76 12.81 — %
Organic Revenue Growth
Three months endedSix months ended
July 2, 2022July 2, 2022
Revenue growth18 %19 %
Impact of acquisitions19 %19 %
Impact of currency translation(4)%(3)%
Organic revenue growth* (non-GAAP measure)
3 %3 %
*    Results may not sum due to rounding
Since 2020, the Life Sciences Solutions and Specialty Diagnostics segments as well as the laboratory products business have supported COVID-19 diagnostic testing, scaling and evolving their molecular diagnostics solutions and plastic consumables businesses to respond to the ongoing COVID-19 pandemic. The company mobilized in early 2020 to support the COVID-19 pandemic response with productsbiosciences and services that help analyze, diagnose and protect from the virus. However, the company saw a significant reduction in customer activity in several businesses by late March 2020 that materially adversely affected primarily the 2020 results of the Analytical Instruments segment and, to a lesser extent, some businesses within the company’s other three segments. The negative impact has significantly lessened so far in 2021, but could worsen later in the year dependent on the success of global efforts to control and unwind from the pandemic and economic activity ramping up. Several of the company’sbioproduction businesses have had a significant increase in revenues dueexpanded their capacity to salesmeet the needs of productspharma and biotech customers as they have expanded their own production volumes to meet global vaccine manufacturing requirements. Additionally, our pharma services addressing diagnosisbusiness has provided our pharma and treatment of COVID-19, including test kitsbiotech customers with the services they needed to develop and to a lesser extent, productsproduce vaccines and services for therapy and vaccine development and manufacturing.therapies globally. While these positive impacts are expected to continue through 2021,2022, the duration and extent of future revenues from such sales are uncertain and dependent primarily on customer testing as well as therapy and vaccine demand.
Sales of products related to COVID-19 testing were $0.63 billion and $1.42 billion in the thirdsecond quarter of 2022 and 2021, respectively, and $2.31 billion and $3.87 billion in the first six months of 2022 and 2021, respectively.
During the second quarter and first six months of 2022, demand from biotech and pharma customers was very strong, driven by our unique value proposition and trusted partner status. We saw growth in the academic and government market as we remain well positioned to meet customer needs. The industrial and applied market was strong, led by robust demand from semiconductor and materials sciences customers. The diagnostics and healthcare market declined due to decreased demand for COVID-19 testing products. During the second quarter and first six months of 2022, sales growth was strong in the Asia Pacific region, particularly China, and in North America. Sales declined in Europe during the second quarter and first six months of 2022 due to lower COVID-19 testing demand. The company continues to execute its proven growth strategy which consists of three pillars:
•Developing high-impact, innovative new products,
•Leveraging our scale in high-growth and emerging markets, and
•Delivering a unique value proposition to our customers.
GAAP operating income margin and adjusted operating income margin decreased in the second quarter and first six months of 2022 due primarily to the expected impact of incorporating recent acquisitions, lower COVID-19 testing volumes, and strategic growth investments. This was partially offset by strong pricing realization across all segments to address higher inflation. GAAP operating income margin in 2022 was also impacted by higher amortization expense as a result of 2021 acquisitions. In the second quarter of 2021, were $9.33 billion, an increase of $0.81 billion from the third quarter of 2020. Excluding the effects of currency translation and acquisitions, revenues increased $0.59 billion (7%).
In the third quarter of 2021, total company operating income andGAAP operating income margin were $2.28 billion and 24.4%, respectively, compared with $2.43 billion and 28.5%, respectively, in 2020.was impacted by an impairment of acquired technology.
2322

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Overview (continued)
Net income decreased slightly to $1.90 billion in the third quarter of 2021 from $1.93 billion in the third quarter of 2020, primarily due to a decrease in operating income, offset in part by an increase in the income tax provision.
During the first nine months of 2021, the company’s cash flow from operations totaled $6.86 billion compared with $4.95 billion for 2020.
On January 15, 2021, the company acquired, within the Laboratory Products and Services segment, the Belgium-based European viral vector manufacturing business of Groupe Novasep SAS for $834 million in net cash consideration. The European viral vector manufacturing business provides manufacturing services for vaccines and therapies to biotechnology companies and large biopharma customers. The acquisition expands the segment’s capabilities for cell and gene vaccines and therapies.
On February 25, 2021, the company acquired, within the Life Sciences Solutions segment, Mesa Biotech, Inc., a U.S.-based molecular diagnostic company, for $409 million in net cash consideration and contingent consideration with an initial fair value of $65 million due upon the completion of certain milestones. Mesa Biotech has developed and commercialized a PCR based rapid point-of-care testing platform available for detecting infectious diseases including COVID-19. The acquisition enables the company to accelerate the availability of reliable and accurate advanced molecular diagnostics at the point of care.
On September 30, 2021, the company assumed operating responsibility, within the Laboratory Products and Services segment, of a new state-of-the-art biologics manufacturing facility in Lengnau, Switzerland from CSL Limited to perform pharma services for CSL with capacity to serve other customers as well. The company expects to make fixed lease payments aggregating to $555 million (excluding renewals) from 2021 to 2041, with additional amounts dependent on the extent of revenues from customers of the facility other than CSL.
On April 15, 2021, the company entered into a definitive agreement under which it will acquire PPD, Inc. for $47.50 per share for a total cash purchase price of $17.4 billion plus the assumption of approximately $3.5 billion of net debt. PPD provides a broad range of clinical research and specialized laboratory services to enable customers to accelerate innovation and increase drug development productivity. In 2020, PPD generated revenue of $4.7 billion. Upon close of the transaction, PPD will become part of the Laboratory Products and Services Segment. Shareholders holding in aggregate approximately 60% of the issued and outstanding shares of common stock of PPD on April 15, 2021, have approved the transaction by written consent. No further action by other PPD shareholders is required to approve the transaction. On July 16, 2021, the company and PPD each received a request for additional information and documentary materials from the FTC, in connection with the FTC’s review of the proposed merger. The effect of the Second Request is to extend the waiting period imposed under the HSR Act until the 30th day after substantial compliance by the company and PPD with the Second Request, unless the waiting period is terminated earlier by the FTC. As of October 22, 2021, both the company and PPD had certified substantial compliance with the Second Request. The transaction remains subject to the satisfaction of customary closing conditions, including termination of the HSR Act waiting period and receipt of applicable regulatory approvals outside the U.S. Subject to the satisfaction of the required closing conditions, we continue to expect the merger to be completed by the end of 2021. The company intends to finance the purchase price with cash on hand and the net proceeds from issuances of debt, including the senior notes issued in October 2021. The company is currently evaluating a future debt offering and the timing of such transaction is subject to market and other conditions.

Critical Accounting Policies and Estimates
Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2020, describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no significant changes in the company's critical accounting policies during the first nine months of 2021.

24

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
Third Quarter 2021 Compared With Third Quarter 2020
Three Months Ended
(In millions)October 2,
2021		September 26,
2020		Total
Change		Currency
Translation		Acquisitions/ DivestituresOperations
Revenues
Life Sciences Solutions$3,721 $3,424 $297 $59 $90 $148 
Analytical Instruments1,476 1,336 140 14 — 126 
Specialty Diagnostics1,362 1,430 (68)7 — (75)
Laboratory Products and Services3,487 3,112 375 29 26 320 
Eliminations(716)(781)65 (4)— 69 
Consolidated Revenues$9,330 $8,521 $809 $105 $116 $588 
Sales in the third quarter of 2021 increased $809 million from the third quarter of 2020. Aside from the effects of currency translation and acquisitions, revenues increased $588 million (7%) driven by higher demand. Sales of products that address COVID-19 testing and treatment increased $0.08 billion to $2.05 billion in the third quarter of 2021. Conditions were strong in each of the company’s end markets during the third quarter of 2021. Sales were particularly strong in pharma and biotech driven by strong market dynamics, the company’s role in supporting customers across a wide range of therapeutic areas, and demand from biopharma customers as they continue to invest in their research and development pipelines. Sales to customers in industrial and applied markets benefited from increased customer activity. Customers in the academic and government market increased demand as a result of positive funding trends. Sales to customers in diagnostics and healthcare markets were strong as customer demand for non-COVID-19 response products and services has nearly returned to pre-pandemic levels; however, this strength was more than offset by lower COVID-19 testing year-over-year. Sales growth was strong in Europe and the Asia-Pacific region and flat in North America during the third quarter of 2021.
In the third quarter of 2021, total company operating income and operating income margin were $2.28 billion and 24.4%, respectively, compared with $2.43 billion and 28.5%, respectively, in 2020. The decrease in operating income was primarily due to sales mix and strategic growth investments in 2021 to support the company’s near and long-term growth, which were offset in part by profit on higher sales and productivity improvements. The company’s references to strategic growth investments generally refer to targeted spending for enhancing commercial capabilities, including expansion of geographic sales reach and e-commerce platforms, marketing initiatives, expanded service and operational infrastructure, research and development projects and other expenditures to enhance the customer experience, as well as incentive compensation and recognition for employees. The company’s references throughout this discussion to productivity improvements generally refer to improved cost efficiencies from its Practical Process Improvement (PPI) business system including reduced costs resulting from implementing continuous improvement methodologies, global sourcing initiatives, a lower cost structure following restructuring actions, including headcount reductions and consolidation of facilities, and low cost region manufacturing. Productivity improvements are calculated net of inflationary cost increases.
In the third quarter ofNotable Recent Acquisitions
On January 15, 2021, the company recorded restructuringacquired, within the Laboratory Products and other costsBiopharma Services segment, the Belgium-based European viral vector manufacturing business of $77 million. InGroupe Novasep SAS for $0.83 billion in net cash consideration. The European viral vector manufacturing business provides manufacturing services for vaccines and therapies to biotechnology companies and large biopharma customers. The acquisition expands the third quarter of 2020,segment’s capabilities for cell and gene vaccines and therapies.
On February 25, 2021, the company recorded restructuringacquired, within the Life Sciences Solutions segment, Mesa Biotech, Inc., a U.S.-based molecular diagnostic company, for $0.41 billion in net cash consideration and contingent consideration with an initial fair value of $0.06 billion due upon the completion of certain milestones. Mesa Biotech has developed and commercialized a PCR based rapid point-of-care testing platform available for detecting infectious diseases including COVID-19. The acquisition enables the company to accelerate the availability of reliable and accurate advanced molecular diagnostics at the point of care.
On September 30, 2021, the company assumed operating responsibility, within the Laboratory Products and Biopharma Services segment, of a new state-of-the-art biologics manufacturing facility in Lengnau, Switzerland from CSL Limited to perform pharma services for CSL with capacity to serve other costscustomers as well. The company expects to make fixed lease payments aggregating to $0.56 billion (excluding renewals) from 2021 to 2041, with additional amounts dependent on the extent of $37 million. See Note 12revenues from customers of the facility other than CSL.
On December 8, 2021, the company acquired, within the Laboratory Products and Biopharma Services segment, PPD, Inc., a U.S.-based global provider of clinical research services to the pharma and biotech industry, for restructuring charges expected$15.99 billion in future periods.net cash consideration and $0.04 billion of equity awards exchanged. The addition of PPD’s clinical research services enhances our offering to biotech and pharma customers by enabling them to accelerate innovation and increase their productivity within the drug development process. In 2020, PPD generated revenues of $4.68 billion.
Segment On December 30, 2021, the company acquired, within the Life Sciences Solutions segment, PeproTech, Inc., a U.S. based developer and manufacturer of recombinant proteins, for $1.86 billion in net cash consideration. PeproTech provides bioscience reagents known as recombinant proteins, including cytokines and growth factors. The acquisition expands the segment’s bioscience offerings.
Results of Operations
The company’s management evaluates segment operating performance using operating income before certain charges/credits as defined in Note 4 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2020, describes2021. Accordingly, the company’s measurement offollowing segment income. There have been no significant changes in measurement methods used to determine segment income. The company’s references to individual businesses contributing to fluctuations in segment revenues refer to those fluctuations that drove notable changes in amount and/or percentage anddata are identified in decreasing order of magnitude.reported on this basis.
25
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(Dollars in millions)2022202120222021
Revenues
Life Sciences Solutions$3,292 $3,557 $7,523 $7,760 
Analytical Instruments1,607 1,481 3,125 2,868 
Specialty Diagnostics1,101 1,235 2,583 2,850 
Laboratory Products and Biopharma Services5,537 3,583 10,979 7,180 
Eliminations(567)(583)(1,422)(1,479)
Consolidated revenues$10,970 $9,273 $22,788 $19,179 


23
THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Three Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues
Life Sciences Solutions$3,721 $3,424 9 %
Analytical Instruments1,476 1,336 10 %
Specialty Diagnostics1,362 1,430 (5)%
Laboratory Products and Services3,487 3,112 12 %
Eliminations(716)(781)(8)%
Consolidated Revenues$9,330 $8,521 9 %
Segment Income
Life Sciences Solutions$1,821 $1,879 (3)%
Analytical Instruments264 171 54 %
Specialty Diagnostics310 398 (22)%
Laboratory Products and Services383 355 8 %
Subtotal Reportable Segments2,778 2,803 (1)%
Cost of Revenues Charges— (1)
Selling, General and Administrative Charges (Credits)(59)55 
Restructuring and Other Costs(18)(17)
Amortization of Acquisition-related Intangible Assets(423)(414)
Consolidated Operating Income$2,278 $2,426 (6)%
Reportable Segments Income Margin29.8 %32.9 %
Consolidated Operating Income Margin24.4 %28.5 %
Income from the company’s reportable segments decreased 1% to $2.78 billion in the third quarter of 2021 due primarily to sales mix and strategic growth investments in 2021 to support the company’s near and long-term growth, which were offset in part by profit on higher sales and productivity improvements.
Life Sciences Solutions
Three Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$3,721 $3,424 9 %
Operating Income Margin48.9 %54.9 %-6.0 pt
Sales in the Life Sciences Solutions segment increased $297 million in the third quarter of 2021. Sales increased $148 million (4%) due to higher revenues at existing businesses and $90 million due to acquisitions. The favorable effects of currency translation resulted in an increase in revenues of $59 million. The increase in revenues at existing businesses was primarily driven by demand for biosciences and bioproduction products.
The decrease in operating income margin for the segment resulted primarily from strategic growth investments and sales mix, offset in part by profit on higher sales.
26

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Analytical InstrumentsLife Sciences Solutions
Three Months Ended
October 2,September 26,Three months ended
Organic* (non-GAAP measure)
(Dollars in millions)(Dollars in millions)20212020Change(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
RevenuesRevenues$1,476 $1,336 10 %Revenues$3,292 $3,557 (7)%(3)%1 %(5)%
Operating Income Margin17.8 %12.8 %5.0 pt
Segment incomeSegment income1,327 1,718 (23)%
Segment income marginSegment income margin40.3 %48.3 %-8.0 pt
SalesThe decrease in organic revenues in the Analytical Instruments segment increased $140 millionsecond quarter of 2022 was primarily due to lower revenue in the third quartergenetic sciences business, driven by moderation in testing demand to diagnose COVID-19, partially offset by strong growth in the bioproduction business. The decrease in segment income margin resulted primarily from unfavorable business mix and strategic growth investments, partially offset by productivity improvements.
Six months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$7,523 $7,760 (3)%(2)%2 %(3)%
Segment income$3,503 $3,997 (12)%
Segment income margin46.6 %51.5 %-4.9 pt
The decrease in organic revenues in the first six months of 2021. Sales increased $126 million (9%) due2022 was driven by a combination of moderation in testing demand to higher revenues at existingdiagnose COVID-19 with lower sales of genetic sciences products, largely offset by strong demand in the bioproduction and biosciences businesses. The favorable effects of currency translationdecrease in segment income margin resulted in an increase in revenues of $14 million. primarily from business mix and strategic growth investments, partially offset by productivity improvements.
Analytical Instruments
Three months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$1,607 $1,481 9 %(4)%— %13 %
Segment income344 280 23 %
Segment income margin21.4 %18.9 %2.5 pt
The increase in organic revenues at existing businessesin the second quarter of 2022 was due to increased demand for materialsin the electron microscopy and structural analysis instruments and, to a lesser extent, chromatography and mass spectrometry instruments.
businesses. The increase in operatingsegment income margin for the segment wasresulted primarily due to a $108 million charge in 2020 related to a long-term supply contract (discussed in Note 8), profit on higher salesfrom strong volume pull through and productivity improvements, offset in part by strategic growth investments.
Specialty Diagnostics
Three Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$1,362 $1,430 (5)%
Operating Income Margin22.7 %27.9 %-5.2 pt
Sales in the Specialty Diagnostics segment decreased $68 million in the third quarter of 2021. Sales decreased $75 million (-5%) due to lower revenues at existing businesses. The favorable effects of currency translation resulted in an increase in revenues of $7 million. The decrease in revenues at existing businesses was due to decreased demand for COVID-19 testing products, offset in part by increased demand for clinical diagnostics and immunodiagnostics products and transplant diagnostics products.
Six months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$3,125 $2,868 9 %(3)%— %12 %
Segment income645 552 17 %
Segment income margin20.6 %19.3 %1.3 pt
The decrease in operating income margin for the segment was primarily due to strategic growth investments, sales mix and the decrease in sales, offset in part by a $13 million credit to cost of product revenue as a result of changing the method of accounting for inventories (discussed in Note 1).
Laboratory Products and Services
Three Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$3,487 $3,112 12 %
Operating Income Margin11.0 %11.4 %-0.4 pt
Sales in the Laboratory Products and Services segment increased $375 million in the third quarter of 2021. Sales increased $320 million (10%) due to higher revenues at existing businesses and $26 million due to an acquisition. The favorable effects of currency translation resulted in an increase in revenues of $29 million. The increase in organic revenues at existing businessesin the first six months of 2022 was primarily due to increased demand in each of the segment’s principal businesses: the researchelectron microscopy and safety market channel, the pharma services businesschromatography and the lab products business.
mass spectrometry businesses. The decreaseincrease in operatingsegment income margin for the segment wasresulted primarily due to strategic growth investments, substantially offset by profit on higher salesfrom strong volume pull through, productivity improvements and a $20 million credit to cost of product revenue as a result of changing the method of accounting for inventories (discussed in Note 1).
Other Income/Expense
The company reported other income of $14 million in the third quarter of 2021 compared to other expense of $39 million in the third quarter of 2020. In 2021, other income includes $25 million of gains on investments,business mix, offset in part by $20 million for amortization of bridge loan commitment fees related to the pending acquisition of PPD. In 2020, other expense includesstrategic growth investments.
2724

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
$37Specialty Diagnostics
Three months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$1,101 $1,235 (11)%(3)%— %(8)%
Segment income243 245 (1)%
Segment income margin22.1 %19.9 %2.2 pt
The decrease in organic revenues in the second quarter of 2022 was due to decreased demand, primarily driven by products addressing diagnosis of COVID-19, partially offset by growth in the immunodiagnostics and microbiology businesses, as well as our healthcare market channel. The impact of lower COVID-19 testing volume on segment income margin was more than offset by strong productivity improvements and positive business mix.
Six months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$2,583 $2,850 (9)%(2)%— %(7)%
Segment income596 673 (11)%
Segment income margin23.1 %23.6 %-0.5 pt
The decrease in organic revenues in the first six months of 2022 was due to decreased demand, primarily driven by products addressing diagnosis of COVID-19, partially offset by growth in the immunodiagnostics and transplant diagnostics businesses. The decrease in segment income margin was primarily due to lower COVID-19 testing volume, largely offset by productivity improvements.
Laboratory Products and BiopharmaServices
Three months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$5,537 $3,583 55 %(4)%48 %10 %
Segment income691 446 55 %
Segment income margin12.5 %12.4 %0.1 pt
The increase in organic revenues in the second quarter of 2022 was primarily due to higher sales across each of the segment’s businesses, with particular strength in the research and safety market channel and pharma services business and, to a lesser extent, the laboratory products business. The acquisition of PPD, the company’s clinical research business, contributed $1.72 billion of revenue during the second quarter. The increase in segment income margin was primarily due to strong productivity and the benefit of recent acquisitions, largely offset by strategic growth investments and unfavorable business mix.
Six months ended
Organic* (non-GAAP measure)
(Dollars in millions)July 2,
2022		July 3,
2021		Total
Change		Currency
Translation		Acquisitions/ Divestitures
Revenues$10,979 $7,180 53 %(3)%48 %8 %
Segment income1,311 977 34 %
Segment income margin11.9 %13.6 %-1.7 pt
The increase in organic revenues in the first six months of 2022 was primarily due to higher sales across each of the segment’s businesses, with particular strength in the research and safety market channel and pharma services business and, to a lesser extent, the laboratory products business. The acquisition of PPD, the company’s clinical research business, contributed $3.38 billion of revenue during the first six months of 2022. The decrease in segment income margin was primarily due to business mix and strategic growth investments, offset in part by the benefit of recent acquisitions.
*    Results may not sum due to rounding
25

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Non-operating Items
Three months endedSix months ended
July 2,July 3,July 2,July 3,
(Dollars in millions)2022202120222021
Net interest expense$112 $111 $230 $224 
GAAP other income/(expense)28 (3)(135)(186)
Adjusted other income/(expense) (non-GAAP measure)
10 5 14 19 
GAAP tax rate10.4 %10.7 %11.2 %13.2 %
Adjusted tax rate (non-GAAP measure)
13.0 %14.0 %13.6 %15.1 %
Net interest expense (interest expense less interest income) increased due primarily to the increase in debt to finance the acquisition of PPD and for general corporate purposes, largely offset by lower average interest rates. See additional discussion under the caption “Liquidity and Capital Resources” below.
GAAP other income/(expense) and adjusted 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. GAAP other income/(expense) in the second quarter and first six months of 2022 includes $18 million of costs for a terminated acquisition, primarily for amortizationnet gains and $123 million of bridge loan commitment feesnet losses on investments, respectively. In the first six months of 2022 and entering into currency hedging contracts.
Provision for Income Taxes2021 GAAP other income/(expense) also includes $26 million and $197 million, respectively, of losses on the early extinguishment of debt (Note 7).
The company's effectivecompany’s GAAP and adjusted tax rates decreased in 2022 compared to 2021 primarily due to releases of valuation allowances of $88 million and $175 million for the three and six months ended July 2, 2022, respectively, in jurisdictions where the deferred tax assets are now expected to be realized. The company’s 2022 GAAP tax rate was 12.5% foralso impacted by changes in tax rates and higher amortization expense as a result of 2021 acquisitions. In the thirdsecond quarter of 2021. During the quarter,2021 the company recorded a $96$162 million income tax benefit related to a capital loss resulting from certainon an intra-entity transactions. transfer of fixed assets.
The company expects its effective tax rate for all ofrates in both 2022 and 2021 will be between 11% and 13% based on currently forecasted rates of profitabilitywere also affected by relatively significant earnings in the countries in which the company conducts business and expected generation of foreignlower tax credits.jurisdictions. Due primarily to the non-deductibility of intangible asset amortization for tax purposes, the company’s cash payments for income taxes are higher than its income tax expense for financial reporting purposes and are expected to total approximately $1.9$1.35 billion in 2021. In the third quarter of 2020, the company’s2022.
The company expects its GAAP effective tax rate was 14.2%.in 2022 will be between 10% and 12% based on currently forecasted rates of profitability in the countries in which the company conducts business and expected generation of foreign tax credits. The effective tax rate can vary significantly from period to period as a result of discrete income tax factors and events. The company expects its adjusted tax rate will be between 13% and 13.5% in 2022.
The company has operations and a taxable presence in approximately 5070 countries outside the U.S. Some of these countries have lower tax rates than the U.S. The company’s ability to obtain a benefit from lower tax rates outside the U.S. is dependent on its relative levels of income in countries outside the U.S. and on the statutory tax rates in those countries. Based on the dispersion of the company’s non-U.S. income tax provision among many countries, the company believes that a change in the statutory tax rate in any individual country is not likely to materially affect the company’s income tax provision or net income, aside from any resulting one-time adjustment to the company’s deferred tax balances to reflect a new rate.

First Nine Months of 2021 Compared With First Nine Months of 2020
Nine Months Ended
(In millions)October 2,
2021		September 26,
2020		Total
Change		Currency
Translation		Acquisitions/ DivestituresOperations
Revenues
Life Sciences Solutions$11,481 $7,800 $3,681 $300 $185 $3,196 
Analytical Instruments4,344 3,488 856 110 — 746 
Specialty Diagnostics4,212 3,376 836 76 — 760 
Laboratory Products and Services10,667 8,629 2,038 228 156 1,654 
Eliminations(2,195)(1,625)(570)(23)— (547)
Consolidated Revenues$28,509 $21,668 $6,841 $691 $341 $5,809 
Sales in the first nine months of 2021 increased $6.84 billion from the first nine months of 2020. Aside from the effects of currency translation and acquisitions, revenues increased $5.81 billion (27%) primarily due to increased demand. The first quarter of 2021 had three extra selling days compared to the first quarter of 2020. The company's fourth quarter of 2021 will have four fewer selling days than the corresponding 2020 quarter. Sales of products that address COVID-19 testing and treatment increased $3.34 billion to $6.78 billion in the first nine months of 2021. Sales to customers in each of the company’s primary end markets grew. Sales growth was strong in each of the company’s primary geographic areas.
In the first nine months of 2021, total company operating income and operating income margin were $7.49 billion and 26.3%, respectively, compared with $4.72 billion and 21.8%, respectively, in the first nine months of 2020. The increase in operating income was primarily due to profit on higher sales and, to a lesser extent, sales mix, offset in part by strategic growth investments.
In the first nine months of 2021, the company recorded restructuring and other costs of $192 million (Note 12). In the first nine months of 2020, the company recorded restructuring and other costs of $65 million.
28

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Segment Results
Nine Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues
Life Sciences Solutions$11,481 $7,800 47 %
Analytical Instruments4,344 3,488 25 %
Specialty Diagnostics4,212 3,376 25 %
Laboratory Products and Services10,667 8,629 24 %
Eliminations(2,195)(1,625)35 %
Consolidated Revenues$28,509 $21,668 32 %
Segment Income
Life Sciences Solutions$5,818 $3,788 54 %
Analytical Instruments816 477 71 %
Specialty Diagnostics983 848 16 %
Laboratory Products and Services1,360 931 46 %
Subtotal Reportable Segments8,977 6,044 49 %
Cost of Revenues Charges(8)(5)
Selling, General and Administrative Charges(33)7 
Restructuring and Other Costs(151)(67)
Amortization of Acquisition-related Intangible Assets(1,295)(1,256)
Consolidated Operating Income$7,490 $4,723 59 %
Reportable Segments Income Margin31.5 %27.9 %
Consolidated Operating Income Margin26.3 %21.8 %
Income from the company’s reportable segments increased 49% to $8.98 billion in the first nine months of 2021 due primarily to profit on higher sales and, to a lesser extent, sales mix, offset in part by strategic growth investments.
Life Sciences Solutions
Nine Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$11,481 $7,800 47 %
Operating Income Margin50.7 %48.6 %2.1 pt
Sales in the Life Sciences Solutions segment increased $3.68 billion in the first nine months of 2021. Sales increased $3.20 billion (41%) due to higher revenues at existing businesses and $185 million due to acquisitions. The favorable effects of currency translation resulted in an increase in revenues of $300 million. The increase in revenues at existing businesses was driven by a combination of increased demand for testing to diagnose COVID-19 with higher sales of biosciences products and genetic sciences products and strong demand in each of the segment’s businesses.
The increase in operating income margin for the segment resulted primarily from profit on higher sales and, to a lesser extent, sales mix, offset in part by strategic growth investments.
29

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Analytical Instruments
Nine Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$4,344 $3,488 25 %
Operating Income Margin18.8 %13.7 %5.1 pt
Sales in the Analytical Instruments segment increased $856 million in the first nine months of 2021. Sales increased $746 million (21%) due to higher revenues at existing businesses. The favorable effects of currency translation resulted in an increase in revenues of $110 million. The increase in revenues at existing businesses was due to increased demand for products sold by each of the segment’s primary businesses with particular strength in chromatography and mass spectrometry instruments as well as materials and structural analysis instruments.
The increase in operating income margin for the segment was primarily due to profit on higher sales and, to a lesser extent, a $108 million charge in 2020 related to a long-term supply contract (discussed in Note 8) and productivity improvements in 2021, offset in part by strategic growth investments and, to a lesser extent, sales mix.
Specialty Diagnostics
Nine Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$4,212 $3,376 25 %
Operating Income Margin23.3 %25.1 %-1.8 pt
Sales in the Specialty Diagnostics segment increased $836 million in the first nine months of 2021. Sales increased $760 million (23%) due to higher revenues at existing businesses. The favorable effects of currency translation resulted in an increase in revenues of $76 million. The increase in revenues at existing businesses was due to higher demand primarily driven by products addressing treatment of COVID-19, with particular strength in sales of products sold through the segment's healthcare market channel, and to a lesser extent, clinical diagnostics and immunodiagnostics products.
The decrease in operating income margin for the segment was primarily due to inflationary cost increases, net of productivity improvements, sales mix and strategic investments, offset in part by profit on higher sales and, to a lesser extent, a $13 million credit to cost of product revenue as a result of changing the method of accounting for inventories (discussed in Note 1).
Laboratory Products and Services
Nine Months Ended
October 2,September 26,
(Dollars in millions)20212020Change
Revenues$10,667 $8,629 24 %
Operating Income Margin12.8 %10.8 %2.0 pt
Sales in the Laboratory Products and Services segment increased $2.04 billion to $10.67 billion in 2021. Sales increased $1.65 billion (19%) due to higher revenues at existing businesses and $156 million due to an acquisition. The favorable effects of currency translation resulted in an increase in revenues of $228 million. The increase in revenues at existing businesses was primarily due to increased demand in each of the segment’s principal businesses with particular strength in products sold through its research and safety market channel and, to a lesser extent, its laboratory products business and pharma services business.
The increase in operating income margin for the segment was primarily due to profit on higher sales and, to a lesser extent, acquisitions, sales mix and a $20 million credit to cost of product revenue as a result of changing the method of accounting for inventories (discussed in Note 1), offset in part by strategic growth investments.
30

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations (continued)
Other Expense
The company reported other expense of $174 million and $36 million in the first nine months of 2021 and 2020, respectively. In 2021, other expense includes $197 million of losses on the early extinguishment of debt and $26 million for amortization of bridge loan commitment fees related to the pending acquisition of PPD, offset in part by $23 million of gains on investments. In 2020, other expense includes $81 million of costs related to a terminated acquisition, primarily for entering into currency hedging contracts and amortization of loan commitment fees.
Provision for Income Taxes
The company recorded a $906 million provision for income taxes in the first nine months of 2021. During the second and third quarters of 2021, the company recorded income tax benefits on intra-entity transactions totaling $258 million. The company recorded a $456 million provision for income taxes in the first nine months of 2020. In the second quarter of 2020, the company implemented foreign tax credit planning in Sweden which resulted in $96 million of foreign tax credits, with no related incremental U.S. income tax expense.

Recent Accounting Pronouncements
A description of recently issued accounting standards is included under the heading “Recent Accounting Pronouncements” in Note 1.

Liquidity and Capital Resources
Consolidated working capital (current assets less current liabilities) was $16.97 billion at October 2, 2021, compared with $11.65 billion at December 31, 2020. Included in working capital were cash and cash equivalents of $12.03 billion at October 2, 2021 and $10.33 billion at December 31, 2020.
First Nine Months of 2021
Cash provided by operating activities during the first nine months of 2021 was $6.86 billion. Cash provided by income was offset in part by investments in working capital. A decrease in accounts receivable provided $111 million of cash. An increase in inventories used cash of $916 million, primarily to support growth in sales. Changes in other assets and other liabilities used cash of $582 million primarily due to the timing of payments for interest and compensation. Cash payments for income taxes increased to $1.56 billion during the first nine months of 2021, compared with $656 million in the first nine months of 2020.
During the first nine months of 2021, the company’s investing activities used $3.24 billion of cash. Acquisitions used cash of $1.52 billion. The company's investing activities also included the purchase of $1.69 billion of property, plant and equipment for capacity and capability investments.
The company’s financing activities used $1.89 billion ofproven growth strategy has enabled it to generate free cash duringflow as well as access the first nine months of 2021. Repayment of senior notes used cash of $2.81 billion. Issuance of debt provided $3.12 billion of cash. The company’s financing activities also included the repurchase of $2.00 billion of the company's common stock and the payment of $292 million in cash dividends. On November 5, 2020, the Board of Directors authorized the repurchase of up to $2.50 billion of the company’s common stock. On September 23, 2021 the Board of Directors replaced the existing authorization to repurchase the company’s common stock, of which $500 million was remaining, with a new authorization to repurchase up to $3.00 billion of the company’s common stock. At November 4, 2021, authorization remained for $3.00 billion of future repurchases of the company’s common stock. As discussed in Note 7, early in October 2021, the company issued senior notes for net proceeds of $11.83 billion.
The company's commitments for purchases of property, plant and equipment, contractual obligations and other commercial commitments did not change materially between December 31, 2020 and October 2, 2021 except for the agreement to acquire PPD, discussed in Note 2.capital markets. The company expects that for all of 2021, expenditures for property, plantdeploys its capital primarily via mergers and equipment, net of disposals, will be between $2.5acquisitions and $2.7 billion.secondarily via share buybacks and dividends.
As of October 2, 2021, the company’s short-term debt totaled $19 million. The company has a revolving credit facility with a bank group that provides up to $3.00 billion of unsecured multi-currency revolving credit (Note 7). If the company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of October 2, 2021, no borrowings were outstanding
31

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources (continued)
under the company’s revolving credit facility, although available capacity was reduced by approximately $4 million as a result of outstanding letters of credit.
July 2,December 31,
(In millions)20222021
Cash and cash equivalents$1,888 $4,477 
Total debt30,260 34,870 
Approximately half of the company’s cash balances and cash flows from operations are from outside the U.S. The company uses its non-U.S. cash for needs outside of the U.S. including acquisitions, capacity expansion, and repayment of acquisition-related intercompanythird-party foreign debt to the U.S.by foreign subsidiaries. In addition, the company also transfers cash to the U.S. using non-taxable returns of capital as well as dividends where the related U.S. dividend received deduction or foreign tax credit equals any tax
26

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Liquidity and Capital Resources (continued)
cost arising from the dividends. As a result of using such means of transferring cash to the U.S., the company does not expect any material adverse liquidity effects from its significant non-U.S. cash balances for the foreseeable future.
The company believes that its existing cash and cash equivalents and its future cash flow from operations together with available borrowing capacity under its revolving credit agreement will be sufficient to meet the cash requirements of its existing businesses for the foreseeable future, including at least the next 24 months andmonths.
As of July 2, 2022, the company’s short-term debt totaled $1.01 billion. The company has a revolving credit facility with a bank group that provides up to fund$5.00 billion of unsecured multi-currency revolving credit (Note 7). If the pending PPD acquisition.company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of July 2, 2022, no borrowings were outstanding under the company’s revolving credit facility, although available capacity was reduced by immaterial outstanding letters of credit.
First Nine Months of 2020
 Six months ended
 July 2,July 3,
(In millions)20222021
Net cash provided by operating activities$3,730 $4,205 
Net cash used in investing activities(1,089)(2,624)
Net cash used in financing activities(5,050)(4,926)
Free cash flow (non-GAAP measure)
2,598 3,042 
Cash provided by operating activities was $4.95 billion duringOperating Activities
During the first ninesix months of 2020. Cash2022, cash provided by income was offset in part by investments in working capital. IncreasesAn increase in accounts receivable and inventories used cash of $858 million and $427 million, respectively,$0.87 billion, primarily to support growth in sales. Changes in other assets and other liabilities providedused cash of $1.04$0.74 billion primarily due to the timing of payments for compensation. Cash payments for income taxes were $0.83 billion during the first six months of 2022.
During the first six months of 2021, cash provided by income was offset in part by investments in working capital. A decrease in accounts receivable provided $0.25 billion of cash. An increase in inventories used cash of $0.62 billion, primarily to support growth in sales. Changes in other assets and other liabilities used cash of $1.06 billion primarily due to the timing of payments for compensation and income taxes. Cash payments for income taxes totaled $656 million.were $1.27 billion during the first six months of 2021.
Investing Activities
During the first ninesix months of 2020, the2022, acquisitions used cash of $0.04 billion. The company’s investing activities used $884 millionalso included the purchase of cash, principally for the purchase$1.15 billion of property, plant and equipment.equipment for capacity and capability investments.
During the first six months of 2021, acquisitions used cash of $1.43 billion. The company’s financinginvesting activities provided $1.01also included the purchase of $1.17 billion of cash duringproperty, plant and equipment for capacity and capability investments.
Financing Activities
During the first ninesix months of 2020. Issuance2022, repayment of senior notes provided cash of $3.46 billion. Repayment of senior notesand net commercial paper activity used cash of $712 million.$0.38 billion and $2.46 billion, respectively. The company’s financing activities also included the repurchase of $1.50$2.00 billion of the company’s common stock (3.3 million shares) and the payment of $250$0.22 billion in cash dividends. On September 23, 2021, the Board of Directors authorized the repurchase of up to $3.00 billion of the company’s common stock. At August 5, 2022, authorization remained for $1.00 billion of future repurchases of the company’s common stock.
During the first six months of 2021 repayment of senior notes used cash of $2.80 billion. The company’s financing activities also included the repurchase of $2.00 billion of the company’s common stock (4.1 million shares) and the payment of $0.19 billion in cash dividends.
The company’s commitments for purchases of property, plant and equipment, contractual obligations and other commercial commitments did not change materially between December 31, 2021 and July 2, 2022. The company expects that for all of 2022, expenditures for property, plant and equipment, net of disposals, will be between $2.5 and $2.7 billion.
27

THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Non-GAAP Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we use certain non-GAAP financial measures such as organic revenue growth, which is reported revenue growth, excluding the impacts of revenues from acquired/divested businesses and the effects of currency translation. We report organic revenue growth because Thermo Fisher management believes that in order to understand the company’s short-term and long-term financial trends, investors may wish to consider the impact of acquisitions/divestitures and foreign currency translation on revenues. Thermo Fisher management uses organic revenue growth to forecast and evaluate the operational performance of the company as well as to compare revenues of current periods to prior periods.
We report adjusted operating income, adjusted operating income margin, adjusted other income/(expense), adjusted tax rate, and adjusted EPS. We believe that the use of these non-GAAP financial measures, in addition to GAAP financial 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 core operating performance, especially when comparing such results to previous periods, forecasts, 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. To calculate these measures we exclude, as applicable:
•Certain acquisition-related costs, including charges for the sale of inventories revalued at the date of acquisition, significant transaction/acquisition-related costs, including changes in estimates of contingent acquisition-related consideration, and other costs associated with obtaining short-term financing commitments for pending/recent acquisitions. We exclude these costs because we do not believe they are indicative of our normal operating costs.
•Costs/income associated with restructuring activities, such as reducing overhead and consolidating facilities. We exclude these costs because we believe that the costs related to restructuring activities are not indicative of our normal operating costs.
•Equity in earnings/losses of unconsolidated entities; impairments of long-lived assets; and certain other gains and losses that are either isolated or cannot be expected to occur again with any predictability, including gains/losses on investments, the sale of businesses, product lines, and real estate, significant litigation-related matters, curtailments/settlements of pension plans, and the early retirement of debt. We exclude these items because they are outside of our normal operations and/or, in certain cases, are difficult to forecast accurately for future periods.
•The expense 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 up to 20 years. 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.
•The tax impacts of the above items and the impact of significant tax audits or events (such as changes in deferred taxes from enacted tax rate/law changes), the latter of which we exclude because they are outside of our normal operations and difficult to forecast accurately for future periods.
We report free cash flow, which is operating cash flow excluding net capital expenditures, to provide a view of the continuing operations’ ability to generate cash for use in acquisitions and other investing and financing activities. The company also uses this measure as an indication of the strength of the company. Free cash flow is not a measure of cash available for discretionary expenditures since we have certain non-discretionary obligations such as debt service that are not deducted from the measure.
The non-GAAP financial measures of Thermo Fisher Scientific’s results of operations and cash flows included in this Form 10-Q are not meant to be considered superior to or a substitute for Thermo Fisher Scientific’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 within the “Overview” and “Results of Operations” sections and below.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Non-GAAP Measures (Continued)

Three months endedSix months ended
July 2,July 3,July 2,July 3,
(Dollars in millions except per share amounts)2022202120222021
Reconciliation of adjusted operating income
GAAP operating income$2,001 $2,163 $4,822 $5,212 
Cost of revenues adjustments (a)8 — 19 8 
Selling, general and administrative expenses adjustments (b)(28)(42)(21)(26)
Restructuring and other costs (c)24 119 26 133 
Amortization of acquisition-related intangible assets600 449 1,209 872 
Adjusted operating income (non-GAAP measure)
$2,605 $2,689 $6,055 $6,199 
Reconciliation of adjusted operating income margin
GAAP operating income margin18.2 %23.3 %21.2 %27.2 %
Cost of revenues adjustments (a)0.1 %0.0 %0.1 %0.0 %
Selling, general and administrative expenses adjustments (b)(0.3)%(0.4)%(0.1)%(0.1)%
Restructuring and other costs (c)0.2 %1.3 %0.1 %0.7 %
Amortization of acquisition-related intangible assets5.5 %4.8 %5.3 %4.5 %
Adjusted operating income margin (non-GAAP measure)
23.7 %29.0 %26.6 %32.3 %
Reconciliation of adjusted other income/(expense)
GAAP other income/(expense)$28 $(3)$(135)$(186)
Adjustments (d)(18)8 149 205 
Adjusted other income/(expense) (non-GAAP measure)
$10 $5 $14 $19 
Reconciliation of adjusted tax rate
GAAP tax rate10.4 %10.7 %11.2 %13.2 %
Adjustments (e)2.6 %3.3 %2.4 %1.9 %
Adjusted tax rate (non-GAAP measure)
13.0 %14.0 %13.6 %15.1 %
Reconciliation of adjusted earnings per share
GAAP diluted earnings per share (EPS) attributable to Thermo Fisher Scientific Inc.$4.22 $4.61 $9.83 $10.50 
Cost of revenues adjustments (a)0.02 — 0.05 0.02 
Selling, general and administrative expenses adjustments (b)(0.07)(0.10)(0.05)(0.07)
Restructuring and other costs (c)0.06 0.30 0.06 0.34 
Amortization of acquisition-related intangible assets1.52 1.13 3.06 2.20 
Other income/expense adjustments (d)(0.05)0.02 0.38 0.51 
Provision for income taxes adjustments (e)(0.32)(0.36)(0.75)(0.69)
Equity in earnings/losses of unconsolidated entities0.13 — 0.18 — 
Adjusted EPS (non-GAAP measure)
$5.51 $5.60 $12.76 $12.81 
Reconciliation of free cash flow
GAAP net cash provided by operating activities$1,528 $2,227 $3,730 $4,205 
Purchases of property, plant and equipment(506)(540)(1,146)(1,168)
Proceeds from sale of property, plant and equipment12 — 14 5 
Free cash flow (non-GAAP measure)
$1,034 $1,687 $2,598 $3,042 
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THERMO FISHER SCIENTIFIC INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Non-GAAP Measures (Continued)
(a) Adjusted results exclude charges for the sale of inventories revalued at the date of acquisition.
(b) Adjusted results exclude certain third-party expenses, principally transaction/integration costs related to recent acquisitions and charges/credits for changes in estimates of contingent acquisition consideration.
(c) Adjusted results exclude restructuring and other costs consisting principally of severance, abandoned facility and other expenses of headcount reductions within several businesses and real estate consolidations. Adjusted results in Q1 2021 and Q2 2021 also exclude $13 million of charges for compensation due to employees at recently acquired businesses at the date of acquisition and $110 million of charges for impairment of acquired technology, respectively.
(d) Adjusted results exclude net gains/losses on investments and losses on the early extinguishment of debt. Adjusted results in Q2 2021 also exclude amortization of bridge loan commitment fees related to a pending acquisition.
(e) Adjusted provision for income taxes in 2022 and 2021 excludes incremental tax impacts for the pre-tax reconciling items and incremental tax impacts as a result of tax rate/law changes.
Critical Accounting Policies and Estimates
Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements of the company’s Annual Report on Form 10-K for 2021 describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. There have been no significant changes in the company’s critical accounting policies during the first six months of 2022.
Recent Accounting Pronouncements
A description of recently issued accounting standards is included under the heading “Recent Accounting Pronouncements” in Note 1.

Item 3.    Quantitative and Qualitative Disclosures About Market Risk
The company'scompany’s exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 2020.2021.

Item 4.    Controls and Procedures
Management’s Evaluation of Disclosure Controls and Procedures
The company’s management, with the participation of the company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on such evaluation, the company’s chief executive officer and chief financial officer concluded that, as of the end of such period, the company’s disclosure controls and procedures were effective at the reasonable assurance level.
Changes in Internal Control over Financial Reporting
There have been no changes in the company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended OctoberJuly 2, 2021,2022, that have materially affected or are reasonably likely to materially affect the company’s internal control over financial reporting.

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PART II    OTHER INFORMATION
Item 1.    Legal Proceedings
There are various lawsuits and claims against the company involving product liability, intellectual property, employment and commercial issues. See “Note 8 to our Condensed Consolidated Financial Statements – Commitments and Contingencies.”

Item 1A.    Risk Factors
The risks that we believe are material to our investors are discussed in the company’s Annual Report on Form 10-K for the year ended December 31, 20202021 under the caption “Risk Factors,” which is on file with the SEC. Except as set forth herein, there have been no material changes during the nine months ended October 2, 2021 to our previously reported Risk Factors.
Risks Relating to Our Proposed Acquisition of PPD
Regulatory approvals necessary for our acquisition of PPD may not be received, may take longer than expected or may impose conditions that are not presently anticipated or that could have an adverse effect on the combined company following the PPD acquisition. Before the PPD acquisition may be completed, we must obtain certain required regulatory approvals, waivers or consents. These regulators may impose conditions on the completion of the transaction. Such conditions could have the effect of delaying or preventing completion of the transaction, causing us to incur additional costs or limiting the revenues of the combined company following the transaction, any of which might have an adverse effect on the combined company following the transaction. Additionally, any delay in closing may adversely affect the business of PPD and therefore the combined company following the transaction, including an adverse effect on PPD’s ability to retain employees during the pendency of the transaction or on PPD’s relationships with its vendors, customers and other parties if such vendors, customers or other parties attempt to negotiate changes in existing business relationships, consider entering into business relationships with parties other than PPD or delay or defer decisions concerning their business with PPD during the pendency of the transaction. On July 16, 2021, we and PPD each received a request for additional information and documentary materials (collectively, the “Second Request”) from the U.S. Federal Trade Commission (FTC), in connection with the FTC’s review of the proposed merger. The effect of the Second Request is to extend the waiting period imposed under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”), until the 30th day after substantial compliance by us and PPD with the Second Request, unless the waiting period is terminated earlier by the FTC. As of October 22, 2021, both we and PPD had certified substantial compliance with the Second Request. The transaction remains subject to the satisfaction of customary closing conditions, including termination of the HSR Act waiting period and receipt of applicable regulatory approvals outside the U.S. Subject to the satisfaction of the required closing conditions, we continue to expect the merger to be completed by the end of 2021.
Combining PPD with us may be more difficult, costly or time consuming than expected and the anticipated benefits and cost savings of the transaction may not be fully realized. The success of the PPD acquisition, including the realization of anticipated benefits and cost savings, will depend, in part, on our ability to successfully combine our and PPD’s businesses. The integration may be more difficult, costly or time consuming than expected. It is possible that the integration process could result in the loss of key employees or the disruption of each company’s ongoing businesses or that the alignment of standards, controls, procedures and policies may adversely affect the combined company’s ability to maintain relationships with clients, customers, suppliers and employees or to fully achieve the anticipated benefits and cost savings of the transaction. The loss of key employees could adversely affect our ability to successfully conduct our business in the markets in which PPD now operates, which could have an adverse effect on our financial results. Other potential difficulties of combining our and PPD’s businesses include unanticipated issues in integrating logistics, information communications and other systems.
If we experience difficulties with the integration process, the anticipated benefits of the PPD acquisition may not be realized fully or at all, or may take longer to realize than expected. Integration efforts between the two companies may also divert management attention and resources. These integration matters could have an adverse effect on each of us and PPD during this transition period and for an undetermined period after completion of the PPD acquisition on the combined company.
Risks Relating to Financial Profile
We have outstanding debt, and our debt will increase as a result of additional debt we expect to incur to finance the PPD acquisition. Our existing and future indebtedness may restrict our investment opportunities or limit our activities and negatively impact our credit ratings. As of October 2, 2021, we had approximately $21.71 billion in outstanding indebtedness and we issued approximately $11.83 billion of new debt during October. In addition, we have availability to borrow under a revolving credit facility that provides for up to $3.00 billion of unsecured multi-currency revolving credit. We expect to incur additional indebtedness to fund a portion of the purchase price of the PPD acquisition. We may also obtain
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THERMO FISHER SCIENTIFIC INC.
Risk Factors (continued)

additional long-term debt and lines of credit to meet future financing needs, which would have the effect of increasing our total leverage.
Our leverage could have negative consequences, including increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and limiting our ability to acquire new products and technologies through strategic acquisitions.
Our ability to make scheduled payments, refinance our obligations or obtain additional financing will depend on our future operating performance and on economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient cash flow to meet our obligations. If we are unable to service our debt, refinance our existing debt or obtain additional financing, we may be forced to delay strategic acquisitions, capital expenditures or research and development expenditures.
Additionally, the agreements governing our debt require that we maintain certain financial ratios, and contain affirmative and negative covenants that restrict our activities by, among other limitations, limiting our ability to incur additional indebtedness, merge or consolidate with other entities, make investments, create liens, sell assets and enter into transactions with affiliates. 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 Interest Coverage Ratio of 3.5:1.0 as of the last day of any fiscal quarter.
Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control such as the impact of public health epidemics/pandemics like COVID-19, foreign exchange rates and interest rates. Our failure to comply with any of these restrictions or covenants may result in an event of default under the applicable debt instrument, which could permit acceleration of the debt under that instrument and require us to prepay that debt before its scheduled due date. Also, an acceleration of the debt under certain of our debt instruments would trigger an event of default under other of our debt instruments.

Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
There was no share repurchase activity for the company's thirdsecond quarter of 2021.2022. On November 5, 2020,September 23, 2021, the Board of Directors authorized the repurchase of up to $2.50 billion of the company’s common stock. On September 23, 2021 the Board of Directors replaced the existing authorization to repurchase the company’s common stock, of which $500 million was remaining, with a new authorization to repurchase up to $3.00 billion of the company’s common stock. At OctoberJuly 2, 2021, $3.002022, $1.00 billion was available for future repurchases of the company’s common stock under this authorization.

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THERMO FISHER SCIENTIFIC INC.
Item 6.    Exhibits
Exhibit
Number		Description of Exhibit
4.1
Twenty-Second Supplemental Indenture, dated as of August 23, 2021, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed August 23, 2021 [File No. 1-8002] and incorporated in this document by reference).
4.2
Third Supplemental Indenture, dated as of October 18, 2021, among Thermo Fisher International, as issuer, the Company, as guarantor, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 18, 2021 [File No. 1-8002] and incorporated in this document by reference).
4.3
Twenty-Third Supplemental Indenture, dated as of October 22, 2021, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 22, 2021 [File No. 1-8002] and incorporated in this document by reference).
22
31.1
31.2
32.1
32.2
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCHXBRL Taxonomy Extension Schema Document.
101.CALXBRL Taxonomy Calculation Linkbase Document.
101.DEFXBRL Taxonomy Definition Linkbase Document.
101.LABXBRL Taxonomy Label Linkbase Document.
101.PREXBRL Taxonomy Presentation Linkbase Document.
104Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
The Registrant agrees, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, to furnish to the Commission, upon request, a copy of each instrument with respect to long-term debt of the Registrant or its consolidated subsidiaries.
 _______________________
*    Indicates management contract or compensatory plan, contract or arrangement.
**    Certification is not deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date:November 4, 2021August 5, 2022THERMO FISHER SCIENTIFIC INC.
/s/ Stephen Williamson
Stephen Williamson
Senior Vice President and Chief Financial Officer
/s/ Joseph R. Holmes
Joseph R. Holmes
Vice President and Chief Accounting Officer

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