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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 quarterly period ended July 1, 2023 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
3.200% Notes due 2026TMO 26BNew 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
3.650% Notes due 2034TMO 34New 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 registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (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 registrant 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 (or for such shorter period that the registrant was required to submit such files). Yes   No 
Indicate by check mark whether the registrant 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,” 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 registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 
As of July 1, 2023, the Registrant had 385,949,773 shares of Common Stock outstanding.



THERMO FISHER SCIENTIFIC INC.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JULY 1, 2023
TABLE OF CONTENTS
Page
PART I - FINANCIAL INFORMATION
PART II - OTHER INFORMATION
   

2


THERMO FISHER SCIENTIFIC INC.


PART I    FINANCIAL INFORMATION
Item 1.    Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 July 1,December 31,
(In millions except share and per share amounts)20232022
Assets
Current assets:
Cash and cash equivalents$3,133 $8,524 
Accounts receivable, less allowances of $180 and $189
8,019 8,115 
Inventories5,655 5,634 
Contract assets, net1,467 1,312 
Other current assets1,721 1,644 
Total current assets19,995 25,229 
Property, plant and equipment, net9,292 9,280 
Acquisition-related intangible assets, net17,437 17,442 
Other assets4,108 4,007 
Goodwill43,273 41,196 
Total assets$94,105 $97,154 
Liabilities, redeemable noncontrolling interest and equity
Current liabilities:
Short-term obligations and current maturities of long-term obligations$4,814 $5,579 
Accounts payable2,423 3,381 
Accrued payroll and employee benefits1,310 2,095 
Contract liabilities2,590 2,601 
Other accrued expenses2,975 3,354 
Total current liabilities14,112 17,010 
Deferred income taxes2,842 2,849 
Other long-term liabilities4,042 4,238 
Long-term obligations29,194 28,909 
Redeemable noncontrolling interest113 116 
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; 441,398,059 and 440,668,112 shares issued
441 441 
Capital in excess of par value17,030 16,743 
Retained earnings44,289 41,910 
Treasury stock at cost, 55,448,286 and 50,157,275 shares
(15,084)(12,017)
Accumulated other comprehensive income/(loss)(2,924)(3,099)
Total Thermo Fisher Scientific Inc. shareholders’ equity43,752 43,978 
Noncontrolling interests50 54 
Total equity43,802 44,032 
Total liabilities, redeemable noncontrolling interest and equity$94,105 $97,154 
The accompanying notes are an integral part of these condensed consolidated financial statements.
3


THERMO FISHER SCIENTIFIC INC.


CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three months endedSix months ended
July 1,July 2,July 1,July 2,
(In millions except per share amounts)2023202220232022
Revenues
Product revenues
$6,271 $7,003 $12,675 $15,020 
Service revenues
4,416 3,967 8,722 7,768 
Total revenues
10,687 10,970 21,397 22,788 
Costs and operating expenses:
Cost of product revenues
3,278 3,516 6,615 7,071 
Cost of service revenues
3,158 2,855 6,391 5,654 
Selling, general and administrative expenses
2,145 2,209 4,264 4,486 
Research and development expenses
345 365 691 729 
Restructuring and other costs
183 24 295 26 
Total costs and operating expenses
9,109 8,969 18,256 17,966 
Operating income1,578 2,001 3,141 4,822 
Interest income178 36 324 54 
Interest expense(326)(148)(626)(284)
Other income/(expense)
 28 (46)(135)
Income before income taxes
1,430 1,917 2,793 4,457 
Provision for income taxes
(52)(198)(98)(499)
Equity in earnings/(losses) of unconsolidated entities(16)(51)(41)(70)
Net income1,362 1,668 2,654 3,888 
Less: net income/(losses) attributable to noncontrolling interests and redeemable noncontrolling interest1 4 4 9 
Net income attributable to Thermo Fisher Scientific Inc.$1,361 $1,664 $2,650 $3,879 
Earnings per share attributable to Thermo Fisher Scientific Inc.
Basic$3.53 $4.25 $6.86 $9.90 
Diluted$3.51 $4.22 $6.83 $9.83 
Weighted average shares
Basic386 392 386 392 
Diluted388 394 388 394 

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

4


THERMO FISHER SCIENTIFIC INC.


 CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
 Three months endedSix months ended
 July 1,July 2,July 1,July 2,
(In millions)2023202220232022
Comprehensive income
Net income$1,362 $1,668 $2,654 $3,888 
Other comprehensive income/(loss):
Currency translation adjustment:
Currency translation adjustment (net of tax provision (benefit) of $0, $173, $(36) and $262)
125 (386)169 (416)
Unrealized gains and losses on hedging instruments:
Reclassification adjustment for losses included in net income (net of tax benefit of $0, $1, $1 and $1)
1  4 1 
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, $(2), $0 and $(3))
(1)6  9 
Amortization of net loss included in net periodic pension cost (net of tax benefit of $0, $1, $0 and $2)
(2)2 (2)4 
Total other comprehensive income/(loss)123 (378)171 (402)
Comprehensive income
1,485 1,290 2,825 3,486 
Less: comprehensive income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest
(6)7  2 
Comprehensive income attributable to Thermo Fisher Scientific Inc.
$1,491 $1,283 $2,825 $3,484 

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

5


THERMO FISHER SCIENTIFIC INC.


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six months ended
 July 1,July 2,
(In millions)20232022
Operating activities
Net income
$2,654 $3,888 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment
523 486 
Amortization of acquisition-related intangible assets
1,191 1,209 
Change in deferred income taxes
(328)(601)
Loss on early extinguishment of debt 26 
Stock-based compensation
150 155 
Other non-cash expenses, net
330 291 
Changes in assets and liabilities, excluding the effects of acquisitions(2,251)(1,724)
Net cash provided by operating activities
2,269 3,730 
Investing activities  
Acquisitions, net of cash acquired
(2,751)(40)
Purchase of property, plant and equipment
(742)(1,146)
Proceeds from sale of property, plant and equipment
10 14 
Other investing activities, net
(102)83 
Net cash used in investing activities
(3,585)(1,089)
Financing activities
Repayment of debt
(1,000)(375)
Proceeds from issuance of commercial paper
1,620 1,032 
Repayments of commercial paper
(1,441)(3,490)
Purchases of company common stock
(3,000)(2,000)
Dividends paid
(252)(220)
Other financing activities, net
24 3 
Net cash used in financing activities
(4,049)(5,050)
Exchange rate effect on cash(19)(177)
Decrease in cash, cash equivalents and restricted cash
(5,384)(2,586)
Cash, cash equivalents and restricted cash at beginning of period
8,537 4,491 
Cash, cash equivalents and restricted cash at end of period
$3,153 $1,905 

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


THERMO FISHER SCIENTIFIC INC.


CONDENSED CONSOLIDATED STATEMENT OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY
(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
Three months ended July 1, 2023
Balance at April 1, 2023$123 441 $441 $16,889 $43,064 55 $(15,083)$(3,054)$42,257 $53 $42,310 
Issuance of shares under employees' and directors' stock plans
— — — 67 —  (2)— 65 — 65 
Stock-based compensation
— — — 74 — — — — 74 — 74 
Dividends declared ($0.35 per share)
— — — — (136)— — — (136)— (136)
Net income/(loss)
4 — — — 1,361 — — — 1,361 (3)1,358 
Other comprehensive items
(7)— — — — — — 130 130 — 130 
Contributions from (distributions to) noncontrolling interests(7)— — — — — — — — — — 
Excise tax from stock repurchases— — — — — — 1 — 1 — 1 
Balance at July 1, 2023$113 441 $441 $17,030 $44,289 55 $(15,084)$(2,924)$43,752 $50 $43,802 
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 income/(loss)
4 — — — 1,664 — — — 1,664 — 1,664 
Other comprehensive items
4 — — — — — — (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 

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 1, 2023
Balance at December 31, 2022$116 441 $441 $16,743 $41,910 50 $(12,017)$(3,099)$43,978 $54 $44,032 
Issuance of shares under employees' and directors' stock plans
— — — 137 —  (38)— 99 — 99 
Stock-based compensation
— — — 150 — — — — 150 — 150 
Purchases of company common stock
— — — — — 5 (3,000)— (3,000)— (3,000)
Dividends declared ($0.70 per share)
— — — — (271)— — — (271)— (271)
Net income/(loss)
8 — — — 2,650 — — — 2,650 (4)2,646 
Other comprehensive income/(loss)
(4)— — — — — — 175 175 — 175 
Contributions from (distributions to) noncontrolling interests(7)— — — — — — — — — — 
Excise tax from stock repurchases— — — — — — (29)— (29)— (29)
Balance at July 1, 2023$113 441 $441 $17,030 $44,289 55 $(15,084)$(2,924)$43,752 $50 $43,802 
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 income/(loss)
9 — — — 3,879 — — — 3,879 — 3,879 
Other comprehensive income/(loss)
(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 

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 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.
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 July 1, 2023, the results of operations for the three- and six-month periods ended July 1, 2023 and July 2, 2022, and the cash flows for the six-month periods ended July 1, 2023 and July 2, 2022. Interim results are not necessarily indicative of results for a full year.
The condensed consolidated balance sheet presented as of December 31, 2022 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 2022 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 2022 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 six months ended July 1, 2023.
Inventories
The components of inventories are as follows:
(In millions)July 1, 2023December 31, 2022
Raw materials$2,368 $2,405 
Work in process760 660 
Finished goods2,527 2,569 
Inventories$5,655 $5,634 
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. Actual results could differ from those estimates.
Recent Accounting Pronouncements
In September 2022, the FASB issued new guidance to require entities to disclose information about supplier finance programs. Among other things, the new guidance requires expanded disclosure about key program terms, payment terms, and amounts outstanding for obligations under these programs for each period presented. The company adopted some aspects of this guidance in 2023 using a retrospective method and will adopt other aspects in 2024 using a prospective method. The adoption of this guidance did not have, and is not expected to have, a material impact on the company’s disclosures; however, the impact in future periods will be dependent on the extent of arrangements of this nature entered into by the company.
In November 2021, the FASB issued new guidance to require entities to disclose information about certain types of government assistance they receive, including cash grants and tax credits. Among other things, the new guidance requires expanded disclosure regarding the qualitative and quantitative characteristics of the 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 adopted this guidance in the fourth quarter of 2022 using a prospective method. The adoption of this guidance did not have a material impact on the company’s disclosures.
9


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(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 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 and services; and use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company 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.
2023
On January 3, 2023, the company acquired, within the Specialty Diagnostics segment, The Binding Site Group, a U.K.-based provider of specialty diagnostic assays and instruments to improve the diagnosis and management of blood cancers and immune system disorders. The acquisition expands the segment’s portfolio with the addition of pioneering innovation in diagnostics and monitoring for multiple myeloma. The goodwill recorded as a result of this business combination is not tax deductible.
The components of the purchase price and net assets acquired are as follows:
(In millions)The Binding Site
Purchase price
Cash paid
$2,412 
Debt settled
307 
Cash acquired
(20)
$2,699 
Net assets acquired
Definite-lived intangible assets:
Customer relationships
$868 
Product technology
172 
Tradenames
42 
Goodwill
1,755 
Net tangible assets
141 
Deferred tax assets (liabilities)
(279)
$2,699 
In addition, in 2023, the company acquired, within the Analytical Instruments segment, a U.S.-based developer of Raman-based spectroscopy solutions for in-line measurement.
The weighted-average amortization period for definite-lived intangible assets acquired in 2023 are 18 years for customer relationships, 14 years for product technology and 15 years for tradenames. The weighted average amortization period for all definite-lived intangible assets acquired in 2023 is 17 years.
Pending Acquisition
The company has entered into an agreement to acquire CorEvitas, LLC for approximately $0.91 billion in cash. CorEvitas provides regulatory-grade, real-world evidence for approved medical treatments and therapies. The transaction, which is expected to be completed by the end of 2023, is subject to customary closing conditions, including regulatory approvals. Upon completion, CorEvitas will become part of the Laboratory Products and Biopharma Services segment.
10


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 3.    Revenues and Contract-related Balances
Disaggregated Revenues
Revenues by type are as follows:
Three months ended Six months ended
(In millions)July 1, 2023July 2, 2022July 1, 2023July 2, 2022
Revenues
Consumables
$4,433 $4,993 $8,939 $11,103 
Instruments
1,838 2,010 3,736 3,917 
Services
4,416 3,967 8,722 7,768 
Consolidated revenues$10,687 $10,970 $21,397 $22,788 
Revenues by geographic region based on customer location are as follows:
Three months endedSix months ended
(In millions)July 1, 2023July 2, 2022July 1, 2023July 2, 2022
Revenues
North America
$5,714 $6,032 $11,492 $12,355 
Europe
2,654 2,551 5,255 5,601 
Asia-Pacific
1,902 2,042 3,888 4,106 
Other regions
417 345 762 726 
Consolidated revenues$10,687 $10,970 $21,397 $22,788 
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.
Remaining Performance Obligations
The aggregate amount of the transaction price allocated to the remaining performance obligations for all open customer contracts as of July 1, 2023 was $25.39 billion. The company will recognize revenues for these performance obligations as they are satisfied, approximately 56% 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 and noncurrent contract liabilities are included within other assets and other long-term liabilities in the accompanying balance sheet, respectively. Contract asset and liability balances are as follows:
(In millions)July 1, 2023December 31, 2022
Current contract assets, net$1,467 $1,312 
Noncurrent contract assets, net6 7 
Current contract liabilities2,590 2,601 
Noncurrent contract liabilities1,098 1,179 
In the three and six months ended July 1, 2023, the company recognized revenues of $0.68 billion and $1.98 billion, respectively, that were included in the contract liabilities balance at December 31, 2022. In the three and six months ended July 2, 2022, the company recognized revenues of $0.71 billion and $1.99 billion, respectively, that were included in the contract liabilities balance at December 31, 2021.
11


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 4.    Business Segment and Geographical Information
Business Segment Information
Three months endedSix months ended
July 1,July 2,July 1,July 2,
(In millions)2023202220232022
Revenues
Life Sciences Solutions
$2,463 $3,292 $5,075 $7,523 
Analytical Instruments
1,749 1,607 3,472 3,125 
Specialty Diagnostics
1,109 1,101 2,217 2,583 
Laboratory Products and Biopharma Services
5,831 5,537 11,594 10,979 
Eliminations
(465)(567)(961)(1,422)
Consolidated revenues
10,687 10,970 21,397 22,788 
Segment Income
Life Sciences Solutions
817 1,327 1,653 3,503 
Analytical Instruments
432 344 853 645 
Specialty Diagnostics
297 243 577 596 
Laboratory Products and Biopharma Services
824 691 1,617 1,311 
Subtotal reportable segments
2,370 2,605 4,700 6,055 
Cost of revenues adjustments
(18)(8)(59)(19)
Selling, general and administrative expenses adjustments
(6)28 (14)21 
Restructuring and other costs
(183)(24)(295)(26)
Amortization of acquisition-related intangible assets
(585)(600)(1,191)(1,209)
Consolidated operating income
1,578 2,001 3,141 4,822 
Interest income 178 36 324 54 
Interest expense(326)(148)(626)(284)
Other income/(expense)
 28 (46)(135)
Consolidated income before taxes
$1,430 $1,917 $2,793 $4,457 
Cost of revenues adjustments included in the above table consist of charges for the sale of inventories revalued at the date of acquisition, inventory write-downs associated with large-scale abandonment of product lines, and accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations. 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
(In millions)July 1, 2023July 2, 2022July 1, 2023July 2, 2022
Revenues
United States
$5,531 $5,846 $11,118 $11,943 
China
856 1,001 1,726 1,911 
Other
4,300 4,123 8,553 8,934 
Consolidated revenues
$10,687 $10,970 $21,397 $22,788 
12


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 5.    Income Taxes
The provision for income taxes in the accompanying statements 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:
Six months ended
(In millions)July 1, 2023July 2, 2022
Statutory federal income tax rate
21 %21 %
Provision for income taxes at statutory rate
$587 $936 
Increases (decreases) resulting from:
Foreign rate differential
(125)(138)
Income tax credits
(136)(117)
Global intangible low-taxed income
46 46 
Foreign-derived intangible income
(55)(71)
Excess tax benefits from stock options and restricted stock units
(37)(31)
Provision for (reversal of) tax reserves, net
8 13 
Intra-entity transfers
(144)(18)
Foreign exchange loss on inter-company debt refinancing
(112) 
Provision for (reversal of) valuation allowances, net
66 (175)
Withholding taxes
12 33 
Tax return reassessments and settlements
(38)(4)
State income taxes, net of federal tax
53 67 
Other, net
(27)(42)
Provision for income taxes
$98 $499 
The company has operations and a taxable presence in approximately 70 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 July 1, 2023 the company had $0.56 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)2023
Balance at beginning of year
$572 
Additions for tax positions of current year
4 
Additions for tax positions of prior years
26 
Reductions for tax positions of prior years
(27)
Settlements
(18)
Balance at end of period
$557 
Note 6.    Earnings per Share
Three months endedSix months ended
July 1,July 2,July 1,July 2,
(In millions except per share amounts)2023202220232022
Net income attributable to Thermo Fisher Scientific Inc.$1,361 $1,664 $2,650 $3,879 
Basic weighted average shares386 392 386 392 
Plus effect of: stock options and restricted stock units2 2 2 2 
Diluted weighted average shares388 394 388 394 
Basic earnings per share$3.53 $4.25 $6.86 $9.90 
Diluted earnings per share$3.51 $4.22 $6.83 $9.83 
Antidilutive stock options excluded from diluted weighted average shares
2 2 2 2 
13


THERMO FISHER SCIENTIFIC INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 7.    Debt and Other Financing Arrangements
Effective interest rate at July 1,July 1,December 31,
(Dollars in millions)202320232022
Commercial Paper5.59 %$500 $310 
Floating Rate (SOFR + 0.35%) 1.5-Year Senior Notes, Due 4/18/2023
— 1,000 
Floating Rate (SOFR + 0.39%) 2-Year Senior Notes, Due 10/18/2023
500 500 
0.797% 2-Year Senior Notes, Due 10/18/2023
1.03 %1,350 1,350 
Floating Rate (EURIBOR + 0.20%)