Delaware
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1-8002
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04-2209186
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(State or other jurisdiction of
incorporation or organization)
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(Commission File Number)
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(I.R.S. Employer Identification Number)
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81 Wyman Street
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Waltham, Massachusetts
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02451
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(Address of principal executive offices)
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(Zip Code)
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(781) 622-1000
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(Registrant’s telephone number
including area code)
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THERMO FISHER SCIENTIFIC INC.
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By:
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/s/ Peter E. Hornstra
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Peter E. Hornstra
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Vice President and Chief Accounting Officer
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FOR IMMEDIATE RELEASE
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Media Contact Information:
Karen Kirkwood
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Investor Contact Information:
Ken Apicerno
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Phone: 781-622-1306
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Phone: 781-622-1294
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E-mail: karen.kirkwood@thermofisher.com
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E-mail: ken.apicerno@thermofisher.com
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Website: www.thermofisher.com
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·
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Grew adjusted earnings per share (EPS) by 32% to $1.71.
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·
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Increased revenue by 31% to $4.17 billion.
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·
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Expanded adjusted operating margin by 250 basis points to 21.9%.
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·
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Generated free cash flow of $0.59 billion in the quarter and $1.42 billion year to date.
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·
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Achieved a breakthrough in ultrahigh performance liquid chromatography (UHPLC) with the launch of the Thermo Scientific Vanquish system, which provides both accuracy and speed in a single platform for food safety, industrial and biopharma applications.
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·
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Showcased expanded capabilities for clinical customers at AACC (American Association for Clinical Chemistry), including specialty diagnostics as well as analytical instruments and software now listed with the FDA as Class 1 medical devices for clinical use.
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Consolidated Statement of Income (unaudited) (a)(b) |
Three Months Ended
|
|||||||||||||||
September 27,
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% of
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September 28,
|
% of
|
|||||||||||||
(In millions except per share amounts)
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2014
|
Revenues
|
2013
|
Revenues
|
||||||||||||
Revenues
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$ | 4,171.4 | $ | 3,191.8 | ||||||||||||
Costs and Operating Expenses:
|
||||||||||||||||
Cost of revenues (c)
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2,127.0 | 51.0% | 1,788.2 | 56.0% | ||||||||||||
Selling, general and administrative expenses (d)
|
976.6 | 23.4% | 713.2 | 22.3% | ||||||||||||
Amortization of acquisition-related intangible assets
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362.9 | 8.7% | 191.0 | 6.0% | ||||||||||||
Research and development expenses
|
175.2 | 4.2% | 95.9 | 3.0% | ||||||||||||
Restructuring and other costs (income), net (e)
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(110.6 | ) | -2.7% | 11.4 | 0.4% | |||||||||||
3,531.1 | 84.7% | 2,799.7 | 87.7% | |||||||||||||
Operating Income
|
640.3 | 15.3% | 392.1 | 12.3% | ||||||||||||
Interest Income
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10.5 | 7.1 | ||||||||||||||
Interest Expense
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(116.8 | ) | (64.3 | ) | ||||||||||||
Other Income (Expense), Net (f)
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5.2 | (15.9 | ) | |||||||||||||
Income Before Income Taxes
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539.2 | 319.0 | ||||||||||||||
Provision for Income Taxes (g)
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(69.3 | ) | (1.3 | ) | ||||||||||||
Income from Continuing Operations
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469.9 | 317.7 | ||||||||||||||
Gain (Loss) from Discontinued Operations, Net of Tax
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1.7 | (0.1 | ) | |||||||||||||
Net Income
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$ | 471.6 | 11.3% | $ | 317.6 | 10.0% | ||||||||||
Earnings per Share from Continuing Operations:
|
||||||||||||||||
Basic
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$ | 1.17 | $ | .88 | ||||||||||||
Diluted
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$ | 1.16 | $ | .86 | ||||||||||||
Earnings per Share:
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||||||||||||||||
Basic
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$ | 1.18 | $ | .88 | ||||||||||||
Diluted
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$ | 1.17 | $ | .86 | ||||||||||||
Weighted Average Shares:
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||||||||||||||||
Basic
|
399.9 | 361.2 | ||||||||||||||
Diluted
|
403.7 | 367.3 | ||||||||||||||
Reconciliation of Adjusted Operating Income and Adjusted Operating Margin
|
||||||||||||||||
GAAP Operating Income (a)
|
$ | 640.3 | 15.3% | $ | 392.1 | 12.3% | ||||||||||
Cost of Revenues Charges (c)
|
2.1 | 0.1% | 0.9 | 0.0% | ||||||||||||
Selling, General and Administrative Costs, Net (d)
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20.3 | 0.5% | 24.0 | 0.7% | ||||||||||||
Restructuring and Other Costs (Income), Net (e)
|
(110.6 | ) | -2.7% | 11.4 | 0.4% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
362.9 | 8.7% | 191.0 | 6.0% | ||||||||||||
Adjusted Operating Income (b)
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$ | 915.0 | 21.9% | $ | 619.4 | 19.4% | ||||||||||
Reconciliation of Adjusted Net Income
|
||||||||||||||||
GAAP Net Income (a)
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$ | 471.6 | 11.3% | $ | 317.6 | 10.0% | ||||||||||
Cost of Revenues Charges (c)
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2.1 | 0.1% | 0.9 | 0.0% | ||||||||||||
Selling, General and Administrative Costs, Net (d)
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20.3 | 0.5% | 24.0 | 0.7% | ||||||||||||
Restructuring and Other Costs (Income), Net (e)
|
(110.6 | ) | -2.7% | 11.4 | 0.4% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
362.9 | 8.7% | 191.0 | 6.0% | ||||||||||||
Other (Income) Expense, Net (f)
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(3.6 | ) | -0.1% | 17.2 | 0.5% | |||||||||||
Provision for Income Taxes (g)
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(50.7 | ) | -1.2% | (85.2 | ) | -2.7% | ||||||||||
Discontinued Operations, Net of Tax
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(1.7 | ) | -0.1% | 0.1 | 0.0% | |||||||||||
Adjusted Net Income (b)
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$ | 690.3 | 16.5% | $ | 477.0 | 14.9% | ||||||||||
Reconciliation of Adjusted Earnings per Share
|
||||||||||||||||
GAAP EPS (a)
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$ | 1.17 | $ | 0.86 | ||||||||||||
Cost of Revenues Charges, Net of Tax (c)
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(0.04 | ) | — | |||||||||||||
Selling, General and Administrative Costs, Net of Tax (d)
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0.02 | 0.05 | ||||||||||||||
Restructuring and Other Costs (Income), Net of Tax (e)
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— | 0.02 | ||||||||||||||
Amortization of Acquisition-related Intangible Assets, Net of Tax
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0.57 | 0.35 | ||||||||||||||
Other (Income) Expense, Net of Tax (f)
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(0.01 | ) | 0.03 | |||||||||||||
Provision for Income Taxes (g)
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— | (0.01 | ) | |||||||||||||
Discontinued Operations, Net of Tax
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— | — | ||||||||||||||
Adjusted EPS (b)
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$ | 1.71 | $ | 1.30 | ||||||||||||
Reconciliation of Free Cash Flow
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||||||||||||||||
GAAP Net Cash Provided by Operating Activities (a)
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$ | 676.0 | $ | 505.5 | ||||||||||||
Net Cash Used in Discontinued Operations
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1.6 | 1.6 | ||||||||||||||
Purchases of Property, Plant and Equipment
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(90.7 | ) | (56.3 | ) | ||||||||||||
Proceeds from Sale of Property, Plant and Equipment
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7.0 | 12.3 | ||||||||||||||
Free Cash Flow (h)
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$ | 593.9 | $ | 463.1 |
Segment Data
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Three Months Ended
|
|||||||||||||||
September 27,
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% of
|
September 28,
|
% of
|
|||||||||||||
(In millions)
|
2014
|
Revenues
|
2013
|
Revenues
|
||||||||||||
Revenues
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||||||||||||||||
Life Sciences Solutions
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$ | 1,071.9 | 25.7% | $ | 167.2 | 5.2% | ||||||||||
Analytical Instruments
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786.5 | 18.9% | 765.4 | 24.0% | ||||||||||||
Specialty Diagnostics
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811.8 | 19.5% | 759.3 | 23.8% | ||||||||||||
Laboratory Products and Services
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1,628.7 | 39.0% | 1,594.7 | 50.0% | ||||||||||||
Eliminations
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(127.5 | ) | -3.1% | (94.8 | ) | -3.0% | ||||||||||
Consolidated Revenues
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$ | 4,171.4 | 100.0% | $ | 3,191.8 | 100.0% | ||||||||||
Operating Income and Operating Margin
|
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Life Sciences Solutions
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$ | 306.3 | 28.6% | $ | 38.9 | 23.3% | ||||||||||
Analytical Instruments
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137.8 | 17.5% | 131.0 | 17.1% | ||||||||||||
Specialty Diagnostics
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224.3 | 27.6% | 204.2 | 26.9% | ||||||||||||
Laboratory Products and Services
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246.6 | 15.1% | 245.3 | 15.4% | ||||||||||||
Subtotal Reportable Segments
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915.0 | 21.9% | 619.4 | 19.4% | ||||||||||||
Cost of Revenues Charges (c)
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(2.1 | ) | -0.1% | (0.9 | ) | 0.0% | ||||||||||
Selling, General and Administrative Costs, Net (d)
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(20.3 | ) | -0.5% | (24.0 | ) | -0.7% | ||||||||||
Restructuring and Other (Costs) Income, Net (e)
|
110.6 | 2.7% | (11.4 | ) | -0.4% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
(362.9 | ) | -8.7% | (191.0 | ) | -6.0% | ||||||||||
GAAP Operating Income (a)
|
$ | 640.3 | 15.3% | $ | 392.1 | 12.3% |
(a) | "GAAP" (reported) results were determined in accordance with U.S. generally accepted accounting principles (GAAP). With the completion of the Life Technologies acquisition, we have established a new reporting segment, Life Sciences Solutions, and the Biosciences businesses have been transferred from the Analytical Instruments segment to the Life Sciences Solutions and Laboratory Products and Services segments. Prior period segment information has been reclassified to reflect these transfers. |
(b) | Adjusted results are non-GAAP measures and, for income measures, exclude certain charges to cost of revenues (see note (c) for details); certain credits/charges to selling, general and administrative expenses (see note (d) for details); amortization of acquisition-related intangible assets; restructuring and other costs, net (see note (e) for details); certain other gains or losses that are either isolated or cannot be expected to occur again with any regularity or predictability (see note (f) for details); the tax consequences of the preceding items and certain other tax items (see note (g) for details); and results of discontinued operations. |
(c) | Reported results in 2014 include $0.8 of charges for the sale of inventories revalued at the date of acquisition. Reported results in 2014 and 2013 include $1.3 and $0.9, respectively, of accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations. |
(d) | Reported results in 2014 and 2013 include i) $10.7 and $15.8, respectively, of third-party transaction/integration costs related to the acquisition of Life Technologies; ii) charges of $5.2 and $8.3, respectively, associated with product liability litigation; and iii) a $4.4 charge and $0.1 net credit, respectively, for changes in estimates of contingent consideration for acquisitions. |
(e) | Reported results in 2014 and 2013 include restructuring and other costs, net, consisting principally of severance, abandoned facility and other expenses of headcount reductions within several businesses and real estate consolidations and, in 2014, $132.6 of net gain on the sale of the Cole-Parmer business. |
(f) | Reported results in 2014 and 2013 include $0.5 and $0.5, respectively, of amortization of acquisition-related intangible assets of the company's equity investments. Reported results in 2014 include a $4.1 gain on an equity investment. Reported results in 2013 also include $20.0 of charges related to amortization of fees paid to obtain bridge financing commitments related to the Life Technologies acquisition, offset in part by a $3.3 gain from the sale of an equity investment. |
(g) | Reported provision for income taxes includes i) $50.6 and $82.0 of incremental tax benefit in 2014 and 2013, respectively, for the pre-tax reconciling items between GAAP and adjusted net income; and ii) in 2014 and 2013, $0.1 and $3.2, respectively, of incremental tax benefit from adjusting the company's deferred tax balances as a result of tax rate changes. |
(h) | Free cash flow in 2014 and 2013 was reduced by $22.3 and $21.9, respectively, of cash outlays related to the acquisition of Life Technologies including severance obligations, third-party transaction/integration costs and in 2013, fees to obtain bridge financing commitments. |
Notes:
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Consolidated depreciation expense is $92.8 and $59.4 in 2014 and 2013, respectively.
|
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Consolidated equity compensation expense included in both reported and adjusted results is $30.6 and $22.9 in 2014 and 2013, respectively.
|
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Certain pre-acquisition equity awards of Life Technologies were converted to rights to receive future cash payments over the remaining vesting period. In addition to the equity compensation expense noted above, reported and adjusted results in 2014 include $9.2 million of expense for such cash payments.
|
Consolidated Statement of Income (unaudited) (a)(b) |
Nine Months Ended
|
|||||||||||||||
September 27,
|
% of
|
September 28,
|
% of
|
|||||||||||||
(In millions except per share amounts)
|
2014
|
Revenues
|
2013
|
Revenues
|
||||||||||||
Revenues
|
$ | 12,396.8 | $ | 9,623.4 | ||||||||||||
Costs and Operating Expenses:
|
||||||||||||||||
Cost of revenues (c)
|
6,679.8 | 53.9% | 5,408.2 | 56.2% | ||||||||||||
Selling, general and administrative expenses (d)
|
2,984.0 | 24.1% | 2,141.2 | 22.2% | ||||||||||||
Amortization of acquisition-related intangible assets
|
992.4 | 8.0% | 574.2 | 6.0% | ||||||||||||
Research and development expenses
|
508.6 | 4.1% | 290.8 | 3.0% | ||||||||||||
Restructuring and other costs (income), net (e)
|
(631.9 | ) | -5.1% | 54.4 | 0.6% | |||||||||||
10,532.9 | 85.0% | 8,468.8 | 88.0% | |||||||||||||
Operating Income
|
1,863.9 | 15.0% | 1,154.6 | 12.0% | ||||||||||||
Interest Income
|
38.4 | 21.4 | ||||||||||||||
Interest Expense
|
(363.7 | ) | (193.1 | ) | ||||||||||||
Other Income (Expense), Net (f)
|
11.5 | (41.0 | ) | |||||||||||||
Income Before Income Taxes
|
1,550.1 | 941.9 | ||||||||||||||
Provision for Income Taxes (g)
|
(258.6 | ) | (5.8 | ) | ||||||||||||
Income from Continuing Operations
|
1,291.5 | 936.1 | ||||||||||||||
Gain (Loss) from Discontinued Operations, Net of Tax
|
1.7 | (0.7 | ) | |||||||||||||
Loss on Disposal of Discontinued Operations, Net of Tax
|
— | (4.2 | ) | |||||||||||||
Net Income
|
$ | 1,293.2 | 10.4% | $ | 931.2 | 9.7% | ||||||||||
Earnings per Share from Continuing Operations:
|
||||||||||||||||
Basic
|
$ | 3.25 | $ | 2.60 | ||||||||||||
Diluted
|
$ | 3.21 | $ | 2.57 | ||||||||||||
Earnings per Share:
|
||||||||||||||||
Basic
|
$ | 3.25 | $ | 2.59 | ||||||||||||
Diluted
|
$ | 3.22 | $ | 2.56 | ||||||||||||
Weighted Average Shares:
|
||||||||||||||||
Basic
|
397.5 | 359.8 | ||||||||||||||
Diluted
|
401.7 | 364.1 | ||||||||||||||
Reconciliation of Adjusted Operating Income and Adjusted Operating Margin
|
||||||||||||||||
GAAP Operating Income (a)
|
$ | 1,863.9 | 15.0% | $ | 1,154.6 | 12.0% | ||||||||||
Cost of Revenues Charges (c)
|
326.7 | 2.6% | 27.2 | 0.3% | ||||||||||||
Selling, General and Administrative Costs, Net (d)
|
118.0 | 1.0% | 47.9 | 0.4% | ||||||||||||
Restructuring and Other Costs (Income), Net (e)
|
(631.9 | ) | -5.1% | 54.4 | 0.6% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
992.4 | 8.0% | 574.2 | 6.0% | ||||||||||||
Adjusted Operating Income (b)
|
$ | 2,669.1 | 21.5% | $ | 1,858.3 | 19.3% | ||||||||||
Reconciliation of Adjusted Net Income
|
||||||||||||||||
GAAP Net Income (a)
|
$ | 1,293.2 | 10.4% | $ | 931.2 | 9.7% | ||||||||||
Cost of Revenues Charges (c)
|
326.7 | 2.6% | 27.2 | 0.3% | ||||||||||||
Selling, General and Administrative Costs, Net (d)
|
118.0 | 1.0% | 47.9 | 0.4% | ||||||||||||
Restructuring and Other Costs (Income), Net (e)
|
(631.9 | ) | -5.1% | 54.4 | 0.6% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
992.4 | 8.0% | 574.2 | 6.0% | ||||||||||||
Other (Income) Expense, Net (f)
|
(6.8 | ) | -0.1% | 46.4 | 0.5% | |||||||||||
Provision for Income Taxes (g)
|
(93.7 | ) | -0.7% | (234.8 | ) | -2.4% | ||||||||||
Discontinued Operations, Net of Tax
|
(1.7 | ) | 0.0% | 4.9 | 0.0% | |||||||||||
Adjusted Net Income (b)
|
$ | 1,996.2 | 16.1% | $ | 1,451.4 | 15.1% | ||||||||||
Reconciliation of Adjusted Earnings per Share
|
||||||||||||||||
GAAP EPS (a)
|
$ | 3.22 | $ | 2.56 | ||||||||||||
Cost of Revenues Charges, Net of Tax (c)
|
0.59 | 0.05 | ||||||||||||||
Selling, General and Administrative Costs, Net of Tax (d)
|
0.21 | 0.10 | ||||||||||||||
Restructuring and Other Costs (Income), Net of Tax (e)
|
(0.81 | ) | 0.11 | |||||||||||||
Amortization of Acquisition-related Intangible Assets, Net of Tax
|
1.80 | 1.10 | ||||||||||||||
Other (Income) Expense, Net of Tax (f)
|
(0.01 | ) | 0.07 | |||||||||||||
Provision for Income Taxes (g)
|
(0.03 | ) | (0.01 | ) | ||||||||||||
Discontinued Operations, Net of Tax
|
— | 0.01 | ||||||||||||||
Adjusted EPS (b)
|
$ | 4.97 | $ | 3.99 | ||||||||||||
Reconciliation of Free Cash Flow
|
||||||||||||||||
GAAP Net Cash Provided by Operating Activities (a)
|
$ | 1,665.9 | $ | 1,282.2 | ||||||||||||
Net Cash Used in Discontinued Operations
|
3.5 | 3.3 | ||||||||||||||
Purchases of Property, Plant and Equipment
|
(270.9 | ) | (187.9 | ) | ||||||||||||
Proceeds from Sale of Property, Plant and Equipment
|
19.7 | 15.9 | ||||||||||||||
Free Cash Flow (h)
|
$ | 1,418.2 | $ | 1,113.5 |
Segment Data
|
Nine Months Ended
|
|||||||||||||||
September 27,
|
% of
|
September 28,
|
% of
|
|||||||||||||
(In millions)
|
2014
|
Revenues
|
2013
|
Revenues
|
||||||||||||
Revenues
|
||||||||||||||||
Life Sciences Solutions
|
$ | 3,010.5 | 24.3% | $ | 520.8 | 5.4% | ||||||||||
Analytical Instruments
|
2,349.8 | 19.0% | 2,266.5 | 23.6% | ||||||||||||
Specialty Diagnostics
|
2,480.6 | 20.0% | 2,358.5 | 24.5% | ||||||||||||
Laboratory Products and Services
|
4,918.6 | 39.7% | 4,746.0 | 49.3% | ||||||||||||
Eliminations
|
(362.7 | ) | -3.0% | (268.4 | ) | -2.8% | ||||||||||
Consolidated Revenues
|
$ | 12,396.8 | 100.0% | $ | 9,623.4 | 100.0% | ||||||||||
Operating Income and Operating Margin
|
||||||||||||||||
Life Sciences Solutions
|
$ | 850.0 | 28.2% | $ | 123.4 | 23.7% | ||||||||||
Analytical Instruments
|
399.1 | 17.0% | 376.8 | 16.6% | ||||||||||||
Specialty Diagnostics
|
681.7 | 27.5% | 643.4 | 27.3% | ||||||||||||
Laboratory Products and Services
|
738.3 | 15.0% | 714.7 | 15.1% | ||||||||||||
Subtotal Reportable Segments
|
2,669.1 | 21.5% | 1,858.3 | 19.3% | ||||||||||||
Cost of Revenues Charges (c)
|
(326.7 | ) | -2.6% | (27.2 | ) | -0.3% | ||||||||||
Selling, General and Administrative Costs, Net (d)
|
(118.0 | ) | -1.0% | (47.9 | ) | -0.4% | ||||||||||
Restructuring and Other (Costs) Income, Net (e)
|
631.9 | 5.1% | (54.4 | ) | -0.6% | |||||||||||
Amortization of Acquisition-related Intangible Assets
|
(992.4 | ) | -8.0% | (574.2 | ) | -6.0% | ||||||||||
GAAP Operating Income (a)
|
$ | 1,863.9 | 15.0% | $ | 1,154.6 | 12.0% |
(a) | "GAAP" (reported) results were determined in accordance with U.S. generally accepted accounting principles (GAAP). With the completion of the Life Technologies acquisition, we have established a new reporting segment, Life Sciences Solutions, and the Biosciences businesses have been transferred from the Analytical Instruments segment to the Life Sciences Solutions and Laboratory Products and Services segments. Prior period segment information has been reclassified to reflect these transfers. |
(b) | Adjusted results are non-GAAP measures and, for income measures, exclude certain charges to cost of revenues (see note (c) for details); certain credits/charges to selling, general and administrative expenses (see note (d) for details); amortization of acquisition-related intangible assets; restructuring and other costs, net (see note (e) for details); certain other gains or losses that are either isolated or cannot be expected to occur again with any regularity or predictability (see note (f) for details); the tax consequences of the preceding items and certain other tax items (see note (g) for details); and results of discontinued operations. |
(c) | Reported results in 2014 and 2013 include $303.1 and $23.9, respectively, of charges for the sale of inventories revalued at the date of acquisition and $2.2 and $3.3, respectively, of accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations. Reported results in 2014 also include a charge of $21.4 to conform the accounting policies of Life Technologies with the company's accounting policies. |
(d) | Reported results in 2014 and 2013 include i) $88.6 and $26.1, respectively, of third-party transaction/integration costs related to the acquisition of Life Technologies; ii) charges of $5.2 and $8.3, respectively, associated with product liability litigation; and iii) charges of $8.0 and $13.5, respectively, for changes in estimates of contingent consideration for acquisitions. Reported results in 2014 also include a charge of $16.2 to conform the accounting policies of Life Technologies with the company's accounting policies. |
(e) | Reported results in 2014 include gains of $894.4 on the sale of businesses, principally the sera and media, gene modulation and magnetic beads businesses and the Cole-Parmer business, and a charge of $91.7 for cash compensation to monetize certain equity awards held by Life Technologies employees at the date of acquisition. Reported results in 2014 and 2013 include restructuring and other costs, net, consisting principally of severance, abandoned facility and other expenses of headcount reductions within several businesses and real estate consolidations. |
(f) | Reported results in 2014 and 2013 include $1.6 and $1.8, respectively, of amortization of acquisition-related intangible assets of the company's equity investments. Reported results in 2014 also include net gains of $9.4 from available-for-sale and equity investments, offset in part by $1.0 of charges related to amortization of fees paid to obtain financing commitments related to the Life Technologies acquisition. Reported results in 2013 also include $60.5 of charges related to amortization of fees paid to obtain bridge financing commitments related to the Life Technologies acquisition, offset in part by $10.5 of realized gains on available-for-sale investments irrevocably contributed to the company's UK pension plans and $5.4 of gains from sales of equity investments. |
(g) | Reported provision for income taxes includes i) $83.0 and $229.8 of incremental tax benefit in 2014 and 2013, respectively, for the pre-tax reconciling items between GAAP and adjusted net income; and ii) in 2014 and 2013, $10.7 and $5.0, respectively, of incremental tax benefit from adjusting the company's deferred tax balances as a result of tax rate changes. |
(h) | Free cash flow in 2014 and 2013 was reduced by $308.8 and $79.5, respectively, of cash outlays related to the acquisition of Life Technologies including monetizing certain equity awards, severance obligations, third-party transaction/integration costs and, in 2013, fees to obtain bridge financing commitments. |
Notes: |
Consolidated depreciation expense is $263.7 and $176.4 in 2014 and 2013, respectively. | |
Consolidated equity compensation expense included in both reported and adjusted results is $86.6 and $66.6 in 2014 and 2013, respectively. | |
Certain pre-acquisition equity awards of Life Technologies were converted to rights to receive future cash payments over the remaining vesting period. In addition to the equity compensation expense noted above, reported and adjusted results in 2014 include $26.3 million of expense for such cash payments.
|
Condensed Consolidated Balance Sheet (unaudited) | ||||||||
September 27,
|
December 31, | |||||||
(In millions)
|
2014 | 2013 | ||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 534.3 | $ | 5,826.0 | ||||
Short-term investments
|
9.3 | 4.5 | ||||||
Accounts receivable, net
|
2,507.1 | 1,942.3 | ||||||
Inventories
|
1,913.7 | 1,494.5 | ||||||
Other current assets
|
755.5 | 613.4 | ||||||
Total current assets
|
5,719.9 | 9,880.7 | ||||||
Property, Plant and Equipment, Net
|
2,406.1 | 1,767.4 | ||||||
Acquisition-related Intangible Assets
|
14,698.3 | 7,071.3 | ||||||
Other Assets
|
819.7 | 640.7 | ||||||
Goodwill
|
19,046.8 | 12,503.3 | ||||||
Total Assets
|
$ | 42,690.8 | $ | 31,863.4 | ||||
Liabilities and Shareholders' Equity
|
||||||||
Current Liabilities:
|
||||||||
Short-term obligations and current maturities of long-term obligations
|
$ | 3,088.5 | $ | 987.7 | ||||
Other current liabilities
|
3,133.6 | 2,138.3 | ||||||
Total current liabilities
|
6,222.1 | 3,126.0 | ||||||
Other Long-term Liabilities
|
4,569.5 | 2,381.7 | ||||||
Long-term Obligations
|
11,388.6 | 9,499.6 | ||||||
Total Shareholders' Equity
|
20,510.6 | 16,856.1 | ||||||
Total Liabilities and Shareholders' Equity
|
$ | 42,690.8 | $ | 31,863.4 |
Condensed Consolidated Statement of Cash Flows (unaudited) | Nine Months Ended | |||||||
September 27,
|
September 28,
|
|||||||
(In millions) |
2014
|
2013
|
||||||
Operating Activities
|
||||||||
Net income
|
$ | 1,293.2 | $ | 931.2 | ||||
(Gain) loss from discontinued operations
|
(1.7 | ) | 0.7 | |||||
Loss on disposal of discontinued operations
|
— | 4.2 | ||||||
Income from continuing operations
|
1,291.5 | 936.1 | ||||||
Adjustments to reconcile income from continuing operations to net cash provided by operating activities:
|
||||||||
Depreciation and amortization
|
1,256.1 | 750.6 | ||||||
Change in deferred income taxes
|
(583.8 | ) | (204.5 | ) | ||||
Net gains on sale of businesses
|
(894.4 | ) | — | |||||
Other non-cash expenses, net
|
356.4 | 67.7 | ||||||
Changes in assets and liabilities, excluding the effects of acquisitions and dispositions
|
243.6 | (264.4 | ) | |||||
Net cash provided by continuing operations
|
1,669.4 | 1,285.5 | ||||||
Net cash used in discontinued operations
|
(3.5 | ) | (3.3 | ) | ||||
Net cash provided by operating activities
|
1,665.9 | 1,282.2 | ||||||
Investing Activities
|
||||||||
Acquisitions, net of cash acquired
|
(13,056.1 | ) | (5.5 | ) | ||||
Purchases of property, plant and equipment
|
(270.9 | ) | (187.9 | ) | ||||
Proceeds from sale of property, plant and equipment
|
19.7 | 15.9 | ||||||
Proceeds from sale of businesses, net of cash divested
|
1,520.0 | — | ||||||
Other investing activities, net
|
130.6 | (15.8 | ) | |||||
Net cash used in investing activities
|
(11,656.7 | ) | (193.3 | ) | ||||
Financing Activities
|
||||||||
Net proceeds from issuance of debt
|
4,999.6 | (3.9 | ) | |||||
Increase in commercial paper, net
|
212.2 | — | ||||||
Repayment of long-term obligations
|
(3,430.3 | ) | (0.9 | ) | ||||
Decrease in short-term notes payable
|
(28.2 | ) | (0.7 | ) | ||||
Purchases of company common stock
|
— | (89.8 | ) | |||||
Dividends paid
|
(174.8 | ) | (162.0 | ) | ||||
Net proceeds from issuance of company common stock
|
2,942.0 | — | ||||||
Net proceeds from issuance of company common stock under employee stock plans
|
132.7 | 204.9 | ||||||
Tax benefits from stock-based compensation awards
|
61.1 | 39.8 | ||||||
Other financing activities, net
|
(7.5 | ) | (0.9 | ) | ||||
Net cash provided by (used in) financing activities
|
4,706.8 | (13.5 | ) | |||||
Exchange Rate Effect on Cash
|
(7.7 | ) | (35.4 | ) | ||||
(Decrease) Increase in Cash and Cash Equivalents
|
(5,291.7 | ) | 1,040.0 | |||||
Cash and Cash Equivalents at Beginning of Period
|
5,826.0 | 805.6 | ||||||
Cash and Cash Equivalents at End of Period
|
$ | 534.3 | $ | 1,845.6 | ||||
Free Cash Flow (a)(b)
|
$ | 1,418.2 | $ | 1,113.5 |
(a) | Free cash flow is net cash provided by operating activities of continuing operations less net purchases of property, plant and equipment. |
(b) | Free cash flow in 2014 and 2013 was reduced by $308.8 and $79.5, respectively, of cash outlays related to the acquisition of Life Technologies including monetizing certain equity awards, severance obligations, third-party transaction/integration costs and, in 2013, fees to obtain bridge financing commitments. |