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Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

Mar. 30, 2013

Nature of Operations and Summary of Significant Accounting Policies [Abstract]

Nature of Operations and Summary of Significant Accounting Policies [Text Block]

Note 1. Nature of Operations and Summary of Significant Accounting Policies

Nature of Operations

Thermo Fisher Scientific Inc. (the company) enables customers to make the world healthier, cleaner and safer by providing analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. Markets served include pharmaceutical and biotech companies, hospitals and clinical diagnostic labs, universities, research institutions and government agencies, as well as environmental and industrial process control settings.

Interim Financial Statements

The interim consolidated financial statements presented herein have been prepared by Thermo Fisher Scientific Inc. (the company or Thermo Fisher), 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 March 30, 2013, the results of operations for the three-month periods ended March 30, 2013, and March 31, 2012, and the cash flows for the three-month periods ended March 30, 2013, and March 31, 2012. Interim results are not necessarily indicative of results for a full year.

The consolidated balance sheet presented as of December 31, 2012, has been derived from the audited consolidated financial statements as of that date. The consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain all of the information that is included in the annual financial statements and notes of the company. The consolidated financial statements and notes included in this report should be read in conjunction with the 2012 financial statements and notes included in the company's Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC) on February 27, 2013.

Note 1 to the consolidated financial statements for 2012 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 three months ended March 30, 2013.

Presentation

Certain reclassifications of prior year amounts have been made to conform to the current year presentation.

Warranty Obligations

Product warranties are included in other accrued expenses in the accompanying balance sheet. The changes in the carrying amount of warranty obligations are as follows:

			Three Months Ended
		March 30,			March 31,
(In millions)			2013			2012

Beginning Balance			$	48.7		$	42.2
	Provision charged to income			17.8			13.2
	Usage			(18.9)			(14.3)
	Adjustments to previously provided warranties, net			0.2			—
	Other, net			(0.7)			0.4

Ending Balance			$	47.1		$	41.5

Inventories

The components of inventories are as follows:

	March 30,			December 31,
(In millions)			2013	2012

Raw Materials		$	363.5	$	362.0
Work in Process			162.5		149.7
Finished Goods			948.6		931.6

		$	1,474.6	$	1,443.3

Property, Plant and Equipment

Property, plant and equipment consists of the following:

	March 30,			December 31,
(In millions)			2013	2012

Land		$	211.7	$	216.6
Buildings and Improvements			794.9		805.5
Machinery, Equipment and Leasehold Improvements			1,842.8		1,829.9

			2,849.4		2,852.0
Less: Accumulated Depreciation and Amortization			1,163.6		1,125.6

		$	1,685.8	$	1,726.4

Acquisition-related Intangible Assets

Acquisition-related intangible assets are as follows:

	March 30, 2013							December 31, 2012
			Accumulated							Accumulated
(In millions)	Gross			Amortization		Net		Gross			Amortization		Net

Definite Lives	$	10,305.9		$	(4,085.6)	$	6,220.3	$	10,403.1		$	(3,939.2)	$	6,463.9
Indefinite Lives		1,340.6			—		1,340.6		1,340.6			—		1,340.6

	$	11,646.5		$	(4,085.6)	$	7,560.9	$	11,743.7		$	(3,939.2)	$	7,804.5

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. In addition, significant estimates were made in estimating future cash flows to assess potential impairment of assets, and in determining the ultimate loss from selling discontinued operations and abandoning leases at facilities being exited (Note 13). Actual results could differ from those estimates.

Recent Accounting Pronouncements

In February 2013, the FASB issued new guidance which requires disclosure of information about significant reclassification adjustments from accumulated other comprehensive income in a single note or on the face of the financial statements. This guidance became effective for the company in 2013. Adoption of this standard, which is related to disclosure only, did not have an impact on the company's consolidated financial position, results of operations or cash flows.

In July 2012, the FASB modified existing rules to allow entities to use a qualitative approach to test indefinite-lived intangible asset for impairment. The revised standard allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. This guidance became effective for the company in 2013. Adoption of this standard did not have an impact on the company's consolidated financial position, results of operations or cash flows.

In December 2011, the FASB issued new guidance which requires enhanced disclosures on offsetting amounts within the balance sheet, including disclosing gross and net information about instruments and transactions eligible for offset or subject to a master netting or similar agreement. Adoption of this standard, which is related to disclosure only, did not have an impact on the company's consolidated financial position, results of operations or cash flows.

- Definition

The entire disclosure for the organization, consolidation and basis of presentation of financial statements disclosure, and significant accounting policies of the reporting entity. May be provided in more than one note to the financial statements, as long as users are provided with an understanding of (1) the significant judgments and assumptions made by an enterprise in determining whether it must consolidate a VIE and/or disclose information about its involvement with a VIE, (2) the nature of restrictions on a consolidated VIE's assets reported by an enterprise in its statement of financial position, including the carrying amounts of such assets, (3) the nature of, and changes in, the risks associated with an enterprise's involvement with the VIE, and (4) how an enterprise's involvement with the VIE affects the enterprise's financial position, financial performance, and cash flows. Describes procedure if disclosures are provided in more than one note to the financial statements.

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