Company Raises Financial Guidance for the Full Year
WALTHAM, Mass., July 26 /PRNewswire-FirstCall/ -- Thermo Fisher Scientific
Inc. (NYSE: TMO), the world leader in serving science, reported that revenues
increased to $2.39 billion in the second quarter of 2007 (largely as a result
of the November 2006 merger with Fisher Scientific), compared with $713
million in the 2006 quarter. GAAP diluted earnings per share (EPS) were $.37
in 2007, versus $.29 in the year-ago period. GAAP operating income for the
2007 quarter was $243 million, compared with $72 million in 2006, and GAAP
operating margin was 10.2%, compared with 10.1% a year ago.
Adjusted EPS grew 55% to $.65 in the second quarter of 2007, versus $.42
in the 2006 quarter. For a better year-to-year comparison of the company's
operating performance, we are presenting our revenues and adjusted operating
results on a pro forma basis, as if Thermo and Fisher had been combined for
all of 2006. Second quarter revenues grew 9% over pro forma 2006 revenues of
$2.19 billion. Acquisitions (including those by Fisher prior to the merger)
contributed 1% of the growth, and currency translation increased revenues by
2%. Adjusted operating income for the quarter increased 25% over pro forma
2006 results, and adjusted operating margin expanded 220 basis points to
17.0%, compared with pro forma adjusted operating margin of 14.8% in the 2006
period. Adjusted EPS, adjusted operating income and adjusted operating margin
are non-GAAP measures that exclude certain items detailed later in this press
release under the heading "Use of Non-GAAP Financial Measures."
Second Quarter Highlights
- Revenues grew 9% over pro forma 2006
- Adjusted EPS rose 55%
- Adjusted operating income increased 25% over pro forma 2006
- Adjusted operating margin expanded 220 basis points over pro forma 2006
- New integrated solutions launched at ASMS (American Society for Mass
Spectrometry) Conference expand mass spectrometry portfolio
- Opened new RNAi services laboratory to support drug discovery and
development
- Sales of mercury monitoring systems to U.S. utilities continued at
record pace
- Introduced new series of portable elemental analyzers after quarter-end
"We are pleased to report another record quarter," said Marijn E. Dekkers,
president and chief executive officer of Thermo Fisher Scientific. "We
achieved excellent adjusted EPS and operating income results on good top-line
growth, and continued our trend of significant operating margin expansion.
We've now delivered three strong quarters as Thermo Fisher Scientific, clearly
demonstrating that we are successfully operating as one company. High demand
for our new products, healthy end markets and our continued operating
discipline are all coming together to fuel this excellent performance.
"Our customers are recognizing the true extent of our combined
capabilities, and we are intent on leveraging our breadth of technologies and
services to meet their needs. We continue to develop the integrated workflows
our life sciences customers rely on to accelerate their research, from new
mass spectrometry solutions introduced at ASMS to our new services for RNAi-
based screening. Outside the laboratory, our technologies are helping
customers comply with increasing environmental and consumer safety
regulations, leading to record sales of our portable elemental analysis
instruments and air-quality monitors."
Mr. Dekkers added, "Based on our strong earnings in the first half, we are
again raising our adjusted EPS guidance for the full year, and now expect
earnings to be in the range of $2.50 to $2.56 for 2007, versus the $2.43 to
$2.53 that we announced last quarter. This would lead to adjusted EPS growth
of 31 to 34% over 2006. We are also increasing our revenue guidance to a range
of $9.50 to $9.55 billion for 2007, from the $9.4 to $9.5 billion we
previously announced. This would represent an increase of approximately 7 to
8% over our pro forma 2006 results." (This guidance includes the favorable
impact of a full year of results from 2006 acquisitions and also takes into
account the unfavorable effects of 2006/2007 divestitures. The 2007 guidance
does not factor in any future acquisitions or divestitures, and is based on
present currency exchange rates. In addition, the adjusted EPS estimate
excludes amortization expense for acquisition-related intangible assets and
certain other items detailed later in this press release under the heading
"Use of Non-GAAP Financial Measures.")
Management uses adjusted operating results to monitor and evaluate
performance of the company's business segments. Results in the following
segment information are reported on a pro forma adjusted basis for 2006, as if
Thermo and Fisher had been combined for the entire year.
Analytical Technologies Segment
Revenues in the Analytical Technologies Segment grew 13% in the second
quarter of 2007 to $1.04 billion, compared with pro forma 2006 revenues of
$915 million. Operating income increased 32% in the second quarter of 2007,
and operating margin rose to 19.8%, versus pro forma 2006 results of 17.0%.
Laboratory Products and Services Segment
In the Laboratory Products and Services Segment, revenues grew 6% in the
second quarter of 2007 to $1.43 billion, compared with pro forma 2006 revenues
of $1.35 billion. Operating income increased 18% in the second quarter of
2007, and operating margin rose to 13.9%, versus pro forma 2006 results of
12.5%.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), we use certain non-GAAP
financial measures, including adjusted EPS, adjusted operating income and
adjusted operating margin, which exclude restructuring and other costs/income
and amortization of acquisition-related intangible assets. Adjusted EPS also
excludes certain other gains and losses, tax provisions/benefits related to
the previous items, benefits from tax credit carryforwards, the impact of
significant tax audits or events and discontinued operations. We exclude the
above items because they are outside of our normal operations and/or, in
certain cases, are difficult to forecast accurately for future periods. We
believe that the use of non-GAAP measures helps investors to gain a better
understanding of our core operating results and future prospects, consistent
with how management measures and forecasts the company's performance,
especially when comparing such results to previous periods or forecasts.
For example:
We exclude costs and tax effects associated with restructuring activities,
such as reducing overhead and consolidating facilities in connection with the
Fisher merger and our Kendro acquisition. We believe that the costs related to
these restructuring activities are not indicative of our normal operating
costs.
We exclude certain acquisition-related costs, including charges for the
sale of inventories revalued at the date of acquisition and professional fees
related to the merger with Fisher. We exclude these costs because we do not
believe they are indicative of our normal operating costs.
We exclude the expense and tax effects associated with the amortization of
acquisition-related intangible assets because a significant portion of the
purchase price for acquisitions may be allocated to intangible assets that
have lives of 5 to 20 years. Our adjusted EPS estimate for 2007 excludes
approximately $.84 of expense for the amortization of acquisition-related
intangible assets for acquisitions completed through the second quarter of
2007. Exclusion of the amortization expense allows comparisons of operating
results that are consistent over time for both our newly acquired and long-
held businesses and with both acquisitive and non-acquisitive peer companies.
We also exclude certain gains/losses and related tax effects, benefits
from tax credit carryforwards and the impact of significant tax audits or
events, which are either isolated or cannot be expected to occur again with
any regularity or predictability and that we believe are not indicative of our
normal operating gains and losses. We exclude gains/losses from items such as
the sale of a business or real estate, the early retirement of debt and debt
facilities and discontinued operations.
Thermo Fisher's management uses these non-GAAP measures, in addition to
GAAP financial measures, as the basis for measuring the company's core
operating performance and comparing such performance to that of prior periods
and to the performance of our competitors. Such measures are also used by
management in their financial and operating decision-making and for
compensation purposes.
The non-GAAP financial measures of Thermo Fisher's results of operations
included in this press release are not meant to be considered superior to or a
substitute for Thermo Fisher's results of operations prepared in accordance
with GAAP. Reconciliations of such non-GAAP financial measures to the most
directly comparable GAAP financial measures are set forth in the accompanying
tables. Thermo Fisher's earnings guidance, however, is only provided on an
adjusted basis. It is not feasible to provide GAAP EPS guidance because the
items excluded, other than the amortization expense, are difficult to predict
and estimate and are primarily dependent on future events, such as
acquisitions and decisions concerning the location and timing of facility
consolidations.
Conference Call
Thermo Fisher Scientific will hold its earnings conference call today,
July 26, at 9:00 a.m. Eastern time. To listen, dial 866-802-4321 within the
U.S. or 703-639-1318 outside the U.S., and use conference ID 1026517. You may
also listen to the call live on our Website, www.thermofisher.com, by clicking
on "Investors." You will find this press release, including the accompanying
reconciliation of non-GAAP financial measures and related information, in that
section of our Website under "Quarterly Results." An audio archive of the call
will be available under "Webcasts and Presentations" through Friday, August
31, 2007.
About Thermo Fisher Scientific
Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving
science, enabling our customers to make the world healthier, cleaner and
safer. With an annual revenue rate of more than $9 billion, we employ 30,000
people and serve over 350,000 customers within pharmaceutical and biotech
companies, hospitals and clinical diagnostic labs, universities, research
institutions and government agencies, as well as environmental and industrial
process control settings. Serving customers through two premier brands, Thermo
Scientific and Fisher Scientific, we help solve analytical challenges from
routine testing to complex research and discovery. Thermo Scientific offers
customers a complete range of high-end analytical instruments as well as
laboratory equipment, software, services, consumables and reagents to enable
integrated laboratory workflow solutions. Fisher Scientific provides a
complete portfolio of laboratory equipment, chemicals, supplies and services
used in healthcare, scientific research, safety and education. Together, we
offer the most convenient purchasing options to customers and continuously
advance our technologies to accelerate the pace of scientific discovery,
enhance value for customers and fuel growth for shareholders and employees
alike. Visit www.thermofisher.com.
The following constitutes a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995: This press release contains forward-
looking statements that involve a number of risks and uncertainties. Important
factors that could cause actual results to differ materially from those
indicated by such forward-looking statements are set forth in the Company's
Quarterly Report on Form 10-Q for the quarter ended March 31, 2007, under the
caption "Risk Factors," which is on file with the Securities and Exchange
Commission and available in the "Investors" section of our Website under the
heading "SEC Filings." We also may make forward-looking statements about the
benefits of the merger of Thermo Electron and Fisher Scientific, including
statements about future financial and operating results, the new company's
plans, objectives, expectations and intentions and other statements that are
not historical facts. Important factors that could cause actual results to
differ materially from those indicated by forward-looking statements include
risks and uncertainties relating to: the risk that the businesses will
not be integrated successfully; the risk that the cost savings and any other
synergies from the transaction may not be fully realized or may take longer to
realize than expected; disruption from the transaction making it more
difficult to maintain relationships with customers, employees or suppliers;
competition and its effect on pricing, spending, third-party relationships and
revenues; the need to develop new products and adapt to significant
technological change; implementation of strategies for improving internal
growth; use and protection of intellectual property; dependence on customers'
capital spending policies and government funding policies; realization of
potential future savings from new productivity initiatives; general worldwide
economic conditions and related uncertainties; the effect of changes in
governmental regulations; the effect of exchange rate fluctuations on
international operations; the effect of laws and regulations governing
government contracts; the effect of competing with certain of our customers
and suppliers; and the effect of rapid changes in the healthcare industry.
While we may elect to update forward-looking statements at some point in the
future, we specifically disclaim any obligation to do so, even if our
estimates change and, therefore, you should not rely on these forward-looking
statements as representing our views as of any date subsequent to today.
Media Contact Information:
Lori Gorski
Phone: 781-622-1242
E-mail: lori.gorski@thermofisher.com
Investor Contact Information:
Ken Apicerno
Phone: 781-622-1111
E-mail: ken.apicerno@thermofisher.com
Consolidated Statement of Income (unaudited) (a)
Three Months Ended
June 30, % of July 1, % of
(In millions except per share amounts) 2007 Revenues 2006 Revenues
Revenues $2,385.9 $713.5
Costs and Operating Expenses (f)(g):
Cost of revenues 1,419.1 59.5% 388.9 54.5%
Selling, general and administrative
expenses 514.7 21.6% 181.3 25.4%
Amortization of acquisition-related
intangible assets 142.1 6.0% 25.6 3.6%
Research and development expenses 58.7 2.5% 40.7 5.7%
Restructuring and other costs, net (d) 8.3 0.3% 4.8 0.7%
2,142.9 89.8% 641.3 89.9%
Operating Income 243.0 10.2% 72.2 10.1%
Interest Income 10.6 3.4
Interest Expense (33.2) (8.0)
Other Income, Net 1.9 1.2
Income from Continuing Operations
Before Income Taxes 222.3 68.8
Provision for Income Taxes (34.4) (19.8)
Income from Continuing Operations 187.9 49.0
Loss on Disposal of Discontinued
Operations (net of income tax
provision of $1.8 in 2007; includes
income tax benefit of $0.6 in 2006) (24.0) (1.1)
Net Income $163.9 6.9% $47.9 6.7%
Earnings per Share from Continuing
Operations:
Basic $.44 $.30
Diluted $.42 $.30
Earnings per Share:
Basic $.39 $.30
Diluted $.37 $.29
Weighted Average Shares:
Basic 424.0 161.3
Diluted 446.5 165.5
Reconciliation of Adjusted Operating
Income and Adjusted Operating Margin
GAAP Operating Income (a) $243.0 10.2% $72.2 10.1%
Cost of Revenues Charges (c) 11.2 0.5% 1.3 0.2%
Restructuring and Other Costs, Net (d) 8.3 0.3% 4.8 0.7%
Amortization of Acquisition-related
Intangible Assets 142.1 6.0% 25.6 3.6%
Adjusted Operating Income (b) $404.6 17.0% $103.9 14.6%
Reconciliation of Adjusted Net Income
GAAP Net Income (a) $163.9 6.9% $47.9 6.7%
Cost of Revenues Charges (c) 11.2 0.5% 1.3 0.2%
Restructuring and Other Costs, Net (d) 8.3 0.3% 4.8 0.7%
Amortization of Acquisition-related
Intangible Assets 142.1 6.0% 25.6 3.6%
Amortization of Acquisition-related
Intangible Assets - Equity
Investments 0.1 0.0% - 0.0%
Provision for Income Taxes (e) (58.5) -2.5% (10.9) -1.5%
Discontinued Operations, Net of Tax 24.0 1.0% 1.1 0.1%
Adjusted Net Income (b) $291.1 12.2% $69.8 9.8%
Reconciliation of Adjusted Earnings
per Share
GAAP EPS (a) $0.37 $0.29
Cost of Revenues Charges, Net of Tax (c) 0.01 -
Restructuring and Other Costs, Net
of Tax (d) 0.01 0.02
Amortization of Acquisition-related
Intangible Assets, Net of Tax 0.21 0.10
Amortization of Acquisition-related
Intangible Assets, Net of Tax -
Equity Investments - -
Discontinued Operations, Net of Tax 0.05 0.01
Adjusted EPS (b) $0.65 $0.42
Segment Data
Three Months Ended
(In millions except percentage June 30, % of July 1, % of
amounts) 2007 Revenues 2006 Revenues
Revenues
Analytical Technologies $1,038.5 43.5% $531.5 74.5%
Laboratory Products and Services 1,433.7 60.1% 182.0 25.5%
Eliminations (86.3) -3.6% - 0.0%
Consolidated Revenues $2,385.9 100.0% $713.5 100.0%
Operating Income and Operating
Margin
Analytical Technologies $205.7 19.8% $77.5 14.6%
Laboratory Products and Services 198.9 13.9% 26.4 14.5%
Subtotal Reportable Segments 404.6 17.0% 103.9 14.6%
Cost of Revenues Charges (c) (11.2) -0.5% (1.3) -0.2%
Restructuring and Other Costs, Net (d) (8.3) -0.3% (4.8) -0.7%
Amortization of Acquisition-related
Intangible Assets (142.1) -6.0% (25.6) -3.6%
GAAP Operating Income (a) $243.0 10.2% $72.2 10.1%
Pro Forma Data (unaudited) (h)
Three Months Ended
(In millions except percentage July 1, % of
amounts) 2006 Revenues
Pro Forma Revenues (h)
Analytical Technologies $915.4 41.8%
Laboratory Products and Services 1,350.8 61.7%
Eliminations (77.5) -3.5%
Pro Forma Combined Revenues 2,188.7 100.0%
Pre-merger Fisher Scientific
Results, Net of Eliminations (1,475.2)
GAAP Consolidated Revenues (a) $713.5
Pro Forma Operating Income and
Operating Margin (h)
Analytical Technologies $155.7 17.0%
Laboratory Products and Services 168.8 12.5%
Other/Eliminations (0.4)
Pro Forma Adjusted Combined
Operating Income (b) 324.1 14.8%
Pre-merger Fisher Scientific Results
Included Above (220.2)
Adjusted Operating Income (b) 103.9 14.6%
Cost of Revenues Charges (c) (1.3) -0.2%
Restructuring and Other Costs, Net (d) (4.8) -0.7%
Amortization of Acquisition-related
Intangible Assets (25.6) -3.6%
GAAP Operating Income (a) $72.2 10.1%
(a) "GAAP" (reported) results were determined in accordance with U.S.
generally accepted accounting principles (GAAP).
(b) Adjusted results are non-GAAP measures and exclude certain charges to
cost of revenues (see note (c) for details); amortization of
acquisition-related intangible assets; restructuring and other
costs, net (see note (d) for details); the tax consequences of the
preceding items (see note (e) for details); and results of
discontinued operations.
(c) Reported results in 2007 include $11.2 primarily for charges for the
sale of inventories revalued at the date of acquisition. Reported
results in 2006 include $1.3 of accelerated depreciation on
manufacturing assets abandoned due to facility consolidations.
(d) Reported results in 2007 and 2006 include restructuring and other
costs, net, consisting principally of severance, abandoned facility
and other expenses of real estate consolidation, net of net gains
in 2006 on the sale of product lines and abandoned facilities.
(e) Reported provision for income taxes includes $58.5 and $10.9 of
incremental tax benefit in 2007 and 2006, respectively, for the pre-
tax reconciling items between GAAP and adjusted net income.
(f) Consolidated depreciation expense in 2007 and 2006 is $45.0 and $13.4,
respectively.
(g) Consolidated equity compensation expense included in both reported and
adjusted results is $12.3 and $6.9 in 2007 and 2006, respectively. The
expense was included as follows: in 2007, cost of revenues $0.8,
selling, general and administrative expenses $10.9, and research and
development expenses $0.6; and in 2006, cost of revenues $0.7,
selling, general and administrative expenses $5.8, and research and
development expenses $0.4.
(h) Pro forma results combine the results of the company with the pre-
merger results of Fisher Scientific International Inc. Equity
compensation expense of $18.2 is included in the pro forma 2006
results as follows: cost of revenues $0.8, selling, general and
administrative expenses $16.9, and research and development expenses
$0.5.
Consolidated Statement of Income (unaudited) (a)
Six Months Ended
June 30, % of July 1, % of
(In millions except per share amounts) 2007 Revenues 2006 Revenues
Revenues $4,724.1 $1,397.8
Costs and Operating Expenses (f)(g):
Cost of revenues 2,847.2 60.3% 760.6 54.4%
Selling, general and
administrative expenses 1,025.9 21.7% 358.2 25.6%
Amortization of acquisition-
related intangible assets 281.4 6.0% 51.2 3.7%
Research and development expenses 118.5 2.5% 79.4 5.7%
Restructuring and other costs,
net (d) 15.7 0.3% 8.4 0.6%
4,288.7 90.8% 1,257.8 90.0%
Operating Income 435.4 9.2% 140.0 10.0%
Interest Income 19.5 6.9
Interest Expense (70.4) (15.7)
Other Income, Net 3.5 1.7
Income from Continuing Operations
Before Income Taxes 388.0 132.9
Provision for Income Taxes (61.3) (40.3)
Income from Continuing Operations 326.7 92.6
Income from Discontinued Operations
(net of income tax provision of $0.1) 0.1 -
(Loss) Gain on Disposal of
Discontinued Operations (includes
income tax provision of $1.8 and $1.3) (24.0) 2.2
Net Income $302.8 6.4% $94.8 6.8%
Earnings per Share from Continuing
Operations:
Basic $.77 $.57
Diluted $.74 $.56
Earnings per Share:
Basic $.72 $.58
Diluted $.68 $.57
Weighted Average Shares:
Basic 422.0 162.2
Diluted 443.8 166.3
Reconciliation of Adjusted Operating
Income and Adjusted Operating Margin
GAAP Operating Income (a) $435.4 9.2% $140.0 10.0%
Cost of Revenues Charges (c) 47.6 1.0% 1.3 0.1%
Restructuring and Other Costs,
Net (d) 15.7 0.3% 8.4 0.6%
Amortization of Acquisition-related
Intangible Assets 281.4 6.0% 51.2 3.7%
Adjusted Operating Income (b) $780.1 16.5% $200.9 14.4%
Reconciliation of Adjusted Net Income
GAAP Net Income (a) $302.8 6.4% $94.8 6.8%
Cost of Revenues Charges (c) 47.6 1.0% 1.3 0.1%
Restructuring and Other Costs,
Net (d) 15.7 0.3% 8.4 0.6%
Amortization of Acquisition-related
Intangible Assets 281.4 6.0% 51.2 3.7%
Amortization of Acquisition-related
Intangible Assets - Equity
Investments 0.1 0.0% - 0.0%
Provision for Income Taxes (e) (118.9) -2.5% (18.9) -1.4%
Discontinued Operations, Net of Tax 23.9 0.5% (2.2) -0.2%
Adjusted Net Income (b) $552.6 11.7% $134.6 9.6%
Reconciliation of Adjusted Earnings
per Share
GAAP EPS (a) $0.68 $0.57
Cost of Revenues Charges, Net of
Tax (c) 0.07 -
Restructuring and Other Costs, Net
of Tax (d) 0.03 0.05
Amortization of Acquisition-related
Intangible Assets, Net of Tax 0.42 0.20
Amortization of Acquisition-related
Intangible Assets, Net of Tax -
Equity Investments - -
Discontinued Operations, Net of Tax 0.05 (0.01)
Adjusted EPS (b) $1.25 $0.81
Segment Data
Six Months Ended
June 30, % of July 1, % of
(In millions except percentage amounts) 2007 Revenues 2006 Revenues
Revenues
Analytical Technologies $2,044.7 43.3% $1,036.1 74.1%
Laboratory Products and Services 2,850.2 60.3% 361.7 25.9%
Eliminations (170.8) -3.6% - 0.0%
Consolidated Revenues $4,724.1 100.0% $1,397.8 100.0%
Operating Income and Operating Margin
Analytical Technologies $395.5 19.3% $149.0 14.4%
Laboratory Products and Services 384.6 13.5% 51.9 14.3%
Subtotal Reportable Segments 780.1 16.5% 200.9 14.4%
Cost of Revenues Charges (c) (47.6) -1.0% (1.3) -0.1%
Restructuring and Other Costs,
Net (d) (15.7) -0.3% (8.4) -0.6%
Amortization of Acquisition-related
Intangible Assets (281.4) -6.0% (51.2) -3.7%
GAAP Operating Income (a) $435.4 9.2% $140.0 10.0%
Pro Forma Data (unaudited) (h) Six Months Ended
July 1, % of
(In millions except percentage amounts) 2006 Revenues
Pro Forma Revenues (h)
Analytical Technologies $1,787.6 41.7%
Laboratory Products and Services 2,650.7 61.9%
Eliminations (153.2) -3.6%
Pro Forma Combined Revenues 4,285.1 100.0%
Pre-merger Fisher Scientific
Results, Net of Eliminations (2,887.3)
GAAP Consolidated Revenues (a) $1,397.8
Pro Forma Operating Income and
Operating Margin (h)
Analytical Technologies $300.7 16.8%
Laboratory Products and Services 304.7 11.5%
Other/Eliminations (0.9)
Pro Forma Adjusted Combined
Operating Income (b) 604.5 14.1%
Pre-merger Fisher Scientific Results
Included Above (403.6)
Adjusted Operating Income (b) 200.9 14.4%
Cost of Revenues Charges (c) (1.3) -0.1%
Restructuring and Other Costs, Net (d) (8.4) -0.6%
Amortization of Acquisition-related
Intangible Assets (51.2) -3.7%
GAAP Operating Income (a) $140.0 10.0%
(a) "GAAP" (reported) results were determined in accordance with U.S.
generally accepted accounting principles (GAAP).
(b) Adjusted results are non-GAAP measures and exclude certain charges to
cost of revenues (see note (c) for details); amortization of
acquisition-related intangible assets; restructuring and other costs,
net (see note (d) for details); the tax consequences of the preceding
items (see note (e) for details); and results of discontinued
operations.
(c) Reported results in 2007 include $47.6 primarily for charges for the
sale of inventories revalued at the date of acquisition. Reported
results in 2006 include $1.3 of accelerated depreciation on
manufacturing assets abandoned due to facility consolidations.
(d) Reported results in 2007 and 2006 include restructuring and other
costs, net, consisting principally of severance, abandoned facility
and other expenses of real estate consolidation, net of net gains
in 2006 on the sale of product lines and abandoned facilities.
(e) Reported provision for income taxes includes $118.9 and $18.9 of
incremental tax benefit in 2007 and 2006, respectively, for the pre-
tax reconciling items between GAAP and adjusted net income.
(f) Consolidated depreciation expense in 2007 and 2006 is $91.0 and $25.2,
respectively.
(g) Consolidated equity compensation expense included in both reported and
adjusted results is $26.1 and $13.0 in 2007 and 2006, respectively.
The expense was included as follows: in 2007, cost of revenues $2.1,
selling, general and administrative expenses $22.9, and research and
development expenses $1.1; and in 2006, cost of revenues $1.3,
selling, general and administrative expenses $11.0, and research and
development expenses $0.7.
(h) Pro forma results combine the results of the company with the pre-
merger results of Fisher Scientific International Inc. Equity
compensation expense of $37.7 is included in the pro forma 2006
results as follows: cost of revenues $1.4, selling, general and
administrative expenses $35.3, and research and development expenses
$1.0.
Condensed Consolidated Balance Sheet (unaudited)
(In millions) Jun. 30, 2007 Dec. 31, 2006
Assets
Current Assets:
Cash and cash equivalents $951.2 $667.4
Short-term investments 22.7 23.8
Accounts receivable, net 1,422.5 1,392.7
Inventories 1,183.2 1,164.5
Other current assets 427.5 411.1
Total current assets 4,007.1 3,659.5
Property, Plant and Equipment, Net 1,228.5 1,256.7
Acquisition-related Intangible Assets 7,208.0 7,511.6
Other Assets 276.9 309.4
Goodwill 8,551.6 8,525.0
Total Assets $21,272.1 $21,262.2
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current
maturities of long-term obligations $24.8 $483.3
Other current liabilities 1,578.2 1,669.0
Total current liabilities 1,603.0 2,152.3
Other Long-term Liabilities 2,959.6 3,017.4
Long-term Obligations 2,177.7 2,180.7
Total Shareholders' Equity 14,531.8 13,911.8
Total Liabilities and Shareholders'
Equity $21,272.1 $21,262.2
SOURCE Thermo Fisher Scientific Inc.
