Form 8-K

LIFE TECHNOLOGIES CORPORATION

(Registrant)

/s/ David F. Hoffmeister

Chief Financial Officer

0001193125-12-325787.txt : 20120731 0001193125-12-325787.hdr.sgml : 20120731 20120731160201 ACCESSION NUMBER: 0001193125-12-325787 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20120731 ITEM INFORMATION: Results of Operations and Financial Condition ITEM INFORMATION: Regulation FD Disclosure ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20120731 DATE AS OF CHANGE: 20120731 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Life Technologies Corp CENTRAL INDEX KEY: 0001073431 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 330373077 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-25317 FILM NUMBER: 12996873 BUSINESS ADDRESS: STREET 1: 5791 VAN ALLEN WAY CITY: CARLSBAD STATE: CA ZIP: 92008 BUSINESS PHONE: 7606037200 MAIL ADDRESS: STREET 1: 5791 VAN ALLEN WAY CITY: CARLSBAD STATE: CA ZIP: 92008 FORMER COMPANY: FORMER CONFORMED NAME: INVITROGEN CORP DATE OF NAME CHANGE: 19981113 8-K 1 d388585d8k.htm FORM 8-K Form 8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of Earliest Event Reported): July 31, 2012

Life Technologies Corporation

(Exact name of registrant as specified in its charter)

Delaware

000-25317

33-0373077

(State or other jurisdiction of

incorporation)

(Commission File Number)

(IRS Employer

Identification No.)


5791 Van Allen Way, Carlsbad, CA				92008
(Address of principal executive offices)				(Zip Code)

Registrant’s telephone number, including area code: (760) 603-7200

N/A

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

On July 31, 2012, Life Technologies Corporation, or the Company, issued a press release regarding the Company’s financial results for the period ended June 30, 2012. The full text of the Company’s press release is attached hereto as Exhibit 99.1.

Certain of the information set forth in the press release may be considered non-GAAP financial measures. We regularly have reported non-GAAP results for net income and earnings per share in addition to, and not as a substitute for, or superior to, financial measures calculated in accordance with GAAP. The non-GAAP results exclude merger related non-cash items and other costs. Additionally, the discussion surrounding sales performance related to these results excludes the impact of currency fluctuations period over period and acquisitions to measure core sales growth. This growth rate is referred to as organic growth.

Our financial results under GAAP include substantial non-cash charges and tax benefits related to acquired businesses. Our non-GAAP calculations of net income and earnings per share are limited because they do not reflect the entirety of our business costs. However, management believes that the non-GAAP presentation is a useful supplemental disclosure to investors as it provides an indication of the profitability and cash flows of the combined businesses apart from the costs related to acquisitions. Also included in the non-GAAP results are certain business transformation cash expenses which management does not believe are indicative of profitability for ongoing business activities. Management believes that this information is therefore useful to investors in analyzing and assessing our past and future operating performance.

In addition to the non-cash charges above, we exclude from our non-GAAP results the following costs:

•

Acquisition related amortization, depreciation, contingent consideration revaluation and asset or liability remeasurements;

•

In process research and development expenses or impairments;

•

Acquisition and divestiture related gains and losses;

•

Intangible asset impairment charges related to acquisition portfolio review;

•

Business consolidation costs required to realize cost synergies from combining our acquired entities with our existing operations;

•

Certain personnel, benefits, travel and third party costs associated with ongoing acquisition and business transformation activities;

•

Certain costs associated with rebranding and marketing activities;

•

Charges associated with the early repayment of debt and non-cash interest expense associated with convertible debt bifurcation;

•

Certain significant one-time events, and the related compensation impact, that are unlikely to recur in the foreseeable future; and

•

Tax changes and benefits associated with the above exclusions.

Management views these costs as not indicative of the profitability or cash flows of its ongoing or future operations and excludes these costs as a supplemental disclosure to assist investors in evaluating and assessing our past and future operational performance. Management uses non-GAAP earnings as a primary indicator in planning and forecasting for future periods, including trending the Company’s core performance period over period. Management uses these non-GAAP earnings to prepare operating budgets and forecasts and uses these results to measure performance at a corporate level. The Company primarily uses non-GAAP earnings for evaluating management’s performance for compensation purposes.

Item 7.01. REGULATION FD DISCLOSURE.

See the information set forth under Item 2.02 above and attached as Exhibit 99.1 hereto.

Item 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits.

99.1 Life Technologies Corporation press release dated July 31, 2012.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: July 31, 2012

EX-99.1 2 d388585dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

LOGO

Investor and Financial Contact:

Carol Cox

Investor Relations

(760) 603-7208

Life Technologies Announces Second Quarter 2012 Results

Revenue increased to $950 million

GAAP earnings per share (EPS) increased to $0.67, or $0.96 on a non-GAAP basis, an increase of 8 percent

Free Cash Flow of $232 million

Company repurchased $150 million of shares through July; total of $335 million year to date

CARLSBAD, CA, July 31, 2012 – Life Technologies Corporation (NASDAQ: LIFE) today announced results for its second quarter ended June 30, 2012. Revenue for the second quarter was $950 million, an increase of 1 percent over the $945 million reported for the second quarter of 2011. Excluding the impact of currency, revenue growth for the quarter was 1 percent compared to the same period of the prior year.

“We finished the first half of 2012 in line with our expectations, as strength in our BioProduction and Ion Torrent businesses enabled us to grow revenue in the second quarter by 5 percent, excluding nearly $40 million in headwinds from expected declines in sales of our SOLiD™ 5500 product and qPCR royalties,” said Gregory T. Lucier, chairman and chief executive officer of Life Technologies.

“During the quarter, we continued to deliver on our innovation pipeline, launching new Ion AmpliSeq™ clinical research products, selling a record number of our QuantStudio™ digital qPCR instruments and expanding our capabilities to commercialize novel stem cell technologies. In July, we made significant progress in building out our diagnostics franchise with the tuck-in acquisitions of Navigenics and Pinpoint Genomics, which in combination will allow us to offer a unique lung cancer clinical test to the pathology and oncology community.”

“For the second half of 2012, we continue to expect solid growth in our Ion Torrent platform, as we begin shipping Ion Proton™ Sequencers in September, and in our emerging and applied markets. However, based primarily on increased headwinds from currency and an incrementally more conservative outlook for our European operations, we are revising our 2012 guidance. We are now expecting our organic revenue growth to be at the low end of our previously provided range of 2 to 4 percent and non-GAAP earnings per share in a range of $3.90 to $4.00.”

Life Technologies reported current quarter results compared to the quarter ended June 30, 2011. Results are non-GAAP unless indicated otherwise. A full reconciliation of the non-GAAP measures to GAAP can be found in the tables of today’s press release.

Analysis of Second Quarter 2012 Results

•

Second quarter revenue increased 1 percent over the prior year. Revenue growth without the impact from currency was 1 percent.

•

Gross margin in the second quarter was 65.4 percent, approximately 120 basis points higher than the same period of the prior year primarily driven by favorable product mix from an expected decline in SOLiD revenue and a benefit from the roll off of currency hedges which were in place last year, partially offset by lower royalty revenue.

•

Operating margin was 28.6 percent in the second quarter, approximately 80 basis points higher than the same period of the prior year. Operating margin improvement was primarily due to improved gross margins, partially offset by the company’s annual merit and promotion increases and continued investment in Greater China, Ion Torrent and Medical Sciences.

•

Second quarter tax rate was 27.6 percent.

•

Second quarter EPS increased 8 percent to $0.96 and included a $0.02 impact from weaker foreign exchange rates compared to the company’s guidance at March month end rates.

•

Diluted weighted shares outstanding were 181.3 million in the second quarter, a decrease of 3.5 million shares over the prior year. The decrease was a result of the continuation of the company’s share repurchase program, partially offset by dilution from employee equity programs and issuance of shares associated with Ion Torrent milestone. The company repurchased $150 million or 3.6 million shares through July. Year to date, the company repurchased a total of $335 million or 7.6 million shares.

•

Cash flow from operating activities for the second quarter was $256 million. Second quarter capital expenditures were $24 million, resulting in free cash flow of $232 million. The company ended the quarter with $303 million in cash and short-term investments.

Business Group Highlights:

•

Research Consumables revenue was $403 million, an increase of 1 percent compared to the prior year. Excluding the impact from currency, revenue for the business group grew 1 percent, as a result of growth in cell culture products, benchtop instruments, and molecular biology consumables.

•

Genetic Analysis revenue was $353 million in the second quarter, a decrease of 6 percent over the same period last year. Excluding the impact from currency, revenue decreased 6 percent as a result of an expected $30 million decline in SOLiD instrument sales and an $8 million decline in qPCR royalties, offset by increased sales in Ion Torrent. Excluding the impact of the SOLiD and qPCR royalties, Genetic Analysis increased 5 percent.

•

Applied Sciences revenue was $194 million in the second quarter, an increase of 15 percent over the same period last year. Excluding the impact from currency, revenue grew 15 percent, primarily due to increases in BioProduction and Forensics.

•

Regional revenue growth rates excluding currency for the quarter compared to the same quarter of the prior year were as follows: the Americas declined 2 percent, Europe grew 1 percent, Asia Pacific grew 17 percent and Japan declined 6 percent. Excluding the decline in SOLiD and qPCR royalty revenues, the Americas grew 2 percent, Europe grew 4 percent, Asia Pacific grew 19 percent and Japan grew 2 percent.

Board of Directors Authorized $750 million Share Repurchase

The company announced that its Board of Directors has approved a share repurchase program, authorizing the company to purchase up to $750 million of its common stock. This is in addition to the approximately $62 million remaining as of July 31, 2012 from existing share repurchase authorizations.

“We remain committed to a balanced capital allocation program that includes returning a significant portion of our free cash flow annually to investors and using the remaining cash flow to support strategic opportunities in key franchises and expansion into new markets,” said Gregory T. Lucier, chairman and chief executive officer of Life Technologies. “In 2012, we have already spent $335 million to repurchase shares and are committed to executing on this new authorization beginning in the second half of 2012.”

Fiscal Year 2012 Outlook

Subject to the risk factors detailed in the Safe Harbor Statement section of this release, the company is updating its guidance to reflect increased headwinds from foreign exchange rates at June month end rates and an incrementally more conservative outlook to its operations in Europe. The company’s updated 2012 guidance is for organic revenue growth at the low end of its previously provided range of 2 to 4 percent over 2011 revenues of $3.7 billion. Additionally, the company is lowering the top end of its range by $0.05 and is now expecting non-GAAP earnings per share in a range of $3.90 to $4.00. The revision to non-GAAP EPS range is based on weaker foreign exchange rates at June month end and the dilution from the recently announced acquisitions of Navigenics, Inc. and Pinpoint Genomics, Inc. The company will provide further detail on its business outlook during the webcast today.

Webcast Details

The company will discuss its financial and business results as well as its business outlook on its webcast at 4:30 PM ET today. This webcast will contain forward-looking information. The webcast will include a discussion of “non-GAAP financial measures” as that term is defined in Regulation G. For actual results, the most directly comparable GAAP financial measures and information reconciling these non-GAAP financial measures to the company’s financial results determined in accordance with GAAP, as well as other material financial and statistical information to be discussed on the webcast will be posted at the company’s investor relations website at https://ir.lifetechnologies.com. The webcast can be accessed through the investor relations page of the company’s website at https://ir.lifetechnologies.com/events.cfm. A replay of the webcast will be available on the company’s website through Tuesday, August 21, 2012.

About Life Technologies

Life Technologies Corporation (NASDAQ: LIFE) is a global biotechnology company with customers in more than 160 countries using its innovative solutions to solve some of today’s most difficult scientific challenges. Quality and innovation are accessible to every lab with its reliable and easy-to-use solutions spanning the biological spectrum with more than 50,000 products for agricultural biotechnology, translational research, molecular medicine and diagnostics, stem cell-based therapies, forensics, food safety and animal health. Its systems, reagents and consumables represent some of the most cited brands in scientific research including: Ion Torrent™, Applied Biosystems^®, Invitrogen™, GIBCO^®, Ambion^®, Molecular Probes^®, Novex^®, and TaqMan^®. Life Technologies employs approximately 10,400 people and upholds its ongoing commitment to innovation with more than 4,000 patents and exclusive licenses. LIFE had sales of $3.7 billion in 2011. Visit us at our website: www.lifetechnologies.com.

Safe Harbor Statement

Certain statements contained in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and Life Technologies intends that such forward-looking statements be subject to the safe harbor created thereby. Forward-looking statements may be identified by words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” or words of similar meaning and include, but are not limited to, statements about the expected future business and financial performance of the company. Such forward-looking statements include, but are not limited to, statements relating to financial projections, including revenue and pro forma EPS projections; success of acquired businesses, including cost and revenue synergies; development and increased flow of new products; leveraging technology and personnel; advanced opportunities and efficiencies; opportunities for growth; expectations of prospective new standards, new delivery platforms, and new selling specialization and effectiveness; and corporate strategy and performance. A number of the matters discussed in this press release and presentation that are not historical or current facts deal with potential future circumstances and developments, including future research and development plans. The discussion of such matters is qualified by the inherent risks and uncertainties surrounding future expectations generally and other factors that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to: volatility of the financial markets; and the risks that are described from time to time in Life Technologies’ reports filed with the SEC. This press release and presentation speaks only as of its date, and the company disclaims any duty to update the information herein.

Non-GAAP Measurements

This press release includes certain financial information which constitutes “non-GAAP financial measures” as defined by the SEC. The GAAP measures which are most directly comparable to these measures, as well as a reconciliation of these measures with the most directly comparable GAAP measures, can be found on the investor relations portion of the company’s website at www.lifetechnologies.com.

Investor and Financial Contact:

Carol Cox

Investor Relations

(760) 603-7208

ir@lifetech.com

LIFE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except per share data)	For the three months ended June 30, 2012			For the three months ended June 30, 2011
(unaudited)
Revenues	$	949,309		$	941,135
Cost of revenues		328,359			340,075
Purchased intangibles amortization		75,961			76,476

Gross profit		544,989			524,584

Gross margin		57.4	%		55.7	%
Operating expenses:
Selling, general and administrative		266,049			254,764
Research and development		84,816			91,085
Business consolidation costs		9,429			18,666

Total operating expenses		360,294			364,515

Operating income		184,695			160,069
Operating margin		19.5	%		17.0	%
Interest income		515			1,153
Interest expense		(29,237	)		(42,774	)
Other expense, net		(2,600	)		(3,589	)

Total other expense, net		(31,322	)		(45,210	)

Income from operations before provision for income taxes		153,373			114,859
Income tax provision		(31,070	)		(19,646	)

Net income		122,303			95,213
Net loss attributable to non-controlling interests		51			253

Net income attributable to controlling interest	$	122,354		$	95,466
Effective tax rate		20.3	%		17.1	%
Add back interest expense for subordinated debt, net of tax		—			33

Numerator for diluted earnings per share	$	122,354		$	95,499

Earnings per common share:
Basic earnings per share attributable to controlling interest	$	0.69		$	0.53

Diluted earnings per share attributable to controlling interest	$	0.67		$	0.52

Weighted average shares used in per share calculation:
Basic		178,168			179,031
Diluted		181,307			184,761

LIFE TECHNOLOGIES CORPORATION

ITEMIZED RECONCILIAITON BETWEEN

GAAP AND NON-GAAP NET INCOME


(in thousands, except per share data)	For the three months ended June 30, 2012			For the three months ended June 30, 2011
(unaudited)
GAAP net income	$	122,303		$	95,213

Non-GAAP revenue adjustments
Purchase accounting related adjustments		278			801
Charges on a discontinued product		—			2,837

Total Non-GAAP revenue adjustments		278	⁽¹⁾		3,638	⁽¹⁾

Non-GAAP cost of revenues and purchased intangible adjustments
Purchased intangibles amortization		75,961			76,476
Charges on a discontinued product		—			2,094

Total Non-GAAP cost of revenues and purchased intangible adjustments		75,961	⁽²⁾		78,570	⁽²⁾

Non-GAAP Operating Expense Adjustments:
Purchase accounting related adjustments		923			1,921
Business consolidation costs		9,429			18,666

Total Non-GAAP Operating Expense Adjustments		10,352	⁽³⁾		20,587	⁽³⁾

Non-GAAP Other Expense Adjustments:
Noncash interest expense charges		—			8,833
Other expense		5			—

Total Non-GAAP Other Expense Adjustments		5	⁽⁴⁾		8,833	⁽⁴⁾

Non-GAAP Income Tax Provision Adjustments:
Income tax adjustments		(35,053	)⁽⁵⁾		(43,434	)⁽⁵⁾

Total Non-GAAP Income Tax Provision Adjustments		(35,053	)		(43,434	)

Non-GAAP Net Income	$	173,846		$	163,407
Non-GAAP loss attributable to controlling interest		51	⁽⁶⁾		148	⁽⁶⁾

Non-GAAP Net Income Attributable to Controlling Interest	$	173,897		$	163,555
Add back of interest expense for subordinated debt, net of tax		—			33
Non-GAAP Numerator for diluted earnings per share	$	173,897		$	163,588

Non-GAAP Earnings per common share:
Basic earnings per share attributable to controlling interest	$	0.98		$	0.91

Diluted earnings per share attributable to controlling interest	$	0.96		$	0.89


Weighted average shares used in per share calculation:
Basic		178,168			179,031
Diluted		181,307			184,761

Summary of Reconciliation between GAAP and Non-GAAP Net Income

For the three months ended June 30, 2012, Non-GAAP earnings resulted in total revenue of $949.6 million, gross profit of $621.2 million with gross margin of 65.4%, operating profit of $271.3 million with operating margin of 28.6%, and an income tax provision of $66.1 million with the Non-GAAP effective tax rate of 27.6% with the above adjustments.

For the three months ended June 30, 2011, Non-GAAP earnings resulted in total revenue of $944.8 million, gross profit of $606.8 million with gross margin of 64.2%, operating profit of $262.9 million with operating margin of 27.8%, and an income tax provision of $63.1 million with the Non-GAAP effective tax rate of 27.9% with the above adjustments.

Notes

⁽¹⁾	Add back purchased deferred revenue of $0.3 million and $0.8 million for the three months ended June 30, 2012 and 2011, respectively, and add back revenue related to returns of a discontinued product of $2.8 million for the three months ended June 30, 2011.

⁽²⁾	Add back amortization of purchased intangibles of $76.0 million and $76.5 million for the three months ended June 30, 2012 and 2011, respectively, and add back charges for inventory reserves related to a discontinued product of $2.1 million for the three months ended June 30, 2011.

⁽³⁾

Add back depreciation of purchase accounting property, plant, and equipment revaluation of $0.9 million and $1.9 million, and business consolidation costs including restructuring and integrating acquired entities, aligning acquired and existing operations through business transformation activities and costs associated with divesting entities of $9.4 million and $18.7 million for the three months ended June 30, 2012 and 2011, respectively.

⁽⁴⁾

Add back charges related to non-cash interest expense for senior convertible debts of $7.3 million and imputed finance charge of $1.5 million associated with contingent consideration on business acquisitions for the three months ended June 30, 2011, and other non-recurring charges for the three months ended June 30, 2012.

⁽⁵⁾

Non-GAAP tax adjustment due to the exclusion of the aforementioned business combination related charges, non cash charges, and one-time costs which are not indicative of the profitability or cash flows of the Company’s ongoing or future operations. These deductions produce a GAAP only tax benefit which is added back for Non-GAAP presentation.

⁽⁶⁾	Non-GAAP net loss attributable to non-controlling interest, net of tax benefit, adjusted for noncash charges for purchase accounting property, plant, and equipment revaluation, net of tax benefit.

The Company reports Non-GAAP results which excludes costs that are not indicative of the profitability or cash flows of the Company’s ongoing or future operations. Such costs are restructuring cost, business transformation expenses, amortization and depreciation of deferred revenue, intangibles assets, and fixed assets, and revaluation charges for inventories, contingent consideration liabilities, asset impairments, and in process research and development expenses, incurred as a result of business combinations as well as the impact from the divestiture and discontinuance of product lines. The Company also excludes noncash interest expense associated with convertible debt bifurcation and noncash charges associated with non-controlling interests. In addition, the Company excludes one-time costs including the early repayment of debt and the associated impacts, and the impact of certain settlements in order to provide a supplemental comparison of the results of operations.

LIFE TECHNOLOGIES CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS


(in thousands, except per share data)	For the six months ended June 30, 2012			For the six months ended June 30, 2011
(unaudited)
Revenues	$	1,888,423		$	1,837,029
Cost of revenues		642,041			640,778
Purchased intangibles amortization		148,066			152,627

Gross profit		1,098,316			1,043,624

Gross margin		58.2	%		56.8	%
Operating expenses:
Selling, general and administrative		519,447			507,606
Research and development		173,413			183,859
Business consolidation costs		23,696			33,349

Total operating expenses		716,556			724,814

Operating income		381,760			318,810
Operating margin		20.2	%		17.4	%
Interest income		1,279			2,040
Interest expense		(64,975	)		(85,919	)
Other expense, net		(8,316	)		(4,941	)

Total other expense, net		(72,012	)		(88,820	)

Income from operations before provision for income taxes		309,748			229,990
Income tax provision		(54,806	)		(41,198	)

Net income		254,942			188,792
Net loss attributable to non-controlling interests		51			361

Net income attributable to controlling interest	$	254,993		$	189,153

Effective tax rate		17.7	%		17.9	%
Add back interest expense for subordinated debt, net of tax		12			66

Numerator for diluted earnings per share	$	255,005		$	189,219

Earnings per common share:
Basic earnings per share attributable to controlling interest	$	1.43		$	1.05

Diluted earnings per share attributable to controlling interest	$	1.40		$	1.02

Weighted average shares used in per share calculation:
Basic		178,521			179,698
Diluted		182,210			185,513

LIFE TECHNOLOGIES CORPORATION

ITEMIZED RECONCILIAITON BETWEEN

GAAP AND NON-GAAP NET INCOME


(in thousands, except per share data)	For the six months ended June 30, 2012			For the six months ended June 30, 2011
(unaudited)
GAAP net income	$	254,942		$	188,792

Non-GAAP revenue adjustments
Purchase accounting related adjustments		642			1,731
Charges on a discontinued product		(457	)		2,836

Total Non-GAAP revenue adjustments		185	⁽¹⁾		4,567	⁽¹⁾

Non-GAAP cost of revenues and purchased intangible adjustments
Purchased intangibles amortization		148,066			152,627
Purchase accounting related adjustments		—			(1,372	)
Charges on a discontinued product		—			2,094
Settlement of historical portion of licensing dispute		(169	)		—

Total Non-GAAP cost of revenues and purchased intangible adjustments		147,897	⁽²⁾		153,349	⁽²⁾

Non-GAAP Operating Expense Adjustments:
Purchase accounting related adjustments		1,849			5,519
Business consolidation costs		23,696			33,349
Settlement of historical portion of licensing dispute		(934	)		—

Total Non-GAAP Operating Expense Adjustments		24,611	⁽³⁾		38,868	⁽³⁾

Non-GAAP Other Expense Adjustments:
Noncash interest expense charges		5,382			17,558
Other expense		5,302			—

Total Non-GAAP Other Expense Adjustments		10,684	⁽⁴⁾		17,558	⁽⁴⁾

Non-GAAP Income Tax Provision Adjustments:
Income tax adjustments		(83,128	) ⁽⁵⁾		(81,999	) ⁽⁵⁾

Total Non-GAAP Income Tax Provision Adjustments		(83,128	)		(81,999	)

Non-GAAP Net Income	$	355,191		$	321,135
Non-GAAP loss attributable to controlling interest		51	⁽⁶⁾		158	⁽⁶⁾

Non-GAAP Net Income Attributable to Controlling Interest	$	355,242		$	321,293
Add back interest expense for subordinated debt, net of tax		12			66
Non-GAAP Numerator for diluted earnings per share	$	355,254		$	321,359

Non-GAAP Earnings per common share:
Basic earnings per share attributable to controlling interest	$	1.99		$	1.79

Diluted earnings per share attributable to controlling interest	$	1.95		$	1.73

Weighted average shares used in per share calculation:
Basic		178,521			179,698
Diluted		182,210			185,513

Summary of Reconciliation between GAAP and Non-GAAP Net Income

For the six months ended June 30, 2012, Non-GAAP earnings resulted in total revenue of $1.9 billion, gross profit of $1.2 billion with gross margin of 66.0%, operating profit of $554.5 million with operating margin of 29.4%, and an income tax provision of $137.9 million with the Non-GAAP effective tax rate of 28.0% with the above adjustments.

For the six months ended June 30, 2011, Non-GAAP earnings resulted in total revenue of $1.8 billion, gross profit of $1.2 billion with gross margin of 65.2%, operating profit of $515.6 million with operating margin of 28.0%, and an income tax provision of $123.2 million with the Non-GAAP effective tax rate of 27.7% with the above adjustments.

Notes

⁽¹⁾

Add back purchased deferred revenue of $0.6 million and adjust for revenue related to a discontinued product of $0.5 million for the six months ended June 30, 2012. Add back purchased deferred revenue of $1.7 million and revenue related to returns of a discontinued product of $2.8 million for the six months ended June 30, 2011.

⁽²⁾

Add back amortization of purchased intangibles of $148.1 million and adjust for $0.2 million related to the historical portion of the settlement of a licensing dispute for the six months ended June 30, 2012. Add back amortization of purchased intangibles of $152.6 million, charges for inventory reserves related to a discontinued product of $2.1 million, and purchase accounting related cost of revenue revaluation of $0.5 million which was offset by contingent consideration revaluation of $1.9 million for the six months ended June 30, 2011.

⁽³⁾

Add back depreciation of purchase accounting property, plant, and equipment revaluation of $1.8 million and $5.5 million, and business consolidation costs including restructuring and integrating acquired entities, aligning acquired and existing operations through business transformation activities and costs associated with divesting entities of $23.7 million and $33.3 million for the six months ended June 30, 2012 and 2011, respectively. Adjust for compensation cost of $0.9 million related to the historical portion of the settlement of a licensing dispute for the six months ended June 30, 2012.

⁽⁴⁾

Add back charges associated with a divestiture activity of $5.3 million, charges related to non-cash interest expense for senior convertible debts of $1.7 million and the extinguishment of a line of credit facility of $3.7 million for the six months ended June 30, 2012. Add back charges related to non-cash interest expense for senior convertible debts of $14.5 million and charges for imputed finance charge of $3.1 million associated with contingent consideration on business acquisitions for the six months ended June 30, 2011.

⁽⁵⁾

⁽⁶⁾	Non-GAAP net loss attributable to non-controlling interest, net of tax benefit, adjusted for noncash charges for purchase accounting property, plant, and equipment revaluation, net of tax benefit.

LIFE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	For the six months ended June 30,
(in thousands)(unaudited)	2012			2011
Net income	$	254,942		$	188,792
Add back amortization and share-based compensation		197,206			200,391
Add back depreciation		62,005			60,366
Balance sheet changes		(46,413	)		(103,168	)
Other noncash adjustments		(107,773	)		(26,842	)

Net cash provided by operating activities		359,967			319,539
Capital expenditures		(48,747	)		(33,799	)

Free cash flow		311,220			285,740
Net cash used in investing activities		(61,101	)		(50,101	)
Net cash used in financing activities		(822,918	)		(543,721	)
Effect of exchange rate changes on cash		(5,995	)		14,641

Net decrease in cash and cash equivalents	$	(578,794	)	$	(293,441	)

LIFE TECHNOLOGIES CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS


(in thousands)	June 30, 2012		December 31, 2011
	(unaudited)
ASSETS
Current assets:
Cash and short-term investments	$	303,450	$	881,994
Trade accounts receivable, net of allowance for doubtful accounts		630,436		636,998
Inventories		395,808		377,866
Prepaid expenses and other current assets		209,113		196,759

Total current assets		1,538,807		2,093,617

Long-term assets		6,943,203		7,094,346

Total assets	$	8,482,010	$	9,187,963

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Current portion of long-term debt	$	252,677	$	450,839
Short-term borrowings		100,000		—
Accounts payable, accrued expenses and other current liabilities		662,298		1,045,467

Total current liabilities		1,014,975		1,496,306

Long-term debt		2,047,280		2,297,653
Other long-term liabilities		727,909		794,778
Stockholders’ equity		4,691,846		4,599,226

Total liabilities and stockholders’ equity	$	8,482,010	$	9,187,963

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