THERMO FISHER SCIENTIFIC INC. [TMO] Filings

10-Q 1 tmo-20240629.htm 10-Q tmo-20240629

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 June 29, 2024 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)


Delaware			04-2209186
(State or other jurisdiction of incorporation or organization)			(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 class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $1.00 par value

TMO

New York Stock Exchange

0.750% Notes due 2024

TMO 24A

New York Stock Exchange

0.125% Notes due 2025

TMO 25B

New York Stock Exchange

2.000% Notes due 2025

TMO 25

New York Stock Exchange

3.200% Notes due 2026

TMO 26B

New York Stock Exchange

1.400% Notes due 2026

TMO 26A

New York Stock Exchange

1.450% Notes due 2027

TMO 27

New York Stock Exchange

1.750% Notes due 2027

TMO 27B

New York Stock Exchange

0.500% Notes due 2028

TMO 28A

New York Stock Exchange

1.375% Notes due 2028

TMO 28

New York Stock Exchange

1.950% Notes due 2029

TMO 29

New York Stock Exchange

0.875% Notes due 2031

TMO 31

New York Stock Exchange

2.375% Notes due 2032

TMO 32

New York Stock Exchange

3.650% Notes due 2034

TMO 34

New York Stock Exchange

2.875% Notes due 2037

TMO 37

New York Stock Exchange

1.500% Notes due 2039

TMO 39

New York Stock Exchange

1.875% Notes due 2049

TMO 49

New 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 June 29, 2024, the Registrant had 381,995,566 shares of Common Stock outstanding.

THERMO FISHER SCIENTIFIC INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED JUNE 29, 2024


TABLE OF CONTENTS
		Page
PART I - FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Income	4
	Condensed Consolidated Statements of Comprehensive Income	5
	Condensed Consolidated Statements of Cash Flows	6
	Condensed Consolidated Statements of Redeemable Noncontrolling Interest and Equity	7
	Notes to Condensed Consolidated Financial Statements	9
	Note 1. Nature of Operations and Summary of Significant Accounting Policies	9
	Note 2. Acquisitions	10
	Note 3. Revenues and Contract-related Balances	11
	Note 4. Business Segment and Geographical Information	13
	Note 5. Income Taxes	14
	Note 6. Earnings per Share	15
	Note 7. Debt and Other Financing Arrangements	15
	Note 8. Commitments and Contingencies	17
	Note 9. Comprehensive Income/(Loss) and Shareholders' Equity	18
	Note 10. Fair Value Measurements and Fair Value of Financial Instruments	19
	Note 11. Supplemental Cash Flow Information	21
	Note 12. Restructuring and Other Costs	22

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	31

Item 4.	Controls and Procedures	31

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	32

Item 5.	Other Information	32

Item 6.	Exhibits	33

THERMO FISHER SCIENTIFIC INC.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 29,		December 31,
(In millions except share and per share amounts)	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	7,073	$	8,077
Short-term investments	1,750		3
Accounts receivable, less allowances of $202 and $193	7,943		8,221
Inventories	5,198		5,088
Contract assets, net	1,487		1,443

Other current assets	2,025		1,757
Total current assets	25,476		24,589
Property, plant and equipment, net	9,282		9,448
Acquisition-related intangible assets, net	15,519		16,670
Other assets	4,377		3,999
Goodwill	43,843		44,020
Total assets	$	98,496	$	98,726

Liabilities, redeemable noncontrolling interest and equity
Current liabilities:
Short-term obligations and current maturities of long-term obligations	$	5,121	$	3,609
Accounts payable	2,547		2,872
Accrued payroll and employee benefits	1,495		1,596
Contract liabilities	2,591		2,689
Other accrued expenses	3,019		3,246
Total current liabilities	14,772		14,012
Deferred income taxes	1,516		1,922
Other long-term liabilities	4,391		4,642
Long-term obligations	30,284		31,308
Redeemable noncontrolling interest	115		118
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; 443,105,658 and 442,188,634 shares issued	443		442
Capital in excess of par value	17,649		17,286
Retained earnings	49,940		47,364
Treasury stock at cost, 61,110,092 and 55,541,290 shares	(18,187)		(15,133)
Accumulated other comprehensive income/(loss)	(2,413)		(3,224)
Total Thermo Fisher Scientific Inc. shareholders’ equity	47,432		46,735
Noncontrolling interests	(12)		(11)
Total equity	47,419		46,724
Total liabilities, redeemable noncontrolling interest and equity	$	98,496	$	98,726

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three months ended				Six months ended
	June 29,		July 1,		June 29,		July 1,
(In millions except per share amounts)	2024		2023		2024		2023
Revenues
Product revenues	$	6,163	$	6,271	$	12,118	$	12,675
Service revenues	4,378		4,416		8,768		8,722
Total revenues	10,541		10,687		20,886		21,397

Costs and operating expenses:
Cost of product revenues	3,080		3,278		6,019		6,615
Cost of service revenues	3,114		3,158		6,315		6,391
Selling, general and administrative expenses	2,111		2,145		4,293		4,264
Research and development expenses	339		345		670		691
Restructuring and other costs	77		183		106		295
Total costs and operating expenses	8,722		9,109		17,404		18,256
Operating income	1,820		1,578		3,483		3,141
Interest income	295		178		574		324
Interest expense	(354)		(326)		(717)		(626)
Other income/(expense)	5		—		14		(46)
Income before income taxes	1,765		1,430		3,354		2,793
Provision for income taxes	(128)		(52)		(408)		(98)
Equity in earnings/(losses) of unconsolidated entities	(84)		(16)		(61)		(41)
Net income	1,553		1,362		2,885		2,654
Less: net income/(losses) attributable to noncontrolling interests and redeemable noncontrolling interest	6		1		9		4
Net income attributable to Thermo Fisher Scientific Inc.	$	1,548	$	1,361	$	2,875	$	2,650

Earnings per share attributable to Thermo Fisher Scientific Inc.
Basic	$	4.05	$	3.53	$	7.53	$	6.86
Diluted	$	4.04	$	3.51	$	7.50	$	6.83

Weighted average shares
Basic	382		386		382		386
Diluted	383		388		383		388

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three months ended				Six months ended
	June 29,		July 1,		June 29,		July 1,
(In millions)	2024		2023		2024		2023
Comprehensive income
Net income	$	1,553	$	1,362	$	2,885	$	2,654
Other comprehensive income/(loss):
Currency translation adjustment:
Currency translation adjustment (net of tax provision (benefit) of $88, $0, $255 and $(36))	346		125		802		169

Unrealized gains/(losses) on available-for-sale debt securities
Unrealized holding losses arising during the period (net of tax (provision) benefit of $0, $0, $0 and $0)	—		—		(1)		—
Unrealized gains/(losses) on hedging instruments:

Reclassification adjustment for losses included in net income (net of tax (provision) benefit of $0, $0, $0 and $1)	1		1		1		4
Pension and other postretirement benefit liability adjustments:
Pension and other postretirement benefit liability adjustments arising during the period (net of tax (provision) benefit of $0, $1, $0 and $0)	—		(1)		1		—
Amortization of net loss included in net periodic pension cost (net of tax (provision) benefit of $0, $0, $0 and $0)	1		(2)		1		(2)
Total other comprehensive income/(loss)	348		123		805		171
Comprehensive income	1,901		1,485		3,689		2,825
Less: comprehensive income/(loss) attributable to noncontrolling interests and redeemable noncontrolling interest	3		(6)		3		—
Comprehensive income attributable to Thermo Fisher Scientific Inc.	$	1,899	$	1,491	$	3,686	$	2,825

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended
	June 29,		July 1,
(In millions)	2024		2023
Operating activities
Net income	$	2,885	$	2,654
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	562		523
Amortization of acquisition-related intangible assets	1,065		1,191
Change in deferred income taxes	(607)		(328)


Stock-based compensation	154		150
Other non-cash expenses, net	157		330

Changes in assets and liabilities, excluding the effects of acquisitions	(1,003)		(2,251)
Net cash provided by operating activities	3,211		2,269

Investing activities

Purchases of property, plant and equipment	(648)		(742)
Proceeds from sale of property, plant and equipment	20		10
Proceeds from cross-currency interest rate swap interest settlements	111		35
Acquisitions, net of cash acquired	—		(2,751)
Purchases of investments	(1,778)		(188)
Other investing activities, net	12		51
Net cash used in investing activities	(2,283)		(3,585)

Financing activities
Net proceeds from issuance of debt	1,204		—
Repayment of debt	—		(1,000)
Proceeds from issuance of commercial paper	—		1,620
Repayments of commercial paper	—		(1,441)
Purchases of company common stock	(3,000)		(3,000)
Dividends paid	(284)		(252)

Other financing activities, net	145		24
Net cash used in financing activities	(1,936)		(4,049)

Exchange rate effect on cash	7		(19)
Decrease in cash, cash equivalents and restricted cash	(1,000)		(5,384)
Cash, cash equivalents and restricted cash at beginning of period	8,097		8,537
Cash, cash equivalents and restricted cash at end of period	$	7,097	$	3,153

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY

(Unaudited)


	Redeemable Noncontrolling Interest		Common Stock			Capital in Excess of Par Value		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Items		Total Thermo Fisher Scientific Inc. Shareholders’ Equity		Noncontrolling Interests		Total Equity
(In millions)			Shares	Amount						Shares	Amount

			Three months ended June 29, 2024
Balance at March 30, 2024	$	119	443	$	443	$	17,482	$	48,542	61	$	(18,186)	$	(2,764)	$	45,516	$	(12)	$	45,504
Issuance of shares under employees' and directors' stock plans	—		—	—		83		—		—	(2)		—		81		—		81
Stock-based compensation	—		—	—		84		—		—	—		—		84		—		84

Dividends declared ($0.39 per share)	—		—	—		—		(149)		—	—		—		(149)		—		(149)
Net income/(loss)	6		—	—		—		1,548		—	—		—		1,548		—		1,548
Other comprehensive items	(3)		—	—		—		—		—	—		351		351		—		351
Contributions from (distributions to) noncontrolling interests	(7)		—	—		—		—		—	—		—		—		—		—
Excise tax from stock repurchases	—		—	—		—		—		—	1		—		1		—		1
Balance at June 29, 2024	$	115	443	$	443	$	17,649	$	49,940	61	$	(18,187)	$	(2,413)	$	47,432	$	(12)	$	47,419

			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

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

THERMO FISHER SCIENTIFIC INC.

CONDENSED CONSOLIDATED STATEMENTS OF REDEEMABLE NONCONTROLLING INTEREST AND EQUITY (Continued)

(Unaudited)


	Redeemable Noncontrolling Interest		Common Stock			Capital in Excess of Par Value		Retained Earnings		Treasury Stock			Accumulated Other Comprehensive Items		Total Thermo Fisher Scientific Inc. Shareholders’ Equity		Noncontrolling Interests		Total Equity
(In millions)			Shares	Amount						Shares	Amount

























			Six months ended June 29, 2024
Balance at December 31, 2023	$	118	442	$	442	$	17,286	$	47,364	56	$	(15,133)	$	(3,224)	$	46,735	$	(11)	$	46,724

Issuance of shares under stock plans	—		1	1		209		—		—	(26)		—		184		—		184
Stock-based compensation	—		—	—		154		—		—	—		—		154		—		154
Purchases of company common stock	—		—	—		—		—		6	(3,000)		—		(3,000)		—		(3,000)
Dividends declared ($0.78 per share)	—		—	—		—		(298)		—	—		—		(298)		—		(298)

Net income/(loss)	10		—	—		—		2,875		—	—		—		2,875		(1)		2,874
Other comprehensive items	(6)		—	—		—		—		—	—		811		811		—		811
Contributions from (distributions to) noncontrolling interest	(7)		—	—		—		—		—	—		—		—		(1)		(1)
Excise tax from stock repurchases	—		—	—		—		—		—	(28)		—		(28)		—		(28)

Balance at June 29, 2024	$	115	443	$	443	$	17,649	$	49,940	61	$	(18,187)	$	(2,413)	$	47,432	$	(12)	$	47,419

			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 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 items	(4)		—	—		—		—		—	—		175		175		—		175
Contributions from (distributions to) noncontrolling interest	(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

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

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 June 29, 2024, the results of operations for the three- and six-month periods ended June 29, 2024 and July 1, 2023, and the cash flows for the six-month periods ended June 29, 2024 and July 1, 2023. Interim results are not necessarily indicative of results for a full year.

The condensed consolidated balance sheet presented as of December 31, 2023 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 2023 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 2023 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 June 29, 2024.

Amounts and percentages reported within these condensed consolidated financial statements are presented and calculated based on underlying unrounded amounts. As a result, the sum of components may not equal corresponding totals due to rounding.

Inventories

The components of inventories are as follows:




(In millions)	June 29, 2024		December 31, 2023
Raw materials	$	1,974	$	2,057
Work in process	825		705
Finished goods	2,399		2,326
Inventories	$	5,198	$	5,088

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

The following table provides a description of recent accounting pronouncements adopted and those standards not yet adopted with potential for a material impact on the company's financial statements or disclosures.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Standard

Description

Required adoption timing and approach

Impact of adoption or other significant matters

Standards recently adopted

ASU No. 2022-04, Liabilities-Supplier Finance Programs (Subtopic 405-50): Disclosure of Supplier Finance Program Obligations

New guidance 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 supplier finance programs for each period presented.

Some aspects adopted in 2023 using a retrospective method and will adopt other aspects in 2024 annual report using a prospective method

Not material

Standards not yet adopted

ASU No. 2023-07, Segment Reporting (Topic 280): Improving Reportable Segment Disclosures

Among other things, new guidance to disclose significant segment expenses and other items by reportable segment as well as information about the chief operating decision maker.

2024 annual report and interim periods thereafter using a retrospective method

Will increase disclosures in Note 4

ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures

Among other things, new guidance to disclose additional information about the tax rate reconciliation and income taxes paid.

2025 annual report and interim periods thereafter using a prospective or retrospective method

Will increase disclosures in Note 5

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.

2024

On July 10, 2024, the company acquired, within the Life Sciences Solutions segment, Olink Holding AB (publ), a Swedish-based provider of next-generation proteomics solutions. The acquisition enhances the segment’s capabilities in the high-growth proteomics market with the addition of highly differentiated solutions. It also complements the existing life sciences and mass spectrometry offerings, accelerating protein biomarker discovery and providing strong synergy opportunities. The goodwill recorded as a result of this business combination is not expected to be tax deductible.

The components of the preliminary purchase price and net assets acquired are as follows:


(In billions)	Olink
Purchase price
Cash paid	$	3.19



Fair value of noncontrolling interest	0.06
Cash acquired	(0.04)
	$	3.21

Net assets acquired


Definite-lived intangible assets	$	0.99






Goodwill	2.28
Net tangible assets	0.13

Deferred tax assets (liabilities)	(0.19)




	$	3.21

The weighted-average amortization period for definite-lived intangible assets is 18 years.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

The preliminary allocation of the purchase price for the acquisition of Olink is based on the estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization, largely with respect to acquired intangible assets and the related deferred taxes. Measurements of these items inherently require significant estimates and assumptions.

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.

On August 14, 2023, the company acquired, within the Laboratory Products and Biopharma Services segment, CorEvitas, LLC, a U.S.-based provider of regulatory-grade, real-world evidence for approved medical treatments and therapies. The acquisition expands the segment’s portfolio with the addition of highly complementary real-world evidence solutions to enhance decision-making as well as the time and cost of drug development. 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		CorEvitas
Purchase price
Cash paid	$	2,412	$	730
Debt settled	307		184


Cash acquired	(20)		(4)
	$	2,699	$	910

Net assets acquired


Definite-lived intangible assets:
Customer relationships	$	868	$	260
Product technology	162		47
Tradenames	42		—
Backlog	—		46


Goodwill	1,741		627
Net tangible assets	174		(2)

Deferred tax assets (liabilities)	(288)		(68)




	$	2,699	$	910

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 periods for definite-lived intangible assets acquired in 2023 are 18 years for customer relationships, 14 years for product technology, 15 years for tradenames, and 13 years for backlog. The weighted average amortization period for all definite-lived intangible assets acquired in 2023 is 17 years.

Note 3. Revenues and Contract-related Balances

Disaggregated Revenues

Revenues by type are as follows:


	Three months ended				Six months ended

(In millions)	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues
Consumables	$	4,363	$	4,433	$	8,690	$	8,939
Instruments	1,800		1,838		3,428		3,736
Services	4,378		4,416		8,768		8,722
Consolidated revenues	$	10,541	$	10,687	$	20,886	$	21,397

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Revenues by geographic region based on customer location are as follows:


	Three months ended				Six months ended


(In millions)	June 29, 2024		July 1, 2023		June 29, 2024		July 1, 2023
Revenues
North America	$	5,529	$	5,714	$	11,048	$	11,492
Europe	2,663		2,654		5,282		5,255
Asia-Pacific	1,971		1,902		3,831		3,888
Other regions	379		417		725		762
Consolidated revenues	$	10,541	$	10,687	$	20,886	$	21,397

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 June 29, 2024 was $25.93 billion. The company will recognize revenues for these performance obligations as they are satisfied, approximately 52% 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)	June 29, 2024		December 31, 2023
Current contract assets, net	$	1,487	$	1,443
Noncurrent contract assets, net	7		4
Current contract liabilities	2,591		2,689
Noncurrent contract liabilities	1,455		1,499

In the three and six months ended June 29, 2024, the company recognized revenues of $0.67 billion and $2.00 billion, respectively, that were included in the contract liabilities balance at December 31, 2023. 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.

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 4. Business Segment and Geographical Information

Business Segment Information


	Three months ended				Six months ended
	June 29,		July 1,		June 29,		July 1,
(In millions)	2024		2023		2024		2023
Revenues
Life Sciences Solutions	$	2,355	$	2,463	$	4,640	$	5,075
Analytical Instruments	1,782		1,749		3,469		3,472
Specialty Diagnostics	1,117		1,109		2,227		2,217
Laboratory Products and Biopharma Services	5,758		5,831		11,480		11,594
Eliminations	(470)		(465)		(930)		(961)
Consolidated revenues	10,541		10,687		20,886		21,397

Segment Income
Life Sciences Solutions	865		817		1,705		1,653
Analytical Instruments	439		432		838		853
Specialty Diagnostics	299		297		593		577
Laboratory Products and Biopharma Services	745		824		1,489		1,617
Subtotal reportable segments	2,347		2,370		4,625		4,700
Cost of revenues adjustments	(1)		(18)		(17)		(59)
Selling, general and administrative expenses adjustments	64		(6)		45		(14)
Restructuring and other costs	(77)		(183)		(106)		(295)
Amortization of acquisition-related intangible assets	(513)		(585)		(1,065)		(1,191)
Consolidated operating income	1,820		1,578		3,483		3,141
Interest income	295		178		574		324
Interest expense