More Related Content Similar to thermo fisher 02CD4A18-7BC2-44BB-869A-463BE382B07C_ReconciliationofFinancialInformationQ42008 Similar to thermo fisher 02CD4A18-7BC2-44BB-869A-463BE382B07C_ReconciliationofFinancialInformationQ42008 (19) thermo fisher 02CD4A18-7BC2-44BB-869A-463BE382B07C_ReconciliationofFinancialInformationQ420081. February 4, 2009
THERMO FISHER SCIENTIFIC
Reconciliation of Financial Information
Q4-2008
1. GAAP P&L (as reported): 2004 to 2008
2. Reconciliation of GAAP to Adjusted P&L: 2004 to 2008
3. Business Segment Revenue and Operating Income: 2004 to 2008
4. Balance Sheet (as reported): 2004 to 2008
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally accepted accounting principles (GAAP), we present certain non-GAAP
financial measures herein (identified as quot;adjustedquot;), which exclude, to the extent such item would have been included in the most directly comparable
GAAP financial measure: certain charges to cost of revenues, principally associated with acquisition accounting; restructuring and other costs/income;
amortization of acquisition-related intangible assets; certain other gains and losses that are either isolated or cannot be expected to occur again with any
regularity or predictability, such as those arising from the sale of a business or real estate, the sale of our shares in Newport Corporation and Thoratec
Corporation (as of July 2, 2005, we no longer held shares of these companies), charges for the acceleration of stock-based compensation expense due
to the change in control occurring at the date of the Fisher merger and costs associated with the early retirement of debt and debt facilities; the tax
provisions/benefits related to the previous items; benefit from tax credit carryforwards; the impact of significant tax audits or events (such as the one-time
effect on deferred tax balances of enacted changes in tax rates), and discontinued operations. We exclude these items because they are outside of our
normal operations and we believe that the inclusion of such non-GAAP measures helps investors to gain a better understanding of our core operating
results. For comparability purposes, prior period consolidated adjusted results prior to 2006 reflect the pro forma effect of stock option expense as if it
had been required in that period.
Thermo Fisher's management uses these non-GAAP measures, in addition to GAAP financial measures, as the basis for measuring the company's
core operating performance and comparing such performance to that of prior periods and to the performance of our competitors. We believe that this
allows for comparisons of operating results that are consistent over time. Such measures are also used by management in their financial and operating
decision making and for compensation purposes.
We may also use the non-GAAP financial measure free cash flow, which is cash flow from continuing operations after deducting net capital expenditures.
Thermo Fisher’s management uses free cash flow to help estimate the resources available for strategic opportunities such as making acquisitions, and
uses this measure in making operating decisions and allocating financial resources.
The non-GAAP financial measures of Thermo Fisher's results of operations presented herein are not meant to be considered superior to or a substitute for
Thermo Fisher's results of operations prepared in accordance with GAAP. Reconciliations of such non-GAAP financial measures to the most directly
comparable GAAP financial measures are set forth in the accompanying tables.
Page 1 of 5
2. Thermo Fisher Scientific
GAAP P&L (as reported)
(In millions except EPS)
2004 2005 2006 Q1-07 Q2-07 Q3-07 Q4-07 2007 Q1-08 Q2-08 Q3-08 Q4-08 2008
Revenues 2,206.0 2,633.0 3,791.6 2,338.2 2,385.9 2,401.2 2,621.1 9,746.4 2,554.0 2,709.6 2,588.1 2,646.3 10,498.0
Cost of Revenues 1,191.5 1,438.1 2,210.2 1,428.1 1,419.1 1,422.3 1,550.8 5,820.3 1,503.9 1,590.8 1,523.9 1,549.0 6,167.6
SG&A 603.6 684.1 952.7 511.2 514.7 515.8 558.0 2,099.7 541.6 578.0 548.7 545.4 2,213.7
Amortization of Acquisition-related Intangible Assets 22.9 77.6 170.8 139.3 142.1 141.5 148.2 571.1 151.2 151.6 152.0 148.0 602.8
R&D 134.7 152.8 170.2 59.8 58.7 58.8 61.4 238.7 62.0 64.4 61.8 60.9 249.1
Restructuring and Other Costs (Income), Net 15.8 16.9 45.7 7.4 8.3 8.8 17.7 42.2 4.9 (5.4) 15.4 20.5 35.4
Operating Income 237.5 263.5 242.0 192.4 243.0 254.0 285.0 974.4 290.4 330.2 286.3 322.5 1,229.4
Interest Income 9.0 11.6 16.4 8.9 10.6 13.6 13.4 46.5 10.1 15.1 14.9 11.6 51.7
Interest Expense (11.0) (26.7) (51.9) (37.2) (33.2) (32.5) (36.9) (139.8) (30.4) (36.6) (34.1) (28.8) (129.9)
Other Income (Expense), Net 23.7 37.5 2.9 1.6 1.9 0.2 (3.5) 0.2 7.5 (1.2) (2.9) (5.0) (1.6)
Income from Continuing Operations Before Income Taxes 259.2 285.9 209.4 165.7 222.3 235.3 258.0 881.3 277.6 307.5 264.2 300.3 1,149.6
Income Tax (Provision) Benefit (40.8) (87.6) (43.1) (26.9) (34.4) (16.7) (23.7) (101.7) (44.2) (61.2) (45.9) (9.6) (160.9)
Income from Continuing Operations 218.4 198.3 166.3 138.8 187.9 218.6 234.3 779.6 233.4 246.3 218.3 290.7 988.7
Income from Discontinued Operations, Net of Tax 143.4 24.9 2.6 0.1 (24.0) (0.1) 5.5 (18.5) (0.4) 3.2 3.2 (0.5) 5.5
Net Income 361.8 223.2 168.9 138.9 163.9 218.5 239.8 761.1 233.0 249.5 221.5 290.2 994.2
Add Back:
Interest - Convertible Debentures (net of tax) 1.6 1.6 1.6 - - - - - - - - - -
Diluted Shares 167.6 165.3 203.7 441.1 446.5 446.6 440.7 443.7 436.2 437.2 438.5 427.4 434.8
GAAP Diluted EPS 2.17 1.36 0.84 0.31 0.37 0.49 0.54 1.72 0.53 0.57 0.51 0.68 2.29
Gross Margin 46.0% 45.4% 41.4% 37.6% 39.3% 39.5% 39.7% 39.0% 39.9% 40.2% 39.9% 40.3% 40.1%
SG&A 28.4% 28.9% 29.3% 26.5% 26.3% 26.1% 25.8% 26.2% 25.9% 25.8% 25.9% 25.1% 25.6%
R&D 6.1% 5.8% 4.5% 2.6% 2.5% 2.4% 2.3% 2.4% 2.4% 2.4% 2.4% 2.3% 2.4%
Operating Margin 10.8% 10.0% 6.4% 8.2% 10.2% 10.6% 10.9% 10.0% 11.4% 12.2% 11.1% 12.2% 11.7%
Pre-tax Margin 11.8% 10.9% 5.5% 7.1% 9.3% 9.8% 9.8% 9.0% 10.9% 11.3% 10.2% 11.3% 11.0%
Tax Rate 15.8% 30.6% 20.6% 16.2% 15.5% 7.1% 9.2% 11.5% 15.9% 19.9% 17.4% 3.2% 14.0%
Net Margin 16.4% 8.5% 4.5% 5.9% 6.9% 9.1% 9.1% 7.8% 9.1% 9.2% 8.6% 11.0% 9.5%
Equity Compensation Expense included in GAAP P&L above - - 32.6 13.8 12.3 13.2 11.8 51.1 11.0 16.7 15.8 13.6 57.1
Equity Compensation Acceleration Charges included in GAAP P&L above - - 36.7 - - - - - - - - - -
Depreciation included in GAAP P&L above 43.3 45.6 69.9 46.0 45.0 46.1 48.6 185.7 47.6 48.2 47.7 46.4 189.9
Book to Bill Ratio (a) 1.00 1.02 1.02 1.00 1.01 1.01 1.00 1.01 1.01 1.00 1.01 0.98 1.00
GAAP Operating Cash Flows From Continuing Operations 250.0 272.8 407.5 218.5 337.9 394.2 534.6 1,485.2 243.2 347.1 370.8 460.7 1,421.8
Net Capital Expenditures (44.5) (27.4) (71.0) (39.2) (18.5) (45.6) (53.0) (156.3) (53.3) (50.5) (46.2) (99.0) (249.0)
Free Cash Flow 205.5 245.4 336.5 179.3 319.4 348.6 481.6 1,328.9 189.9 296.6 324.6 361.7 1,172.8
(a) Book to Bill Ratio for full year 2006 includes only the legacy Thermo businesses.
Page 2 of 5
3. Thermo Fisher Scientific
Reconciliation of GAAP to Adjusted P&L
(In millions except EPS)
2004 2005 2006 Q1-07 Q2-07 Q3-07 Q4-07 2007 Q1-08 Q2-08 Q3-08 Q4-08 2008
GAAP Operating Income 237.5 263.5 242.0 192.4 243.0 254.0 285.0 974.4 290.4 330.2 286.3 322.5 1,229.4
Cost of Revenues Charges (a) 3.3 13.4 77.7 36.4 11.2 0.4 1.2 49.2 0.6 0.2 0.0 0.7 1.5
Restructuring and Other Costs (Income), Net (b) 15.8 16.9 45.7 7.4 8.3 8.8 17.7 42.2 4.9 (5.4) 15.4 20.5 35.4
Pro Forma Stock Option Compensation Expense (c) (17.8) (20.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Equity Compensation Acceleration Charges (d) 0.0 0.0 36.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortization of Acquisition-related Intangible Assets 22.9 77.6 170.8 139.3 142.1 141.5 148.2 571.1 151.2 151.6 152.0 148.0 602.8
Adjusted Operating Income 261.7 350.5 572.9 375.5 404.6 404.7 452.1 1,636.9 447.1 476.6 453.7 491.7 1,869.1
GAAP Operating Income Margin 10.8% 10.0% 6.4% 8.2% 10.2% 10.6% 10.9% 10.0% 11.4% 12.2% 11.1% 12.2% 11.7%
Cost of Revenues Charges (a) 0.2% 0.5% 2.0% 1.6% 0.5% 0.0% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0%
Restructuring and Other Costs (Income), Net (b) 0.7% 0.6% 1.2% 0.3% 0.3% 0.4% 0.7% 0.4% 0.2% -0.2% 0.6% 0.8% 0.3%
Pro Forma Stock Option Compensation Expense (c) -0.8% -0.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Equity Compensation Acceleration Charges (d) 0.0% 0.0% 1.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Amortization of Acquisition-related Intangible Assets 1.0% 3.0% 4.5% 6.0% 6.0% 5.9% 5.6% 5.9% 5.9% 5.6% 5.8% 5.6% 5.8%
Adjusted Operating Income Margin 11.9% 13.3% 15.1% 16.1% 17.0% 16.9% 17.2% 16.8% 17.5% 17.6% 17.5% 18.6% 17.8%
GAAP Net Income 361.8 223.2 168.9 138.9 163.9 218.5 239.8 761.1 233.0 249.5 221.5 290.2 994.2
Cost of Revenues Charges (a) 3.3 13.4 77.7 36.4 11.2 0.4 1.2 49.2 0.6 0.2 0.0 0.7 1.5
Restructuring and Other Costs (Income), Net (b) 15.8 16.9 45.7 7.4 8.3 8.8 17.7 42.2 4.9 (5.4) 15.4 20.5 35.4
Pro Forma Stock Option Compensation Expense (c) (17.8) (20.9) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Equity Compensation Acceleration Charges (d) 0.0 0.0 36.7 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Amortization of Acquisition-related Intangible Assets 22.9 77.6 170.8 139.3 142.1 141.5 148.2 571.1 151.2 151.6 152.0 148.0 602.8
Gain/Loss on Extinguishment of Debt Facilities 0.0 0.0 0.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Other Income, Net (e) (9.6) (27.6) 0.0 0.0 0.1 0.5 5.4 6.0 (9.1) 0.7 0.7 4.5 (3.2)
Income Tax (Provision) Benefit (f) (36.2) (16.2) (110.5) (60.4) (58.5) (78.5) (73.3) (270.7) (59.2) (46.4) (54.8) (89.5) (249.9)
Income from Discontinued Operations, Net of Tax (143.4) (24.9) (2.6) (0.1) 24.0 0.1 (5.5) 18.5 0.4 (3.2) (3.2) 0.5 (5.5)
Adjusted Net Income 196.8 241.5 387.6 261.5 291.1 291.3 333.5 1,177.4 321.8 347.0 331.6 374.9 1,375.3
GAAP Diluted EPS 2.17 1.36 0.84 0.31 0.37 0.49 0.54 1.72 0.53 0.57 0.51 0.68 2.29
Cost of Revenues Charges, Net of Tax (a) 0.02 0.05 0.23 0.06 0.01 0.00 0.00 0.07 0.00 0.00 0.00 0.00 0.00
Restructuring and Other Costs (Income), Net of Tax (b) 0.07 0.07 0.18 0.01 0.01 0.01 0.02 0.06 0.01 0.00 0.03 0.03 0.06
Pro Forma Stock Option Compensation Expense (c) (0.07) (0.08) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Equity Compensation Acceleration Charges, Net of Tax (d) 0.00 0.00 0.12 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Amortization of Acquisition-related Intangible Assets, Net of Tax 0.10 0.30 0.54 0.21 0.21 0.20 0.21 0.82 0.23 0.23 0.23 0.20 0.89
Gain/Loss on Extinguishment of Debt Facilities 0.00 0.00 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Other Income, Net (e) (0.04) (0.11) 0.00 0.00 0.00 0.00 0.02 0.01 (0.01) 0.00 0.00 0.01 (0.01)
Income Tax (Provision) Benefit (f) (0.21) 0.03 0.00 0.00 0.00 (0.05) (0.02) (0.07) (0.02) 0.00 0.00 (0.04) (0.06)
Income from Discontinued Operations, Net of Tax (0.86) (0.15) (0.01) 0.00 0.05 0.00 (0.01) 0.04 0.00 (0.01) (0.01) 0.00 (0.01)
Adjusted Diluted EPS 1.18 1.47 1.91 0.59 0.65 0.65 0.76 2.65 0.74 0.79 0.76 0.88 3.16
GAAP Gross Margin 45.4% 41.4% 37.6% 39.3% 39.5% 39.7% 39.0% 39.9% 40.2% 39.9% 40.3% 40.1%
Cost of Revenues Charges (a) 0.5% 2.0% 1.6% 0.5% 0.0% 0.0% 0.5% 0.0% 0.0% 0.0% 0.0% 0.0%
Amortization of Acquisition-related Intangible Assets 0.0% 0.3% 1.3% 1.2% 1.3% 1.2% 1.3% 1.2% 1.1% 1.2% 1.2% 1.2%
Pro Forma Stock Option Compensation Expense (c) -0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Equity Compensation Acceleration Charges (d) 0.0% 0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Gross Margin 45.8% 43.9% 40.5% 41.0% 40.8% 40.9% 40.8% 41.1% 41.3% 41.1% 41.5% 41.3%
GAAP SG&A as a % of Revenue 28.9% 29.3% 26.5% 26.3% 26.1% 25.8% 26.2% 25.9% 25.8% 25.9% 25.1% 25.6%
Amortization of Acquisition-related Intangible Assets -2.9% -4.2% -4.6% -4.7% -4.6% -4.5% -4.7% -4.7% -4.5% -4.7% -4.5% -4.5%
Pro Forma Stock Option Compensation Expense (c) 0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Equity Compensation Acceleration Charges (d) 0.0% -0.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted SG&A as a % of Revenue 26.7% 24.3% 21.9% 21.6% 21.5% 21.3% 21.5% 21.2% 21.3% 21.2% 20.6% 21.1%
GAAP Tax Rate 30.6% 20.6% 16.2% 15.5% 7.1% 9.2% 11.5% 15.9% 19.9% 17.4% 3.2% 14.0%
Tax Effect of Adjusted Items -0.5% 7.8% 8.8% 8.7% 17.5% 13.3% 12.5% 8.4% 3.7% 5.9% 17.7% 9.0%
Adjusted Tax Rate 30.1% 28.4% 25.0% 24.2% 24.6% 22.5% 24.0% 24.3% 23.6% 23.3% 20.9% 23.0%
(a) The excluded items from cost of revenues include inventory charges, principally for the sale of inventories revalued at the date of acquisition and accelerated depreciation on assets to be abandoned as a result of real estate consolidation.
(b) Restructuring and other costs consist principally of severance and retention costs; abandoned facility and other expenses of real estate consolidation; gains and losses on the sale of businesses, product lines and property; writedowns of businesses
held for sale; legal/advisory fees associated with a reorganization of the company's non-U.S. subsidiary structure; in Q4 2006, charges for in-process R&D associated with the Fisher merger; in Q2 2008, gain on pension plan curtailment and loss
on a pre-acquisition litigation-related matter; and, in Q4 2008, impairment of intangible assets associated with a small business unit.
(c) For purposes of comparison, adjusted results for periods prior to 2006 reflect the pro forma effect of stock option expense as if it had been required in that period.
(d) Charges associated with the accelerated vesting of our equity-based arrangements resulting from the change in control occurring at the date of the Fisher merger have been excluded from adjusted results.
(e) The excluded items from other income, net represent net gains from the sale of the company's equity interests in Thoratec Corporation and Newport Corporation in periods prior to 2006; amortization of acquisition-related intangible assets of the
company's equity investments in periods after Q1 2007; in Q4 2007and Q4 2008, the loss from an other than temporary decline in fair market value of an available-for-sale investment; and, in Q4 2007 and Q1 2008, the currency transaction gain associated
with an intercompany financing transaction.
(f) The excluded items from income tax benefit include the tax benefits/provisions related to the above excluded items, benefit from tax credit carryforwards, the impact of the resolution of significant tax audits and the tax benefit from adjusting the
company's deferred tax balances as a result of newly enacted tax rates.
Page 3 of 5
4. Thermo Fisher Scientific
Pro Forma Data (b) As Reported Data
Segment Data (a)
(In millions) Growth Growth Growth Growth Growth Growth Growth Growth Growth Growth Growth Growth
2004 2005 2006 Q1-07 % (e) Q2-07 % (e) Q3-07 % (e) Q4-07 % (e) 2007 Q1-08 Q2-08 Q3-08 Q4-08 2008
% % % (e) % % % % %
Revenues
Analytical Technologies 3,307.0 3,675.2 11.1% 988.3 15.4% 1,020.4 13.6% 1,025.7 12.0% 1,147.3 14.1% 4,181.7 13.8% 1,087.4 10.0% 1,160.6 13.7% 1,086.5 5.9% 1,136.7 -0.9% 4,471.2 6.9%
Laboratory Products and Services 5,042.6 5,503.9 9.1% 1,433.5 8.9% 1,449.7 6.0% 1,462.5 4.4% 1,565.4 10.3% 5,911.1 7.4% 1,568.4 9.4% 1,656.4 14.3% 1,609.8 10.1% 1,618.7 3.4% 6,453.3 9.2%
Eliminations (274.7) (308.7) (83.6) (84.2) (87.0) (91.6) (346.4) (101.8) (107.4) (108.2) (109.1) (426.5)
Combined Revenues 6,750.7 8,074.9 19.6% 8,870.4 9.9% 2,338.2 11.5% 2,385.9 9.0% 2,401.2 7.3% 2,621.1 11.6% 9,746.4 9.9% 2,554.0 9.2% 2,709.6 13.6% 2,588.1 7.8% 2,646.3 1.0% 10,498.0 7.7%
Pre-merger Fisher Scientific Results, Net of Eliminations (4,544.7) (5,441.9) (5,078.8) - - - - - - - - - -
GAAP Consolidated Revenues 2,206.0 2,633.0 3,791.6 2,338.2 2,385.9 2,401.2 2,621.1 9,746.4 2,554.0 2,709.6 2,588.1 2,646.3 10,498.0
Revenue Growth
Analytical Technologies
Organic 4% 8% 2% 3% 4%
Acquisitions net of Divestitures 1% 1% 2% 0% 1%
Currency Translation 5% 5% 2% -4% 2%
Total Revenue Growth - ATS 10% 14% 6% -1% 7%
Laboratory Products and Services
4½%
Organic 8% 5% 5% 6%
1½%
Acquisitions net of Divestitures 3% 4% 2% 2%
Currency Translation 3% 3% 1% -4% 1%
Total Revenue Growth - LPS 9% 14% 10% 3% 9%
Margin Margin Margin Margin Margin Margin Margin Margin Margin Margin Margin Margin Margin
2004 2005 2006 Q1-07 Q2-07 Q3-07 Q4-07 2007 Q1-08 Q2-08 Q3-08 Q4-08 2008
% % % % % % % % % % % % %
Operating Income and Operating Margin
Analytical Technologies 529.8 16.0% 629.1 17.1% 185.4 18.8% 201.9 19.8% 198.6 19.4% 239.5 20.9% 825.4 19.7% 228.7 21.0% 245.1 21.1% 229.2 21.1% 254.1 22.4% 957.1 21.4%
Laboratory Products and Services 549.4 10.9% 678.4 12.3% 190.1 13.3% 202.7 14.0% 206.1 14.1% 212.6 13.6% 811.5 13.7% 218.4 13.9% 231.5 14.0% 224.5 13.9% 237.6 14.7% 912.0 14.1%
Other/Eliminations (0.4) (1.1) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (0.0) (0.0) 0.0
Adjusted Combined Operating Income 717.2 10.6% 1,078.8 13.4% 1,306.4 14.7% 375.5 16.1% 404.6 17.0% 404.7 16.9% 452.1 17.2% 1,636.9 16.8% 447.1 17.5% 476.6 17.6% 453.7 17.5% 491.7 18.6% 1,869.1 17.8%
Pre-merger Fisher Scientific Results Included Above (455.5) (728.3) (733.5) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Adjusted Operating Income 261.7 11.9% 350.5 13.3% 572.9 15.1% 375.5 16.1% 404.6 17.0% 404.7 16.9% 452.1 17.2% 1,636.9 16.8% 447.1 17.5% 476.6 17.6% 453.7 17.5% 491.7 18.6% 1,869.1 17.8%
Cost of Revenues Charges (3.3) -0.2% (13.4) -0.5% (77.7) -2.0% (36.4) -1.6% (11.2) -0.5% (0.4) 0.0% (1.2) 0.0% (49.2) -0.5% (0.6) 0.0% (0.2) 0.0% 0.0 0.0% (0.7) 0.0% (1.5) 0.0%
Restructuring and Other Costs, Net (15.8) -0.7% (16.9) -0.6% (45.7) -1.2% (7.4) -0.3% (8.3) -0.3% (8.8) -0.4% (17.7) -0.7% (42.2) -0.4% (4.9) -0.2% 5.4 0.2% (15.4) -0.6% (20.5) -0.8% (35.4) -0.3%
Pro Forma Stock Option Compensation Expense (c) 17.8 0.8% 20.9 0.8% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%
Equity Compensation Acceleration Charge (d) 0.0 0.0% 0.0 0.0% (36.7) -1.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0% 0.0 0.0%
Amortization of Acquisition-related Intangible Assets (22.9) -1.0% (77.6) -3.0% (170.8) -4.5% (139.3) -6.0% (142.1) -6.0% (141.5) -5.9% (148.2) -5.6% (571.1) -5.9% (151.2) -5.9% (151.6) -5.6% (152.0) -5.8% (148.0) -5.6% (602.8) -5.8%
GAAP Operating Income 237.5 10.8% 263.5 10.0% 242.0 6.4% 192.4 8.2% 243.0 10.2% 254.0 10.6% 285.0 10.9% 974.4 10.0% 290.4 11.4% 330.2 12.2% 286.3 11.1% 322.5 12.2% 1,229.4 11.7%
Adjusted Gross Margin 38.7% 39.6% 40.5% 41.0% 40.8% 40.9% 40.8% 41.1% 41.3% 41.1% 41.5% 41.3%
Impact of Including Pre-merger Fisher Results 7.1% 4.3% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted Gross Margin 45.8% 43.9% 40.5% 41.0% 40.8% 40.9% 40.8% 41.1% 41.3% 41.1% 41.5% 41.3%
Cost of Revenues Charges -0.5% -2.0% -1.6% -0.5% 0.0% 0.0% -0.5% 0.0% 0.0% 0.0% 0.0% 0.0%
Amortization of Acquisition-related Intangible Assets 0.0% -0.3% -1.3% -1.2% -1.3% -1.2% -1.3% -1.2% -1.1% -1.2% -1.2% -1.2%
Pro Forma Stock Option Compensation Expense (c) 0.1% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Equity Compensation Acceleration Charges (d) 0.0% -0.2% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
GAAP Gross Margin 45.4% 41.4% 37.6% 39.3% 39.5% 39.7% 39.0% 39.9% 40.2% 39.9% 40.3% 40.1%
Adjusted SG&A as a % of Revenue 22.8% 22.4% 21.9% 21.6% 21.5% 21.3% 21.5% 21.2% 21.3% 21.2% 20.6% 21.1%
Impact of Including Pre-merger Fisher Results 3.9% 1.9% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Adjusted SG&A as a % of Revenue 26.7% 24.3% 21.9% 21.6% 21.5% 21.3% 21.5% 21.2% 21.3% 21.2% 20.6% 21.1%
Amortization of Acquisition-related Intangible Assets 2.9% 4.2% 4.6% 4.7% 4.6% 4.5% 4.7% 4.7% 4.5% 4.7% 4.5% 4.5%
Pro Forma Stock Option Compensation Expense (c) -0.7% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Equity Compensation Acceleration Charges (d) 0.0% 0.8% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
GAAP SG&A as a % of Revenue 28.9% 29.3% 26.5% 26.3% 26.1% 25.8% 26.2% 25.9% 25.8% 25.9% 25.1% 25.6%
Adjusted R&D as a % of Revenue 2.6% 2.5% 2.6% 2.5% 2.4% 2.3% 2.4% 2.4% 2.4% 2.4% 2.3% 2.4%
Impact of Including Pre-merger Fisher Results 3.2% 2.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Reported R&D as a % of Revenue 5.8% 4.5% 2.6% 2.5% 2.4% 2.3% 2.4% 2.4% 2.4% 2.4% 2.3% 2.4%
Equity Compensation 77.8 74.7 13.8 12.3 13.2 11.8 51.1 11.0 16.7 15.8 13.6 57.1
Depreciation 177.7 46.0 45.0 46.1 48.6 185.7 47.6 48.2 47.7 46.4 189.9
(a) During the first quarter of 2008, the company transferred management responsibility for several small business units between segments. All prior period segment information has been reclassified to reflect these transfers.
(b) Pro forma results combine the results of the company with the pre-merger results of Fisher Scientific International Inc.
(c) For purposes of comparison, adjusted operating income for periods prior to 2006 reflects the pro forma effect of stock option expense as if it had been required in that period.
(d) Charges associated with the accelerated vesting of our equity-based arrangements resulting from the change in control occurring at the date of the Fisher merger have been excluded from adjusted operating income.
(e) Revenue growth for the 2007 periods are calculated on a pro forma basis.
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5. Thermo Fisher Scientific
Balance Sheet
(In millions)
12/31/2004 12/31/2005 12/31/2006 3/31/2007 6/30/2007 9/29/2007 12/31/2007 3/29/2008 6/28/2008 9/27/2008 12/31/2008
Assets
Current Assets:
Cash and cash equivalents 326.9 214.3 667.4 670.9 951.2 830.8 625.1 734.0 1,006.9 1,240.3 1,280.5
Short-term investments 185.4 80.7 23.8 20.5 22.7 15.4 14.1 14.1 13.5 9.2 7.5
Accounts receivable, net 465.2 560.2 1,392.7 1,419.0 1,422.5 1,458.1 1,450.0 1,585.7 1,599.1 1,543.4 1,478.1
Inventories 336.7 359.4 1,164.5 1,180.5 1,183.2 1,206.2 1,169.9 1,246.7 1,264.1 1,260.4 1,171.4
Other current assets 155.5 139.3 411.1 455.3 427.5 397.9 406.2 408.3 415.9 389.7 408.4
Total Current Assets 1,469.7 1,353.9 3,659.5 3,746.2 4,007.1 3,908.4 3,665.3 3,988.8 4,299.5 4,443.0 4,345.9
Property, Plant and Equipment, Net 261.0 280.7 1,256.7 1,256.2 1,228.5 1,238.6 1,267.4 1,297.5 1,304.5 1,267.7 1,275.3
Acquisition-related Intangible Assets 158.6 450.7 7,511.6 7,333.2 7,208.0 7,096.9 7,157.8 7,090.6 6,950.2 6,720.8 6,423.2
Other Assets 174.4 200.1 309.4 258.3 276.9 379.3 403.7 402.6 408.5 422.9 367.9
Goodwill 1,513.0 1,966.2 8,525.0 8,578.0 8,551.6 8,549.2 8,713.2 8,718.4 8,718.3 8,745.1 8,677.7
3,576.7 4,251.6 21,262.2 21,171.9 21,272.1 21,172.4 21,207.4 21,497.9 21,681.0 21,599.5 21,090.0
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current maturities of long-term obligations 15.0 130.1 483.3 167.4 24.8 19.6 149.3 150.8 145.3 138.8 14.8
Other current liabilities 563.7 661.6 1,669.0 1,629.1 1,578.2 1,611.3 1,752.3 1,758.4 1,734.8 1,701.2 1,525.4
Total Current Liabilities 578.7 791.7 2,152.3 1,796.5 1,603.0 1,630.9 1,901.6 1,909.2 1,880.1 1,840.0 1,540.2
Other Long-term Liabilities 106.4 198.0 3,017.4 2,960.3 2,959.6 2,917.5 2,771.6 2,757.0 2,686.4 2,580.9 2,579.7
Long-term Obligations 226.0 468.6 2,180.7 2,182.4 2,177.7 2,181.1 2,045.9 2,045.9 2,044.5 2,043.0 2,043.5
Total Shareholders' Equity 2,665.6 2,793.3 13,911.8 14,232.7 14,531.8 14,442.9 14,488.3 14,785.8 15,070.0 15,135.6 14,926.6
3,576.7 4,251.6 21,262.2 21,171.9 21,272.1 21,172.4 21,207.4 21,497.9 21,681.0 21,599.5 21,090.0
Accounts Receivable (Days) 52 53 55 54 55 50 56 53 54 50
Inventory (Days) 67 74 76 76 76 68 75 72 74 68
Notes: For purposes of comparison, Accounts Receivable days and Inventory days for periods prior to 1/1/07 have been calculated on a pro forma basis and combine the results of the company with the pre-merger results of Fisher Scientific International Inc.
Periods after 11/9/06 include a 4 day increase that resulted from the Fisher merger purchase accounting inventory step-up.
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