10-Q

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 Quarter Ended September 28, 2019 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 of incorporation)	(I.R.S. Employer Identification No.)

168 Third Avenue

Waltham, Massachusetts 02451

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code: (781) 622-1000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	TMO	New York Stock Exchange
Floating Rate Notes due 2020	TMO /20A	New York Stock Exchange
2.150% Notes due 2022	TMO 22A	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
1.400% Notes due 2026	TMO 26A	New York Stock Exchange
1.450% Notes due 2027	TMO 27	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
2.875% 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 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 during the preceding 12 months. 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  ☐

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 September 28, 2019, the Registrant had 400,991,227 shares of Common Stock outstanding.

THERMO FISHER SCIENTIFIC INC.

QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 28, 2019

	TABLE OF CONTENTS
		Page
	PART I
Item 1.	Financial Statements (Unaudited)	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	30
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	41
	PART II
Item 1.	Legal Proceedings	41
Item 1A.	Risk Factors	41
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 6.	Exhibits	47

2

THERMO FISHER SCIENTIFIC INC.

PART I FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEET

(Unaudited)

	September 28,			December 31,
(In millions except share and per share amounts)	2019			2018
Assets
Current Assets:
Cash and cash equivalents	$	1,273		$	2,103
Accounts receivable, less allowances of $106 and $117	4,384			4,136
Inventories	3,308			3,005
Other current assets	1,549			1,381
Total current assets	10,514			10,625
Property, Plant and Equipment, Net	4,420			4,165
Acquisition-related Intangible Assets, Net	14,311			14,978
Other Assets	1,860			1,117
Goodwill	25,624			25,347
Total Assets	$	56,729		$	56,232
Liabilities and Shareholders' Equity
Current Liabilities:
Short-term obligations and current maturities of long-term obligations	$	661		$	1,271
Accounts payable	1,659			1,615
Accrued payroll and employee benefits	883			982
Contract liabilities	943			809
Other accrued expenses	1,698			1,470
Total current liabilities	5,844			6,147
Deferred Income Taxes	2,001			2,265
Other Long-term Liabilities	3,137			2,515
Long-term Obligations	16,392			17,719
Shareholders' Equity:
Preferred stock, $100 par value, 50,000 shares authorized; none issued
Common stock, $1 par value, 1,200,000,000 shares authorized; 434,028,435 and 431,566,561 shares issued	434			432
Capital in excess of par value	14,964			14,621
Retained earnings	21,165			18,696
Treasury stock at cost, 33,037,208 and 29,444,882 shares	(4,486		)	(3,665		)
Accumulated other comprehensive items	(2,722		)	(2,498		)
Total shareholders' equity	29,355			27,586
Total Liabilities and Shareholders' Equity	$	56,729		$	56,232

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

3

THERMO FISHER SCIENTIFIC INC.

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions except per share amounts)	2019			2018			2019			2018
Revenues
Product revenues	$	4,798		$	4,571		$	14,345		$	13,807
Service revenues	1,474			1,349			4,368			4,044
Total revenues	6,272			5,920			18,713			17,851
Costs and Operating Expenses:
Cost of product revenues	2,471			2,357			7,363			7,072
Cost of service revenues	1,038			948			3,057			2,846
Selling, general and administrative expenses	1,539			1,490			4,632			4,547
Research and development expenses	247			240			741			716
Restructuring and other costs (income), net	31			(27		)	(442		)	35
Total costs and operating expenses	5,326			5,008			15,351			15,216
Operating Income	946			912			3,362			2,635
Other Expense, Net	(124		)	(102		)	(330		)	(385		)
Income Before Income Taxes	822			810			3,032			2,250
Provision for Income Taxes	(62		)	(101		)	(338		)	(210		)
Net Income	$	760		$	709		$	2,694		$	2,040
Earnings per Share
Basic	$	1.89		$	1.76		$	6.73		$	5.07
Diluted	$	1.88		$	1.75		$	6.68		$	5.03
Weighted Average Shares
Basic	401			402			400			402
Diluted	404			406			403			406

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

4

THERMO FISHER SCIENTIFIC INC.

 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Comprehensive Income
Net Income	$	760		$	709		$	2,694		$	2,040
Other Comprehensive Items:
Currency translation adjustment:
Currency translation adjustment (net of tax provision of $77, $13, $92 and $60)	(91		)	(32		)	(222		)	(447		)
Reclassification adjustment for losses included in net income	30			—			30			—
Unrealized gains and losses on hedging instruments:
Unrealized losses on hedging instruments (net of tax benefit of $12, $0, $12 and $0)	(38		)	—			(38		)	—
Reclassification adjustment for losses included in net income (net of tax benefit of $1, $1, $3 and $3)	2			2			7			6
Pension and other postretirement benefit liability adjustments:
Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision (benefit) of $2, $0, ($2) and $1)	2			—			(9		)	3
Amortization of net loss included in net periodic pension cost (net of tax benefit of $0, $0, $2 and $3)	3			2			8			10
Total other comprehensive items	(92		)	(28		)	(224		)	(428		)
Comprehensive Income	$	668		$	681		$	2,470		$	1,612

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

5

THERMO FISHER SCIENTIFIC INC.

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Operating Activities
Net income	$	2,694		$	2,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	416			393
Amortization of acquisition-related intangible assets	1,285			1,316
Change in deferred income taxes	(356		)	(317		)
Gain on sales of businesses	(486		)	—
Non-cash stock-based compensation	138			137
Other non-cash expenses, net	123			77
Changes in assets and liabilities, excluding the effects of acquisitions and disposition:
Accounts receivable	(321		)	(64		)
Inventories	(449		)	(333		)
Other assets	(186		)	(185		)
Accounts payable	70			(45		)
Other liabilities	172			(199		)
Contributions to retirement plans	(40		)	(78		)
Net cash provided by operating activities	3,060			2,742
Investing Activities
Acquisitions, net of cash acquired	(1,687		)	(59		)
Proceeds from sale of business, net of cash divested	1,128			—
Purchase of property, plant and equipment	(637		)	(474		)
Proceeds from sale of property, plant and equipment	18			6
Other investing activities, net	30			(5		)
Net cash used in investing activities	(1,148		)	(532		)
Financing Activities
Net proceeds from issuance of debt	—			690
Repayment of debt	(1,702		)	(2,048		)
Proceeds from issuance of commercial paper	2,581			3,378
Repayments of commercial paper	(2,578		)	(3,842		)
Purchases of company common stock	(750		)	(250		)
Dividends paid	(221		)	(198		)
Net proceeds from issuance of company common stock under employee stock plans	115			97
Other financing activities	(49		)	(51		)
Net cash used in financing activities	(2,604		)	(2,224		)
Exchange Rate Effect on Cash	(120		)	(236		)
Decrease in Cash, Cash Equivalents and Restricted Cash	(812		)	(250		)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	2,117			1,361
Cash, Cash Equivalents and Restricted Cash at End of Period	$	1,305		$	1,111

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

6

THERMO FISHER SCIENTIFIC INC.

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY

(Unaudited)

	Common Stock			Capital in Excess of Par Value		Retained Earnings			Treasury Stock				Accumulated Other Comprehensive Items			Total Shareholders' Equity
(In millions)	Shares	Amount							Shares	Amount
	Three Months Ended September 28, 2019
Balance at June 29, 2019	433	$	433	$	14,887	$	20,482		33	$	(4,443	)	$	(2,630	)	$	28,729
Issuance of shares under employees' and directors' stock plans	1	1		35		—			—	(43		)	—			(7		)
Stock-based compensation	—	—		42		—			—	—			—			42
Dividends declared ($0.19 per share)	—	—		—		(77		)	—	—			—			(77		)
Net income	—	—		—		760			—	—			—			760
Other comprehensive items	—	—		—		—			—	—			(92		)	(92		)
Balance at September 28, 2019	434	$	434	$	14,964	$	21,165		33	$	(4,486	)	$	(2,722	)	$	29,355
	Three Months Ended September 29, 2018
Balance at June 30, 2018	430	$	430	$	14,408	$	17,226		27	$	(3,128	)	$	(2,491	)	$	26,445
Issuance of shares under employees' and directors' stock plans	1	1		72		—			—	(36		)	—			37
Stock-based compensation	—	—		46		—			—	—			—			46
Purchases of company common stock	—	—		—		—			1	(250		)	—			(250		)
Dividends declared ($0.17 per share)	—	—		—		(69		)	—	—			—			(69		)
Net income	—	—		—		709			—	—			—			709
Other comprehensive items	—	—		—		—			—	—			(28		)	(28		)
Balance at September 29, 2018	431	$	431	$	14,526	$	17,866		28	$	(3,414	)	$	(2,519	)	$	26,890
	Nine Months Ended September 28, 2019
Balance at December 31, 2018	432	$	432	$	14,621	$	18,696		29	$	(3,665	)	$	(2,498	)	$	27,586
Cumulative effect of accounting change	—	—		—		4			—	—			—			4
Issuance of shares under employees' and directors' stock plans	2	2		205		—			1	(71		)	—			136
Stock-based compensation	—	—		138		—			—	—			—			138
Purchases of company common stock	—	—		—		—			3	(750		)	—			(750		)
Dividends declared ($0.57 per share)	—	—		—		(229		)	—	—			—			(229		)
Net income	—	—		—		2,694			—	—			—			2,694
Other comprehensive items	—	—		—		—			—	—			(224		)	(224		)
Balance at September 28, 2019	434	$	434	$	14,964	$	21,165		33	$	(4,486	)	$	(2,722	)	$	29,355
	Nine Months Ended September 29, 2018
Balance at December 31, 2017	428	$	428	$	14,177	$	15,914		27	$	(3,103	)	$	(2,003	)	$	25,413
Cumulative effect of accounting changes	—	—		—		118			—	—			(88		)	30
Issuance of shares under employees' and directors' stock plans	3	3		185		—			—	(61		)	—			127
Stock-based compensation	—	—		137		—			—	—			—			137
Purchases of company common stock	—	—		—		—			1	(250		)	—			(250		)
Dividends declared ($0.51 per share)	—	—		—		(206		)	—	—			—			(206		)
Net income	—	—		—		2,040			—	—			—			2,040
Other comprehensive items	—	—		—		—			—	—			(428		)	(428		)
Other	—	—		27		—			—	—			—			27
Balance at September 29, 2018	431	$	431	$	14,526	$	17,866		28	$	(3,414	)	$	(2,519	)	$	26,890

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

7

THERMO FISHER SCIENTIFIC INC.

NOTES TO 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, improve patient diagnostics, deliver medicines to market and increase laboratory productivity. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics.

Interim Financial Statements

The interim 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 September 28, 2019, the results of operations for the three- and nine-month periods ended September 28, 2019 and September 29, 2018, and the cash flows for the nine-month periods ended September 28, 2019 and September 29, 2018. Interim results are not necessarily indicative of results for a full year.

The consolidated balance sheet presented as of December 31, 2018, 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 information that is included in the annual financial statements and notes thereto of the company. The consolidated financial statements and notes included in this report should be read in conjunction with the 2018 financial statements and notes included in the company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC).

Note 1 to the consolidated financial statements for 2018 describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. Except for the accounting for leases, as noted below, there have been no material changes in the company’s significant accounting policies during the nine months ended September 28, 2019.

Leases

The company determines whether an arrangement is, or contains, a lease at inception. Prior to 2019, the company generally accounted for operating lease payments by charging them to expense as incurred. Beginning in 2019, operating leases that have commenced are included in other assets, other accrued expenses and other long-term liabilities in the consolidated balance sheet. Classification of operating lease liabilities as either current or noncurrent is based on the expected timing of payments due under the company’s obligations.

Right-of-use (ROU) assets represent the company’s right to use an underlying asset for the lease term and lease liabilities represent the company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The company recognizes lease expense for these leases on a straight-line basis over the lease term.

Because most of the company’s leases do not provide an implicit rate, the company estimates incremental borrowing rates based on the information available at the commencement date in determining the present value of lease payments. The company uses the implicit rate when readily determinable. Lease terms may include the effect of options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.

As a lessee, the company accounts for the lease and non-lease components as a single lease component.

See Note 9 additional information about the company's leases.

Contract-related Balances

Current contract assets and noncurrent contract assets are included within other current assets and other assets, respectively, in the accompanying balance sheet. Noncurrent contract liabilities are included within other long-term liabilities in the accompanying balance sheet. Contract asset and liability balances are as follows:

8

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	September 28,		December 31,
(In millions)	2019		2018
Current Contract Assets, Net	$	609	$	459
Noncurrent Contract Assets, Net	14		15
Current Contract Liabilities	943		809
Noncurrent Contract Liabilities	562		355

In the first nine months of 2019, the company recognized revenue of $654 million that was included in the contract liabilities balance at December 31, 2018. Contract assets increased in the first nine months of 2019 due to the timing of billing. Contract liabilities increased during the first nine months of 2019 primarily due to an advance payment from a customer and an acquisition.

Warranty Obligations

The liability for warranties is included in other accrued expenses in the accompanying balance sheet. The changes in the carrying amount of standard product warranty obligations are as follows:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Beginning Balance	$	92		$	87
Provision charged to income	80			89
Usage	(83		)	(80		)
Adjustments to previously provided warranties, net	(1		)	(3		)
Currency translation	(2		)	(2		)
Ending Balance	$	86		$	91

Inventories

The components of inventories are as follows:

	September 28,		December 31,
(In millions)	2019		2018
Raw Materials	$	943	$	812
Work in Process	514		430
Finished Goods	1,851		1,763
Inventories	$	3,308	$	3,005

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. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In August 2018, the FASB issued new guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The company expects to adopt the guidance when it is effective in 2020 using a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In August 2018, the FASB issued new guidance to modify the disclosure requirements on fair value measurements. The company expects to adopt the guidance when it is effective in 2020 with some items requiring a prospective method and others

9

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

requiring a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In June 2016, the FASB issued new guidance to require a financial asset measured at amortized cost basis, such as accounts receivable, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. During 2018 and 2019, the FASB issued additional guidance and clarification. The company expects to adopt the guidance when it is effective in 2020 using a modified retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements.

In February 2016, the FASB issued new guidance which requires lessees to record most leases on their balance sheets as lease liabilities, initially measured at the present value of the future lease payments, with corresponding right-of-use assets. The new guidance also sets forth new disclosure requirements related to leases. During 2017 - 2019, the FASB issued additional guidance and clarification. The guidance became effective for the company in 2019. The company has elected to adopt the guidance using a modified retrospective method, by applying the transition approach as of the beginning of the period of adoption. Comparative periods have not been restated. As permitted upon transition, the company did not reassess whether any expired or existing contracts were or contained embedded leases, the lease classification for any expired or existing leases, initial direct costs for any leases, or whether land easements met the definition of a lease if they were not accounted for as leases under the prior guidance. Adoption of the new guidance impacted the company’s Consolidated Balance Sheet as follows:

(In millions)	December 31, 2018 as Reported		Impact of Adopting New Lease Guidance		January 1, 2019 As Adopted
Other Assets	$	1,117	$	641	$	1,758
Other Accrued Expenses	1,470		132		1,602
Other Long-term Liabilities	2,515		505		3,020
Retained Earnings	18,696		4		18,700

Note 2. Acquisitions and Dispositions

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. 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 use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

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. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

On April 30, 2019, the company acquired, within the Laboratory Products and Services segment, Brammer Bio for approximately $1.67 billion in cash. Brammer Bio is a leading viral vector contract development and manufacturing organization for gene and cell therapies. The acquisition expands the segment's contract manufacturing capabilities. Revenues of Brammer Bio were approximately $140 million in 2018. The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $938 million was allocated to goodwill, $405 million of which is tax deductible.

In addition, in the nine months ended September 28, 2019 the company acquired, within the Analytical Instruments segment, a Slovakia-based provider of mass spectrometry software used for identification of compounds, for an aggregate purchase price of $14 million.

10

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The components of the purchase price and net assets acquired for Brammer Bio are as follows:

(In millions)	Brammer Bio
Purchase Price
Cash paid	$	1,710
Cash acquired	(36		)
	$	1,674
Net Assets Acquired
Current assets	$	52
Property, plant and equipment	147
Definite-lived intangible assets:
Customer relationships	744
Product technology	65
Tradenames	7
Goodwill	938
Other assets	49
Contract liabilities	(109		)
Deferred tax liabilities	(111		)
Other liabilities assumed	(108		)
	$	1,674

The weighted-average amortization periods for definite-lived intangible assets acquired in 2019 are 14 years for customer relationships, 13 years for product technology and 2 years for tradenames. The weighted average amortization period for all definite-lived intangible assets acquired in 2019 is 14 years.

Disposition

On June 28, 2019, the company sold its Anatomical Pathology business to PHC Holdings Corporation for $1.13 billion, net of cash divested. The business was part of the Specialty Diagnostics segment. The sale of this business resulted in a pre-tax gain of approximately $482 million, included in restructuring and other (income) costs, net. Revenues in 2019, through the date of sale, and the full year 2018 of the business sold were approximately $115 million and $238 million, respectively, net of retained sales through the company's healthcare market and research and safety market channel businesses. The assets and liabilities of the Anatomical Pathology business were as follows on December 31, 2018:

(In millions)	December 31, 2018
Current Assets	$	81
Long-term Assets	528
Current Liabilities	34
Long-term Liabilities	24

11

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 3. Revenue

Disaggregated Revenue

Revenue by type is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues
Consumables	3,228		3,056		$	9,726	9,345
Instruments	1,570		1,515		4,619		4,462
Services	1,474		1,349		4,368		4,044
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (a)
North America	$	3,220	$	3,030	$	9,509	$	8,975
Europe	1,514		1,454		4,569		4,521
Asia-Pacific	1,349		1,251		4,080		3,809
Other regions	189		185		555		546
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(a) Revenues are attributed to regions based on customer location.

Each reportable segment earns revenues from consumables, instruments and services in North America, Europe, Asia-Pacific and other regions. See Note 4 for revenue 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 September 28, 2019 was $6.76 billion. The company will recognize revenue for these performance obligations as they are satisfied, approximately 70% of which is expected to occur within the next twelve months.

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(Unaudited)

Note 4. Business Segment and Geographical Information

The company’s management evaluates segment operating performance based on operating income before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition accounting; restructuring and other costs/income including costs arising from facility consolidations such as severance and abandoned lease expense and gains and losses from the sale of real estate and product lines as well as from significant litigation-related matters; and amortization of acquisition-related intangible assets. The company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitates comparison of performance for determining compensation.

Business Segment Information

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Revenues
Life Sciences Solutions	$	1,701		$	1,504		$	5,018		$	4,572
Analytical Instruments	1,358			1,333			4,004			3,901
Specialty Diagnostics	879			894			2,779			2,773
Laboratory Products and Services	2,619			2,470			7,765			7,433
Eliminations	(285		)	(281		)	(853		)	(828		)
Consolidated revenues	6,272			5,920			18,713			17,851
Segment Income (a)
Life Sciences Solutions	586			495			1,756			1,534
Analytical Instruments	311			294			879			831
Specialty Diagnostics	223			223			707			719
Laboratory Products and Services	303			299			933			916
Subtotal reportable segments (a)	1,423			1,311			4,275			4,000
Cost of revenues (charges) credits, net	(5		)	1			(16		)	(7		)
Selling, general and administrative (charges) credits, net	(7		)	4			(54		)	(7		)
Restructuring and other (costs) income, net	(31		)	27			442			(35		)
Amortization of acquisition-related intangible assets	(434		)	(431		)	(1,285		)	(1,316		)
Consolidated operating income	946			912			3,362			2,635
Other expense, net (b)	(124		)	(102		)	(330		)	(385		)
Income before income taxes	$	822		$	810		$	3,032		$	2,250

(a) Represents operating income before certain charges to cost of revenues and selling, general and administrative expenses; restructuring and other costs/income, net; and amortization of acquisition-related intangibles.

(b) The company does not allocate other expense, net to its segments.

13

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(Unaudited)

Geographical Information

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (c)
United States	$	3,096	$	2,918	$	9,117	$	8,588
China	694		629		2,072		1,818
Other	2,482		2,373		7,524		7,445
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(c) Revenues are attributed to countries based on customer location.

Note 5. Other Expense, Net

The components of other expense, net, in the accompanying statement of income are as follows:

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Interest Income	$	52		$	41		$	179		$	92
Interest Expense	(164		)	(162		)	(534		)	(495		)
Other Items, Net	(12		)	19			25			18
Other Expense, Net	$	(124	)	$	(102	)	$	(330	)	$	(385	)

Other Items, Net

In all periods, other items, net includes currency transaction gains and losses on monetary assets and liabilities and net periodic pension benefit cost/income, excluding the service cost component which is included in operating expenses on the accompanying statement of income.

In 2019, other items, net in the above table includes $42 million of losses on the early extinguishment of debt (see Note 8). As discussed in Note 15, the company incurred additional losses on the early extinguishment of debt in the fourth quarter of 2019.

14

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 6. Income Taxes

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Statutory Federal Income Tax Rate	21		%	21		%
Provision for Income Taxes at Statutory Rate	$	637		$	473
Increases (Decreases) Resulting From:
Foreign rate differential	(172		)	(177		)
Foreign exchange loss on inter-company debt refinancing	(62		)	—
Income tax credits	(242		)	(183		)
Global intangible low-taxed income	160			124
Foreign-derived intangible income	(68		)	(34		)
Withholding taxes	30			—
Singapore tax holiday	(20		)	(29		)
Transition tax and other impacts of U.S. tax reform	8			117
Provision for (reversal of) tax reserves, net	16			(49		)
Excess tax benefits from stock options and restricted stock units	(68		)	(59		)
Basis difference on disposal of business	72			—
Other, net	47			27
Provision for income taxes	$	338		$	210

The company has operations and a taxable presence in approximately 50 countries outside the U.S. Some of these countries have lower tax rates than the U.S. The company’s ability to obtain a benefit from lower tax rates outside the U.S. is dependent on its relative levels of income in countries outside the U.S. and on the statutory tax rates in those countries.

In 2019, the company recorded a $62 million income tax benefit related to a foreign exchange loss for tax purposes on certain intercompany financing arrangements as well as a tax provision of $191 million related to the gain on sale of the Anatomical Pathology business. In addition, the company implemented foreign tax credit planning in Sweden which resulted in $75 million of foreign tax credits, with no related incremental U.S. income tax expense.

During 2019, the company recorded a net tax provision of $1 million to adjust the impacts of U.S. tax reform based on final regulations issued by the U.S. Treasury in 2019. The income tax provision consists of an incremental charge of $8 million offset by a $7 million reduction of related unrecognized tax benefits.

The company has significant operations in Singapore and has received considerable tax incentives. The local taxing authority granted the company pioneer company status which provides an incentive encouraging companies to undertake activities that have the effect of promoting economic or technological development in Singapore. This incentive equates to a tax exemption on earnings associated with most of the company’s manufacturing activities in Singapore and continues through December 31, 2026. In 2019 and 2018, the impact of this tax holiday decreased the annual effective tax rates by 0.6 percentage points and 1.3 percentage points, respectively, and increased diluted earnings per share by approximately $0.05 and $0.07, respectively.

Unrecognized Tax Benefits

As of September 28, 2019, the company had $1.47 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

15

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

(In millions)	2019
Balance at Beginning of Year	$	1,442
Additions for tax positions of current year	6
Additions for tax positions of prior years	35
Reductions for tax positions of prior years	(7		)
Settlements	(5		)
Balance at End of Period	$	1,471

Note 7. Earnings per Share

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions except per share amounts)	2019		2018		2019		2018
Net Income	$	760	$	709	$	2,694	$	2,040
Basic Weighted Average Shares	401		402		400		402
Plus Effect of:
Stock options and restricted units	3		4		3		4
Diluted Weighted Average Shares	404		406		403		406
Basic Earnings per Share	$	1.89	$	1.76	$	6.73	$	5.07
Diluted Earnings per Share	$	1.88	$	1.75	$	6.68	$	5.03
Antidilutive Stock Options Excluded from Diluted Weighted Average Shares	1		2		1		2

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 8. Debt and Other Financing Arrangements

	Effective Interest Rate at September 28,		September 28,			December 31,
(Dollars in millions)	2019		2019			2018
Commercial Paper	0.84	%	$	683		$	693
Floating Rate 2-Year Senior Notes, Due 7/24/2019 (euro-denominated)			—			574
6.00% 10-Year Senior Notes, Due 3/1/2020	2.99	%	750			750
4.70% 10-Year Senior Notes, Due 5/1/2020			—			300
Floating Rate 2-Year Senior Notes, Due 8/7/2020 (euro-denominated)	0.16	%	656			688
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	1.62	%	465			487
5.00% 10-Year Senior Notes, Due 1/15/2021	3.25	%	400			400
4.50% 10-Year Senior Notes, Due 3/1/2021	5.66	%	1,000			1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	5.19	%	1,100			1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	3.42	%	800			800
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)	2.27	%	547			574
3.15% 10-Year Senior Notes, Due 1/15/2023			—			800
3.00% 7-Year Senior Notes, Due 4/15/2023	5.29	%	1,000			1,000
4.15% 10-Year Senior Notes, Due 2/1/2024	4.16	%	1,000			1,000
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)	0.93	%	1,094			1,147
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)	2.09	%	700			734
3.65% 10-Year Senior Notes, Due 12/15/2025	3.77	%	350			350
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)	1.53	%	766			802
2.95% 10-Year Senior Notes, Due 9/19/2026	3.19	%	1,200			1,200
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)	1.65	%	547			574
3.20% 10-Year Senior Notes, Due 8/15/2027	3.39	%	750			750
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)	1.46	%	656			688
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)	2.08	%	766			802
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)	2.94	%	766			802
5.30% 30-Year Senior Notes, Due 2/1/2044	5.37	%	400			400
4.10% 30-Year Senior Notes, Due 8/15/2047	4.23	%	750			750
Other			20			21
Total Borrowings at Par Value			17,166			19,186
Fair Value Hedge Accounting Adjustments			(10		)	(93		)
Unamortized Discount, Net			(34		)	(21		)
Unamortized Debt Issuance Costs			(69		)	(82		)
Total Borrowings at Carrying Value			17,053			18,990
Less: Short-term Obligations and Current Maturities			661			1,271
Long-term Obligations			$	16,392		$	17,719

The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discount or amortization of any premium, the amortization of any debt issuance costs and, if applicable, adjustments related to hedging.

See Note 12 for fair value information pertaining to the company’s long-term obligations.

As discussed in Note 15, early in the fourth quarter of 2019, the company issued new long-term senior notes and is using the proceeds to redeem the outstanding commercial paper, the 6.00% Senior Notes due 2020, the 1.5% Senior Notes due 2020, the 5.00% Senior Notes due 2021, the 4.50% Senior Notes due 2021, the 3.60% Senior Notes due 2021 and the 3.30% Senior Notes due 2022 included in the table above. Accordingly, all of this debt has been reported as long-term at September 28, 2019.

17

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(Unaudited)

Credit Facilities

The company has a revolving credit facility with a bank group that provides for up to $2.50 billion of unsecured multi-currency revolving credit. The facility expires in July 2021. The agreement calls for interest at either a LIBOR-based rate, a EURIBOR-based rate (for funds drawn in euro) or a rate based on the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The covenants in our revolving credit facility (the Facility) include a Consolidated Leverage Ratio (total debt-to-Consolidated EBITDA) and a Consolidated Interest Coverage Ratio (Consolidated EBITDA to Consolidated Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a maximum Consolidated Leverage Ratio of 3.5:1.0. The company has also agreed that so long as any lender has any commitment under the Facility or any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.0:1.0 as of the last day of any fiscal quarter. As of September 28, 2019, no borrowings were outstanding under the Facility, although available capacity was reduced by approximately $80 million as a result of outstanding letters of credit.

Commercial Paper Programs

The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of September 28, 2019, outstanding borrowings under these programs were $683 million with a weighted average remaining period to maturity of 41 days.

Senior Notes

Interest on the floating rate senior notes is payable quarterly. Interest is payable annually on the other euro-denominated senior notes and semi-annually on all other senior notes. Each of the notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which limits the ability of the company to pledge principal properties as security under borrowing arrangements.

In September 2019, the company redeemed its 4.70% Senior Notes due 2020 and its 3.15% Senior Notes due 2023. In connection with these redemptions, the company incurred $42 million of losses on the early extinguishment of debt included in Other Expense, Net on the accompanying statement of income.

In 2018, Thermo Fisher Scientific (Finance I) B.V., a wholly-owned finance subsidiary of the company, issued the Floating Rate Senior Notes due 2020 included in the table above. This subsidiary has no independent function other than financing activities. The Floating Rate Senior Notes due 2020 are fully and unconditionally guaranteed by the company and no other subsidiaries of the company have guaranteed the obligations.

Interest Rate Swap Arrangements and related Cross-currency Interest Rate Swap Arrangements

The company has entered into LIBOR-based interest rate swap arrangements with various banks on several of its outstanding senior notes. The aggregate amounts of the swaps are equal to the principal amounts of the notes and the payment dates of the swaps coincide with the interest payment dates of the notes. The swap contracts provide for the company to pay a variable interest rate and receive a fixed rate. The variable interest rates reset monthly. The swaps have been accounted for as fair value hedges of the notes. See Note 12 for additional information on the interest rate swap arrangements and related cross-currency interest rate swap arrangements. The following table summarizes the outstanding interest rate swap arrangements on the company's senior notes at September 28, 2019:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	Aggregate Notional Amount		Pay Rate as of
(Dollars in millions)		Pay Rate	September 28, 2019		Receive Rate
4.50% Senior Notes due 2021 (a)	1,000	1-month LIBOR + 3.4420%	5.5310	%	4.50	%
3.60% Senior Notes due 2021 (a)	1,100	1-month LIBOR + 2.5150%	4.5425	%	3.60	%
3.00% Senior Notes due 2023 (a)	1,000	1-month LIBOR + 1.7640%	3.7915	%	3.00	%

(a) The payments on $1.8 billion notional value of these interest rate swaps are offset in part by cross-currency interest rate swaps which effectively reduced the pay rate as of September 28, 2019 from a weighted average of 4.50% to a weighted average of 1.78%.

The company has entered into $1.8 billion notional value of cross-currency interest rate swaps, which effectively convert a portion of the semi-annual payments related to the variable rate, U.S. dollar denominated, LIBOR-based interest rate swaps to payments on variable rate, euro denominated, EURIBOR-based cross-currency interest rate swaps.

As discussed above and in Note 15, early in the fourth quarter of 2019, the company redeemed its 4.50% Senior Notes due 2021 and its 3.60% Senior Notes due 2021 and settled the related interest rate and cross-currency interest rate swaps.

Note 9. Leases

As a lessee, the company leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally for 1 to 10 years) or have options to terminate the arrangement within 1 year. The company’s finance leases are not material.

The company has guaranteed the residual value of three leased operating facilities with lease terms ending in 2020, 2023 and 2024. The company has agreed with the lessor to comply with certain financial covenants consistent with its other debt arrangements (Note 8). The aggregate maximum guarantee under these three lease arrangements is $147 million. Operating lease ROU assets and lease liabilities for these lease arrangements are recorded on the consolidated balance sheet as of September 28, 2019, but exclude any amounts for residual value guarantees.

As a lessee, the consolidated statement of income includes pre-tax operating lease costs of $51 million and $149 million and pre-tax variable lease costs of $10 million and $31 million for the three and nine months ended September 28, 2019, respectively. Lease costs arising from finance leases, short-term leases, and sublease income are not material.

Cash used in operating activities for payments of amounts included in the measurement of operating lease liabilities was $149 million in the nine months ended September 28, 2019. Operating lease ROU assets of $108 million were obtained in exchange for new operating lease liabilities in the nine months ended September 28, 2019.

The weighted-average remaining operating lease term was 6.3 years and the weighted average discount rate was 4.0% as of September 28, 2019.

ROU assets of $645 million as of September 28, 2019, are classified in other assets in the consolidated balance sheet. Operating lease liabilities of $158 million and $529 million as of September 28, 2019, are classified in other accrued expenses and other long-term liabilities, respectively, in the consolidated balance sheet.

As of September 28, 2019, future payments of operating lease liabilities are as follows:

19

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

(In millions)
Remainder of 2019	$	51
2020	180
2021	138
2022	106
2023	76
2024	55
2025 and Thereafter	175
Total Lease Payments	781
Less: Imputed Interest	94
Total Operating Lease Liability	$	687

As a lessor, operating leases, sales-type leases and direct financing leases are not material.

As previously disclosed in the company's 2018 Annual Report on Form 10-K and under previous lease accounting guidance, the following is a summary of annual future minimum lease and rental commitments under noncancelable operating leases as of December 31, 2018:

(In millions)
2019	$	192
2020	158
2021	118
2022	86
2023	58
2024 and Thereafter	177
	$	789

Note 10. Commitments and Contingencies

Environmental Matters

The company is currently involved in various stages of investigation and remediation related to environmental matters. The company cannot predict all potential costs related to environmental remediation matters and the possible impact on future operations given the uncertainties regarding the extent of the required cleanup, the complexity and interpretation of applicable laws and regulations, the varying costs of alternative cleanup methods and the extent of the company’s responsibility. Expenses for environmental remediation matters related to the costs of installing, operating and maintaining groundwater-treatment systems and other remedial activities related to historical environmental contamination at the company’s domestic and international facilities were not material in any period presented. The company records accruals for environmental remediation liabilities, based on current interpretations of environmental laws and regulations, when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The company calculates estimates based upon several factors, including reports prepared by environmental specialists and management’s knowledge of and experience with these environmental matters. The company includes in these estimates potential costs for investigation, remediation and operation and maintenance of cleanup sites. At September 28, 2019, the company’s total environmental liability was approximately $63 million. While management believes the accruals for environmental remediation are adequate based on current estimates of remediation costs, the company may be subject to additional remedial or compliance costs due to future events such as changes in existing laws and regulations, changes in agency direction or enforcement policies, developments in remediation technologies or changes in the conduct of the company’s operations, which could have a material adverse effect on the company’s financial position, results of operations or cash flows.

20

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Litigation and Related Contingencies

There are various lawsuits and claims pending against the company including matters involving product liability, intellectual property, employment and commercial issues. The company determines the probability and range of possible loss based on the current status of each of these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The company establishes a liability that is an estimate of amounts expected to be paid in the future for events that have already occurred. The company accrues the most likely amount or at least the minimum of the range of probable loss when a range of probable loss can be estimated. The accrued liabilities are based on management’s judgment as to the probability of losses for asserted and unasserted claims and, where applicable, actuarially determined estimates. Accrual estimates are adjusted as additional information becomes known or payments are made. The amount of ultimate loss may differ from these estimates. Due to the inherent uncertainties associated with pending litigation or claims, the company cannot predict the outcome, nor, with respect to certain pending litigation or claims where no liability has been accrued, make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. The company has no material accruals for pending litigation or claims for which accrual amounts are not disclosed below or in the company's 2018 financial statements and notes included in the company's Annual Report on Form 10-K filed with the SEC, nor are material losses deemed probable for such matters. It is reasonably possible, however, that an unfavorable outcome that exceeds the company’s current accrual estimate, if any, for one or more of the matters described below could have a material adverse effect on the company’s results of operations, financial position and cash flows.

Product Liability, Workers Compensation and Other Personal Injury Matters

For product liability, workers compensation and other personal injury matters, the company accrues the most likely amount or at least the minimum of the range of possible loss when a range of possible loss can be estimated. The company records estimated amounts due from insurers related to certain product liabilities as an asset. Although the company believes that the amounts accrued and estimated recoveries are probable and appropriate based on available information, including actuarial studies of loss estimates, the process of estimating losses and insurance recoveries involves a considerable degree of judgment by management and the ultimate amounts could vary materially. Insurance contracts do not relieve the company of its primary obligation with respect to any losses incurred. The collectability of amounts due from its insurers is subject to the solvency and willingness of the insurer to pay, as well as the legal sufficiency of the insurance claims. Management monitors the payment history as well as the financial condition and ratings of its insurers on an ongoing basis.

Intellectual Property Matters

On June 3, 2013, Unisone Strategic IP filed a complaint against Life Technologies in the United States District Court for the Southern District of California alleging patent infringement by Life Technologies’ supply chain management system software, which operates with product "supply centers" installed at customer sites. Plaintiff seeks damages for alleged willful infringement, attorneys’ fees, costs, and injunctive relief. On August 24, 2017, Unisone filed an appeal from a decision by the Patent Trial and Appeal Board (PTAB) that found the challenged patent claims invalid. The United States Court of Appeals for the Federal Circuit upheld the PTAB’s ruling finding the challenged claims in the Unisone patent invalid. Unisone had until March 11, 2019 to file an appeal with the United States Supreme Court. Unisone did not appeal that decision, and consequently the case before the United States District Court, which had been stayed pending the outcome of the PTAB decision, has resumed with respect to similar Unisone patent claims that were not included in the PTAB proceeding.

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(Unaudited)

Note 11. Comprehensive Income

Comprehensive income combines net income and other comprehensive items. Other comprehensive items represent certain amounts that are reported as components of shareholders’ equity in the accompanying balance sheet.

Changes in each component of accumulated other comprehensive items, net of tax, are as follows: 

(In millions)	Currency Translation Adjustment			Unrealized Losses on Hedging Instruments			Pension and Other Postretirement Benefit Liability Adjustment			Total
Balance at December 31, 2018	$	(2,243	)	$	(52	)	$	(203	)	$	(2,498	)
Other comprehensive items before reclassifications	(222		)	(38		)	(9		)	(269		)
Amounts reclassified from accumulated other comprehensive items	30			7			8			45
Net other comprehensive items	(192		)	(31		)	(1		)	(224		)
Balance at September 28, 2019	$	(2,435	)	$	(83	)	$	(204	)	$	(2,722	)

Note 12. Fair Value Measurements and Fair Value of Financial Instruments

Fair Value Measurements

The company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2019. The company’s financial assets and liabilities carried at fair value are primarily comprised of insurance contracts, investments in money market funds, derivative contracts, mutual funds holding publicly traded securities and other investments in unit trusts held as assets to satisfy outstanding deferred compensation and retirement liabilities; and acquisition-related contingent consideration.

The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities that the company has the ability to access.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves.

Level 3: Inputs are unobservable data points that are not corroborated by market data.

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018:

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	September 28,		Quoted Prices in Active Markets		Significant Other Observable  Inputs		Significant Unobservable Inputs
(In millions)	2019		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	166	$	166	$	—	$	—
Investments in common stock, mutual funds and other similar instruments	19		19		—		—
Warrants	6		—		6		—
Insurance contracts	130		—		130		—
Derivative contracts	114		—		114		—
Total Assets	$	435	$	185	$	250	$	—
Liabilities
Derivative contracts	$	44	$	—	$	44	$	—
Contingent consideration	55		—		—		55
Total Liabilities	$	99	$	—	$	44	$	55

	December 31,		Quoted Prices in  Active Markets		Significant Other Observable  Inputs		Significant  Unobservable  Inputs
(In millions)	2018		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	769	$	769	$	—	$	—
Bank time deposits	2		2		—		—
Investments in mutual funds and other similar instruments	10		10		—		—
Warrants	8		—		8		—
Insurance contracts	113		—		113		—
Derivative contracts	31		—		31		—
Total Assets	$	933	$	781	$	152	$	—
Liabilities
Derivative contracts	$	145	$	—	$	145	$	—
Contingent consideration	37		—		—		37
Total Liabilities	$	182	$	—	$	145	$	37

The company uses the Black-Scholes model to value its warrants. The company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer. The fair value of derivative contracts is the estimated amount that the company would receive/pay upon liquidation of the contracts, taking into account the change in interest rates and currency exchange rates. The company determines the fair value of acquisition-related contingent consideration based on the probability-weighted discounted cash flows associated with such future payments. Changes to the fair value of contingent consideration are recorded in selling, general and administrative expense. The following table provides a rollforward of the fair value, as determined by level 3 inputs, of the contingent consideration.

23

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Contingent Consideration
Beginning Balance	$	58		$	40		$	37		$	35
Acquisitions (including assumed balances)	—			—			24			11
Payments	(3		)	(3		)	(3		)	(8		)
Change in fair value included in earnings	—			(3		)	(3		)	(4		)
Ending Balance	$	55		$	34		$	55		$	34

Derivative Contracts

The following table provides the aggregate notional value of outstanding derivative contracts.

	September 28,		December 31,
(In millions)	2019		2018
Notional Amount
Interest rate swaps (described in Note 8)	$	3,100	$	3,100
Cross-currency interest rate swaps - designated as net investment hedges	1,800		1,500
Currency exchange contracts	5,693		3,424

As discussed in Note 15, early in the fourth quarter of 2019, the company settled certain of its interest rate swaps and cross-currency interest rate swaps upon the redemption of the related debt securities.

While certain derivatives are subject to netting arrangements with counterparties, the company does not offset derivative assets and liabilities within the consolidated balance sheet. The following tables present the fair value of derivative instruments in the consolidated balance sheet and statement of income.

	Fair Value – Assets				Fair Value – Liabilities
	September 28,		December 31,		September 28,		December 31,
(In millions)	2019		2018		2019		2018
Derivatives Designated as Hedging Instruments
Interest rate swaps (a)	$	—	$	—	$	31	$	129
Cross-currency interest rate swaps (b)	107		28		—		—
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts (c)	7		3		13		16
Total Derivatives	$	114	$	31	$	44	$	145

(a) The fair value of the interest rate swaps is included in the consolidated balance sheet under the caption other long-term liabilities.

(b) The fair value of the cross-currency interest rate swaps is included in the consolidated balance sheet under the caption other assets.

(c) The fair value of the currency exchange contracts is included in the consolidated balance sheet under the captions other current assets or other accrued expenses.

24

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

The following amounts related to cumulative basis adjustments for fair value hedges were included in the consolidated balance sheet under the caption long-term obligations:

	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability (d)
	September 28,		December 31,		September 28,			December 31,
(In millions)	2019		2018		2019			2018
Long-term Obligations	$	3,078	$	3,291	$	(10	)	$	(93	)

(d) Includes increases in the carrying amount of $20 million and $30 million at September 28, 2019 and December 31, 2018, respectively, on discontinued hedging relationships.

	Gain (Loss) Recognized
	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Fair Value Hedging Relationships
Interest rate swaps
Hedged long-term obligations - included in other expense, net	$	(14	)	$	8		$	(95	)	$	60
Derivatives designated as hedging instruments - included in other expense, net	15			(8		)	98			(57		)
Derivatives Designated as Cash Flow Hedges
Interest rate swaps
Included in unrealized losses on hedging instruments within other comprehensive items	(50		)	—			(50		)	—
Amount reclassified from accumulated other comprehensive items to other expense, net	(3		)	(3		)	(10		)	(9		)
Financial Instruments Designated as Net Investment Hedges
Foreign currency-denominated debt
Included in currency translation adjustment within other comprehensive items	261			50			320			250
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive items	72			5			79			8
Included in other expense, net	13			9			41			12
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts
Included in cost of product revenues	1			1			—			1
Included in other expense, net	43			(2		)	49			25

Gains and losses recognized on currency exchange contracts and the interest rate swaps designated as fair value hedges are included in the consolidated statement of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.

The company also uses foreign currency-denominated debt and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates. The majority of the company’s euro-denominated senior notes and cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and contract fair value changes on the cross-currency interest rate swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.

25

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

See Note 1 to the consolidated financial statements for 2018 included in the company's Annual Report on Form 10-K and Note 8 herein for additional information on the company's risk management objectives and strategies.

Cash Flow Hedge Arrangements

In September 2019, the company entered into interest rate swap arrangements to mitigate the risk of interest rates rising prior to completion of debt offerings. Based on the company's conclusion that the debt offerings were probable, the swaps hedged the cash flow risk for each of the interest payments on €1.80 billion plus $900 million aggregate principal amounts of the planned fixed-rate debt issues. The hedges were terminated in the third quarter of 2019, in connection with the early fourth quarter debt offerings (Note 15). The aggregate fair value of the hedges at that time, $38 million, net of tax, has been classified as a reduction to accumulated other comprehensive items and will be amortized to interest expense over the terms of the related debt issuances. The company had a cash outlay of $50 million in 2019 associated with termination of the arrangements, included in other financing activities, net, in the accompanying statement of cash flows.

Fair Value of Other Financial Instruments

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:

	September 28, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value
Debt Obligations:
Senior notes	$	16,350	$	17,513	$	18,276	$	18,322
Commercial paper	683		683		693		693
Other	20		20		21		21
	$	17,053	$	18,216	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.

Note 13. Supplemental Cash Flow Information

	Nine Months Ended
	September 28,		September 29,
(In millions)	2019		2018
Non-cash Investing and Financing Activities
Declared but unpaid dividends	$	77	$	69
Issuance of stock upon vesting of restricted stock units	179		167

Cash, cash equivalents and restricted cash is included in the consolidated balance sheet as follows:

	September 28,		December 31,
(In millions)	2019		2018
Cash and Cash Equivalents	$	1,273	$	2,103
Restricted Cash Included in Other Current Assets	31		12
Restricted Cash Included in Other Assets	1		2
Cash, Cash Equivalents and Restricted Cash	$	1,305	$	2,117

Amounts included in restricted cash represent funds held as collateral for bank guarantees and incoming cash in China awaiting government administrative clearance.

26

THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 14. Restructuring and Other Costs (Income), Net

Restructuring and other costs (income), net, in the first nine months of 2019 primarily included the gain on the sale of the company's Anatomical Pathology business, and, to a lesser extent, transaction/integration costs related to acquisitions and a divestiture; sales of inventories revalued at the date of acquisition; and continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S. and Europe. In the first nine months of 2019, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of November 1, 2019, the company has identified restructuring actions that will result in additional charges of approximately $80 million, primarily in 2019 and 2020, and expects to identify additional actions during 2019 which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

During the third quarter of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net		Total
Life Sciences Solutions	$	5	$	—		$	3	$	8
Analytical Instruments	—		—			1		1
Specialty Diagnostics	—		—			23		23
Laboratory Products and Services	—		8			4		12
Corporate	—		(1		)	—		(1		)
	$	5	$	7		$	31	$	43

During the first nine months of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net			Total
Life Sciences Solutions	$	16	$	—		$	14		$	30
Analytical Instruments	—		24			10			34
Specialty Diagnostics	—		4			(480		)	(476		)
Laboratory Products and Services	—		27			12			39
Corporate	—		(1		)	2			1
	$	16	$	54		$	(442	)	$	(372	)

The principal components of net restructuring and other costs (income) by segment are as follows:

Life Sciences Solutions

In the first nine months of 2019, the Life Sciences Solutions segment recorded $30 million of net restructuring and other costs, principally charges to cost of revenues of $16 million for the sales of inventory revalued at the date of acquisition. The segment also recorded $14 million of restructuring and other charges for the impairment of acquired technology in development, and severance and other costs associated with facility consolidations in the U.S. and Europe.

Analytical Instruments

In the first nine months of 2019, the Analytical Instruments segment recorded $34 million of net restructuring and other charges, including $24 million of charges to selling, general, and administrative expense, principally transaction costs related to the acquisition of Gatan, subsequently terminated. The segment also recorded $10 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

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THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Specialty Diagnostics

In the first nine months of 2019, the Specialty Diagnostics segment recorded $476 million of net restructuring and other income, primarily a gain on the divestiture of its Anatomical Pathology business (see Note 2). The segment also recorded $4 million of charges to selling, general, and administrative expense for transaction costs in connection with the sale of the Anatomical Pathology business.

Laboratory Products and Services

In the first nine months of 2019, the Laboratory Products and Services segment recorded $39 million of net restructuring and other charges. The segment recorded $27 million of charges to selling, general, and administrative expense, principally transaction costs related to the acquisition and integration of Brammer Bio. The segment also recorded $12 million of restructuring and other costs, primarily for employee severance at businesses streamlining operations and employee compensation due at Brammer Bio on the date of acquisition.

Corporate

In the first nine months of 2019, the company recorded $1 million of net restructuring and other costs for severance at its corporate operations, partially offset by income from favorable results of product liability litigation.

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs (income), net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.

(In millions)	Severance			Abandonment of Excess Facilities			Other (a)			Total
Balance at December 31, 2018	$	34		$	42		$	4		$	80
Cumulative effect of accounting change (b)	—			(28		)	—			(28		)
Costs incurred in 2019 (d)	25			3			9			37
Reserves reversed (c)	(3		)	(1		)	—			(4		)
Payments	(29		)	(8		)	(8		)	(45		)
Currency translation	(1		)	—			—			(1		)
Balance at September 28, 2019	$	26		$	8		$	5		$	39

(a) Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

(b) Impact of adopting new lease accounting guidance on January 1, 2019.

(c) Represents reductions in cost of plans.

(d) Excludes $486 million net gain on the sale of businesses; $6 million of impairment of acquired in-process research and development; $3 million of compensation due to employees on the date of acquisition; and $2 million of other non-cash charges, net.

The company expects to pay accrued restructuring costs primarily through 2019.

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THERMO FISHER SCIENTIFIC INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

(Unaudited)

Note 15. Subsequent Events

Debt Issuances and Redemptions

Early in the fourth quarter of 2019, the company issued the following senior notes:

(In millions)	Principal Value Issued
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)	€	800
0.500% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)	€	800
2.600% 10-Year Senior Notes, Due 10/1/2029	$	900
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)	€	900
1.500% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)	€	900
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)	€	1,000

Net proceeds from the issuance of the notes in the table above was approximately $5.6 billion, after deducting underwriting discounts and estimated offering expenses. The company is using the proceeds to repay commercial paper obligations and to redeem the following senior notes:

(In millions)	Principal Value Redeemed
6.00% 10-Year Senior Notes, Due 3/1/2020	$	750
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	€	425
5.00% 10-Year Senior Notes, Due 1/15/2021	$	400
4.50% 10-Year Senior Notes, Due 3/1/2021	$	1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	$	1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	$	800

In connection with the redemptions, the company paid $21 million upon the termination of the fixed to floating rate swap arrangements on the redeemed senior notes and received $47 million upon termination of the related cross-currency interest rate swap arrangements (see Note 8).

The company incurred approximately $142 million of losses on the early extinguishment of debt in October 2019 due to the redemptions and related interest rate swap terminations discussed above.

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THERMO FISHER SCIENTIFIC INC.

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

Forward-looking statements, within the meaning of Section 21E of the Securities Exchange Act of 1934 are made throughout this Management’s Discussion and Analysis of Financial Condition and Results of Operations. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements, including without limitation statements regarding: projections of revenue, expenses, earnings, margins, tax rates, tax provisions, cash flows, pension and benefit obligations and funding requirements, our liquidity position; cost reductions, restructuring activities, new product and service developments, competitive strengths or market position, acquisitions or divestitures; growth, declines and other trends in markets we sell into; new or modified laws, regulations and accounting pronouncements; outstanding claims, legal proceedings, tax audits and assessments and other contingent liabilities; foreign currency exchange rates and fluctuations in those rates; general economic and capital markets conditions; the timing of any of the foregoing; assumptions underlying any of the foregoing; and any other statements that address events or developments that Thermo Fisher intends or believes will or may occur in the future. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates," and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements are accompanied by such words. While the company may elect to update forward-looking statements in the future, it specifically disclaims any obligation to do so, even if the company’s estimates change, and readers should not rely on those forward-looking statements as representing the company’s views as of any date subsequent to the date of the filing of this Quarterly Report.

A number of important factors could cause the results of the company to differ materially from those indicated by such forward-looking statements, including those detailed under the heading "Risk Factors" in Part II, Item 1A of this report on Form 10-Q.

Overview

The company develops, manufactures and sells a broad range of products that are sold worldwide. The company expands the product lines and services it offers by developing and commercializing its own technologies and by making strategic acquisitions of complementary businesses. The company’s continuing operations fall into four business segments (see Note 4): Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics and Laboratory Products and Services.

Recent Acquisitions and Divestiture

The company’s strategy is to augment internal growth at existing businesses with complementary acquisitions. The company’s principal recent acquisitions and divestitures are described below.

On October 25, 2018, the company acquired, within the Life Sciences Solutions segment, Becton Dickinson and Company's Advanced Bioprocessing business for $477 million in cash. This North America-based business adds complementary cell culture products that expand the segment's bioproduction offerings to help customers increase yield during production of biologic drugs. Revenues of the Advanced Bioprocessing business were $100 million in 2017.

On April 30, 2019, the company acquired, within the Laboratory Products and Services segment, Brammer Bio for approximately $1.7 billion in cash. Brammer Bio is a leading viral vector contract development and manufacturing organization for gene and cell therapies. The acquisition expands the segment's contract manufacturing capabilities. Revenues of Brammer Bio were approximately $140 million in 2018.

On June 28, 2019, the company sold its Anatomical Pathology business to PHC Holdings Corporation for $1.13 billion, net of cash divested. The business was part of the Specialty Diagnostics segment. The sale of this business resulted in a pre-tax gain of approximately $482 million, included in restructuring and other (income) costs, net. Revenues in 2019, through the date of sale, and the full year 2018 of the business sold were approximately $115 million and $238 million, respectively, net of retained sales through the company's healthcare market and research and safety market channel businesses.

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THERMO FISHER SCIENTIFIC INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Overview of Results of Operations and Liquidity

	Three Months Ended										Nine Months Ended
	September 28,					September 29,					September 28,					September 29,
(Dollars in millions)	2019					2018					2019					2018
Revenues
Life Sciences Solutions	$	1,701		27.1	%	$	1,504		25.4	%	$	5,018		26.8	%	$	4,572		25.6	%
Analytical Instruments	1,358			21.7	%	1,333			22.5	%	4,004			21.4	%	3,901			21.9	%
Specialty Diagnostics	879			14.0	%	894			15.1	%	2,779			14.9	%	2,773			15.5	%
Laboratory Products and Services	2,619			41.8	%	2,470			41.7	%	7,765			41.5	%	7,433			41.6	%
Eliminations	(285		)	(4.6	)%	(281		)	(4.7	)%	(853		)	(4.6	)%	(828		)	(4.6	)%
	$	6,272		100	%	$	5,920		100	%	$	18,713		100	%	$	17,851		100	%

Sales in the third quarter of 2019 were $6.27 billion, an increase of $352 million from 2018. Sales increased $27 million due to acquisitions, net of a divestiture. The unfavorable effects of currency translation resulted in a decrease in revenues of $83 million in the third quarter of 2019. Aside from the effects of acquisitions and currency translation, revenues increased $408 million (7%) primarily due to increased demand in the quarter compared to the 2018 quarter. Sales to customers in each of the company's primary end markets grew except for sales to industrial customers which were flat. Sales to customers in the biotech and pharmaceutical industry remained particularly strong. Sales growth was strong in Europe, Asia and North America.

In the third quarter of 2019, total company operating income and operating income margin were $946 million and 15.1%, respectively, compared with $912 million and 15.4%, respectively, in 2018. The increase in operating income was primarily due to profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases. These increases were offset in part by strategic growth investments, reversal of a litigation accrual in the 2018 period and, to a lesser extent, unfavorable sales mix. The company’s references to strategic growth investments generally refer to targeted spending for enhancing commercial capabilities, including expansion of geographic sales reach and e-commerce platforms, marketing initiatives, expanded service and operational infrastructure, focused research projects and other expenditures to enhance the customer experience. The company’s references throughout this discussion to productivity improvements generally refer to improved cost efficiencies from its Practical Process Improvement (PPI) business system, reduced costs resulting from global sourcing initiatives, a lower cost structure following restructuring actions, including headcount reductions and consolidation of facilities, and low cost region manufacturing.

The company's effective tax rate was 7.6% for the third quarter of 2019. The company expects its effective tax rate for all of 2019 will be between 8% and 11% based on currently forecasted rates of profitability in the countries in which the company conducts business and expected generation of foreign tax credits. Due primarily to the non-deductibility of intangible asset amortization for tax purposes, the company’s cash payments for income taxes are higher than its income tax expense for financial reporting purposes and are expected to total $725 to $775 million in 2019. The company's effective tax rate was 12.5% for the third quarter of 2018 including a net tax provision of $47 million to adjust the impacts of U.S. tax reform.

Net income increased to $760 million in the third quarter of 2019 from $709 million in the third quarter of 2018, primarily due to the increase in operating income and decrease in income tax provision in the 2019 period (both discussed above) offset in part by $42 million of losses on the early extinguishment of debt in the third quarter of 2019.

During the first nine months of 2019, the company’s cash flow from operations totaled $3.06 billion compared with $2.74 billion for 2018. The increase primarily resulted from lower investment in working capital in 2019 as well as higher income before amortization and depreciation.

As of September 28, 2019, the company’s short-term debt totaled $661 million consisting principally of senior notes due within the next twelve months. The company has a revolving credit facility with a bank group that provides up to $2.50 billion of unsecured multi-currency revolving credit. If the company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of September 28, 2019, no borrowings were outstanding under the company’s revolving credit facility, although available capacity was reduced by approximately $80 million as a result of outstanding letters of credit. The company completed a refinancing of $5.6 billion of debt early in the fourth quarter as discussed in Note 15.

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THERMO FISHER SCIENTIFIC INC.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Overview of Results of Operations and Liquidity (continued)

The company believes that its existing cash and cash equivalents of $1.27 billion as of September 28, 2019 and its future cash flow from operations together with available borrowing capacity under its revolving credit agreement will be sufficient to meet the cash requirements of its existing businesses for the foreseeable future, including at least the next 24 months.

Critical Accounting Policies and Estimates

The company’s discussion and analysis of its financial condition and results of operations is based upon its financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and related disclosure of contingent liabilities. On an on-going basis, management evaluates its estimates, including those related to intangible assets and goodwill, income taxes, contingencies and litigation, and pension costs. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the need to make estimates about the effects of matters that are inherently uncertain. Management bases its estimates on historical experience, current market and economic conditions and other assumptions that management believes are reasonable. The results of these estimates form the basis for judgments about the carrying value of assets and liabilities where the values are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Management’s Discussion and Analysis and Note 1 to the Consolidated Financial Statements of the company’s Form 10-K for 2018, describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. While there have been no significant changes in the company's critical accounting policies during the first nine months of 2019, as described in Note 1, the company changed the manner in which it accounts for leases under guidance that became effective January 1, 2019.

Results of Operations

Third Quarter 2019 Compared With Third Quarter 2018

	Three Months Ended
(In millions)	September 28, 2019			September 29, 2018			Total Change			Currency Translation / Other *			Acquisitions/ Divestitures			Operations
Revenues
Life Sciences Solutions	$	1,701		$	1,504		$	197		$	(21	)	$	24		$	194
Analytical Instruments	1,358			1,333			25			(19		)	—			44
Specialty Diagnostics	879			894			(15		)	(11		)	(63		)	59
Laboratory Products and Services	2,619			2,470			149			(69		)	68			150
Eliminations	(285		)	(281		)	(4		)	37			(2		)	(39		)
Consolidated Revenues	$	6,272		$	5,920		$	352		$	(83	)	$	27		$	408

* Currency Translation/Other for the Laboratory Products and Services segment includes a reduction of revenue of $35 million for the impact of a change in the method of reporting certain intersegment sales with no impact on consolidated results.

Sales in the third quarter of 2019 were $6.27 billion, an increase of $352 million from the third quarter of 2018. Sales increased $27 million due to acquisitions, net of a divestiture. The unfavorable effects of currency translation resulted in a decrease in revenues of $83 million in 2019. Aside from the effects of acquisitions/divestitures and currency translation, revenues increased $408 million (7%) primarily due to increased demand in the quarter compared to the 2018 quarter. Sales to customers in each of the company's primary end markets grew except for sales to industrial customers which were flat. Sales to customers in the biotech and pharmaceutical industry remained particularly strong. Sales growth was strong in Europe, Asia and North America.

In the third quarter of 2019, total company operating income and operating income margin were $946 million and 15.1%, respectively, compared with $912 million and 15.4%, respectively, in 2018. The increase in operating income was primarily due to profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases. These increases were offset in part by strategic growth investments, reversal of a litigation accrual in the 2018 period and, to a lesser extent, unfavorable sales mix.

In the third quarter of 2019, the company recorded restructuring and other costs, net, of $43 million, including $19 million of net charges associated with sales of businesses in prior periods, including post-closing adjustments. The company recorded

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

Results of Operations (continued)

$5 million of charges to cost of revenues for the sale of inventories revalued at the date of acquisition. The company also recorded $7 million of charges to selling, general and administrative expenses, principally transaction and integration-related costs for recent acquisitions. In addition, the company recorded $12 million of cash restructuring charges, primarily for employee severance and abandoned facilities costs associated with the closure and consolidation of facilities in the U.S. and Europe. See Note 14 for restructuring charges expected in future periods.

In the third quarter of 2018, the company recorded restructuring and other income, net, of $32 million, including $4 million of net credits to selling, general and administrative expenses, primarily income from favorable results of product liability litigation, offset in part by third-party transaction/integration costs related to recent and pending acquisitions. The company recorded $24 million of cash restructuring costs, including severance and abandoned facilities costs associated with the closure and consolidation of facilities in the U.S. and Europe. The company also recorded $51 million of other income, net, principally for the favorable resolution of a litigation matter.

Segment Results

The company’s management evaluates segment operating performance using operating income before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition-related activities; restructuring and other costs/income including costs arising from facility consolidations such as severance and abandoned lease expense and gains and losses from the sale of real estate and product lines; and amortization of acquisition-related intangible assets. The company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitate comparison of performance for determining compensation (Note 4). Accordingly, the following segment data is reported on this basis.

	Three Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues
Life Sciences Solutions	$	1,701		$	1,504		13	%
Analytical Instruments	1,358			1,333			2	%
Specialty Diagnostics	879			894			(2	)%
Laboratory Products and Services	2,619			2,470			6	%
Eliminations	(285		)	(281		)	1	%
Consolidated Revenues	$	6,272		$	5,920		6	%
Segment Income
Life Sciences Solutions	$	586		$	495		18	%
Analytical Instruments	311			294			6	%
Specialty Diagnostics	223			223			—	%
Laboratory Products and Services	303			299			1	%
Subtotal Reportable Segments	1,423			1,311			9	%
Cost of Revenues Charges (Credits), Net	(5		)	1
Selling, General and Administrative Charges (Credits), Net	(7		)	4
Restructuring and Other Costs (Income), Net	(31		)	27
Amortization of Acquisition-related Intangible Assets	(434		)	(431		)
Consolidated Operating Income	$	946		$	912		4	%
Reportable Segments Operating Income Margin	22.7		%	22.1		%
Consolidated Operating Income Margin	15.1		%	15.4		%

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Results of Operations (continued)

Income from the company’s reportable segments increased 9% to $1.42 billion in the third quarter of 2019 due primarily to profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases, offset in part by strategic growth investments and, to a lesser extent, unfavorable sales mix.

Life Sciences Solutions

	Three Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	1,701		$	1,504		13	%
Operating Income Margin	34.5		%	32.9		%	1.6 pt

Sales in the Life Sciences Solutions segment increased $197 million to $1.70 billion in the third quarter of 2019. Sales increased $194 million (13%) due to higher revenues at existing businesses and $24 million due to an acquisition. The unfavorable effects of currency translation resulted in a decrease in revenues of $21 million. The increase in revenue at existing businesses was primarily due to increased demand in each of the segment's principal businesses with particular strength in sales of bioproduction and biosciences products.

Operating income margin was 34.5% in the third quarter of 2019 compared to 32.9% in the third quarter of 2018. The increase resulted primarily from profit on higher sales, offset in part by strategic growth investments and, to a lesser extent, unfavorable sales mix.

Analytical Instruments

	Three Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	1,358		$	1,333		2	%
Operating Income Margin	23.0		%	22.0		%	1 pt

Sales in the Analytical Instruments segment increased $25 million to $1.36 billion in the third quarter of 2019. Sales increased $44 million (3%) due to higher revenues at existing businesses. The unfavorable effects of currency translation resulted in a decrease in revenues of $19 million. The increase in revenue at existing businesses was primarily due to increased demand for chromatography and mass spectrometry products.

Operating income margin was 23.0% in the third quarter of 2019 compared to 22.0% in the third quarter of 2018. The increase resulted primarily from profit on higher sales and productivity improvements, net of inflationary cost increases, offset in part by unfavorable sales mix and, to a lesser extent, strategic growth investments.

Specialty Diagnostics

	Three Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	879		$	894		(2	)%
Operating Income Margin	25.3		%	25.0		%	0.3 pt

Sales in the Specialty Diagnostics segment decreased $15 million to $879 million in the third quarter of 2019. The divestiture of Anatomical Pathology business resulted in a decrease in sales of $63 million. The unfavorable effects of currency translation resulted in a decrease in revenues of $11 million. These decreases were offset in part by $59 million (7%) of higher revenues at existing businesses. The increase in revenue at existing businesses was due to higher demand in each of the

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Results of Operations (continued)

segment's principal businesses with particular strength in sales of products sold through the segment's healthcare market channel business as well as immunodiagnostic products.

Operating income margin was 25.3% in the third quarter of 2019 and 25.0% in the third quarter of 2018. The increase was primarily due to profit on higher sales and productivity improvements, net of inflationary cost increases, offset in part by strategic growth investments and unfavorable sales mix.

Laboratory Products and Services

	Three Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	2,619		$	2,470		6	%
Operating Income Margin	11.6		%	12.1		%	-0.5 pt

Sales in the Laboratory Products and Services segment increased $149 million to $2.62 billion in the third quarter of 2019. Sales increased $150 million (6%) due to higher revenues at existing businesses and $68 million due to an acquisition. The unfavorable effects of currency translation resulted in a decrease in revenues of $34 million. Revenues decreased $35 million due primarily to a change in the method of reporting certain intersegment sales with no impact to consolidated results. The increase in revenue at existing businesses was primarily due to increased demand for products sold through its research and safety market channel business and service offerings of the segment's pharma services business.

Operating income margin was 11.6% in the third quarter of 2019 and 12.1% in the third quarter of 2018. The decrease was primarily due to strategic growth investments and, to a lesser extent, unfavorable sales mix offset in part by profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases.

Other Expense, Net

The company reported other expense, net, of $124 million and $102 million in the third quarter of 2019 and 2018, respectively (Note 5). In the third quarter of 2019, the company recorded $42 million of losses on the early extinguishment of debt). An increase in interest income of $11 million in 2019 was offset in part by an increase in interest expense of $2 million. The company expects to incur an additional $142 million of losses on the early extinguishment of debt in the fourth quarter of 2019 (see Note 15).

Provision for Income Taxes

The company's effective tax rate was 7.6% for the third quarter of 2019. The company expects its effective tax rate for all of 2019 will be between 8% and 11% based on currently forecasted rates of profitability in the countries in which the company conducts business and expected generation of foreign tax credits. Due primarily to the non-deductibility of intangible asset amortization for tax purposes, the company’s cash payments for income taxes are higher than its income tax expense for financial reporting purposes and are expected to total $725 to $775 million in 2019. The company's effective tax rate was 12.5% for the third quarter of 2018 including a net tax provision of $47 million to adjust the impacts of U.S. tax reform.

The company has operations and a taxable presence in approximately 50 countries outside the U.S. Some of these countries have lower tax rates than the U.S. The company’s ability to obtain a benefit from lower tax rates outside the U.S. is dependent on its relative levels of income in countries outside the U.S. and on the statutory tax rates in those countries. Based on the dispersion of the company’s non-U.S. income tax provision among many countries, the company believes that a change in the statutory tax rate in any individual country is not likely to materially affect the company’s income tax provision or net income, aside from any resulting one-time adjustment to the company’s deferred tax balances to reflect a new rate.

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Results of Operations (continued)

First Nine Months of 2019 Compared With First Nine Months of 2018

	Nine Months Ended
(In millions)	September 28, 2019			September 29, 2018			Total Change			Currency Translation / Other *			Acquisitions/ Divestitures			Operations
Revenues
Life Sciences Solutions	$	5,018		$	4,572		$	446		$	(108	)	$	83		$	471
Analytical Instruments	4,004			3,901			103			(85		)	—			188
Specialty Diagnostics	2,779			2,773			6			(58		)	(63		)	127
Laboratory Products and Services	7,765			7,433			332			(189		)	94			427
Eliminations	(853		)	(828		)	(25		)	45			(2		)	(68		)
Consolidated Revenues	$	18,713		$	17,851		$	862		$	(395	)	$	112		$	1,145

* Currency Translation/Other for the Laboratory Products and Services segment includes a reduction of revenue of $35 million for the impact of a change in the method of reporting certain intersegment sales with no impact on consolidated results.

Sales in the first nine months of 2019 were $18.71 billion, an increase of $862 million from the first nine months of 2018. Sales increased $112 million due to acquisitions, net of a divestiture. The unfavorable effects of currency translation resulted in a decrease in revenues of $395 million in 2019. Aside from the effects of currency translation and acquisitions, revenues increased $1.15 billion (6%) primarily due to increased demand. Sales to customers in each of the company's primary end markets grew with particular strength in sales to customers in the biotech and pharmaceutical industry. Sales growth was strong in each of the company's primary geographic areas, particularly Asia.

In the first nine months of 2019, total company operating income and operating income margin were $3.36 billion and 18.0%, respectively, compared with $2.64 billion and 14.8%, respectively, in the first nine months of 2018. The increase in operating income was primarily due to profit on higher sales, the gain on the sale of the Anatomical Pathology business and, to a lesser extent, productivity improvements, net of inflationary cost increases. These increases were offset in part by strategic growth investments, unfavorable sales mix and unfavorable foreign currency exchange.

In the first nine months of 2019, the company recorded restructuring and other income, net, of $372 million, including $482 million of net gains on the sale of businesses, principally the Anatomical Pathology business (see Note 2). The company also recorded $16 million of charges to cost of revenues for the sale of inventories revalued at the date of acquisition, and $54 million of net charges to selling, general and administrative expenses, principally transaction and integration-related costs related to acquisitions and a divestiture. In addition, the company recorded $33 million of cash restructuring charges, net, primarily for employee severance and abandoned facilities costs associated with the closure and consolidation of facilities in the U.S. and Europe (see Note 14).

In the first nine months of 2018, the company recorded restructuring and other costs, net, of $49 million, including $7 million of charges to cost of revenues primarily for the sale of inventories revalued at the date of acquisition. The company recorded $7 million of charges to selling, general and administrative expenses, primarily for third-party transaction and integration costs associated with recent and pending acquisitions, offset in part by income from the favorable results of product liability litigation. In addition, the company recorded $75 million of cash restructuring costs in its continuing effort to streamline operations, including severance at several businesses and abandoned facility expenses at businesses that have been or are being consolidated in the U.S., Europe and Asia. The company also recorded $40 million of other income, net, principally for resolution of a litigation matter.

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Results of Operations (continued)

Segment Results

	Nine Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues
Life Sciences Solutions	$	5,018		$	4,572		10	%
Analytical Instruments	4,004			3,901			3	%
Specialty Diagnostics	2,779			2,773			—	%
Laboratory Products and Services	7,765			7,433			4	%
Eliminations	(853		)	(828		)	3	%
Consolidated Revenues	$	18,713		$	17,851		5	%
Segment Income
Life Sciences Solutions	$	1,756		$	1,534		14	%
Analytical Instruments	879			831			6	%
Specialty Diagnostics	707			719			(2	)%
Laboratory Products and Services	933			916			2	%
Subtotal Reportable Segments	4,275			4,000			7	%
Cost of Revenues Charges	(16		)	(7		)
Selling, General and Administrative Charges, Net	(54		)	(7		)
Restructuring and Other Income (Costs), Net	442			(35		)
Amortization of Acquisition-related Intangible Assets	(1,285		)	(1,316		)
Consolidated Operating Income	$	3,362		$	2,635		28	%
Reportable Segments Operating Income Margin	22.8		%	22.4		%
Consolidated Operating Income Margin	18.0		%	14.8		%

Income from the company’s reportable segments increased 7% to $4.28 billion in the first nine months of 2019 due primarily to profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases, offset in part by strategic growth investments, unfavorable sales mix and unfavorable foreign currency exchange.

Life Sciences Solutions

	Nine Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	5,018		$	4,572		10	%
Operating Income Margin	35.0		%	33.5		%	1.5 pt

Sales in the Life Sciences Solutions segment increased $446 million to $5.02 billion in the first nine months of 2019. Sales increased $471 million (10%) due to higher revenues at existing businesses and $83 million due to an acquisition. The unfavorable effects of currency translation resulted in a decrease in revenues of $108 million. The increase in revenue at existing businesses was primarily due to increased demand in each of the segment's principal businesses with particular strength in sales of bioproduction and biosciences products.

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Results of Operations (continued)

Operating income margin was 35.0% in the first nine months of 2019 compared to 33.5% in the first nine months of 2018. The increase resulted primarily from profit on higher sales offset in part by strategic growth investments and, to a lesser extent, unfavorable sales mix and unfavorable foreign currency exchange.

Analytical Instruments

	Nine Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	4,004		$	3,901		3	%
Operating Income Margin	22.0		%	21.3		%	0.7 pt

Sales in the Analytical Instruments segment increased $103 million to $4.00 billion in the first nine months of 2019. Sales increased $188 million (5%) due to higher revenues at existing businesses. The unfavorable effects of currency translation resulted in a decrease in revenues of $85 million. The increase in revenue at existing businesses was due to increased demand for products sold by each of the segment's primary businesses with particular strength in chromatography and mass spectrometry instruments.

Operating income margin was 22.0% in the first nine months of 2019 compared to 21.3% in the first nine months of 2018. The increase resulted primarily from profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases. These increases were offset in part by unfavorable sales mix and strategic growth investments.

Specialty Diagnostics

	Nine Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	2,779		$	2,773		—	%
Operating Income Margin	25.5		%	25.9		%	-0.4 pt

Sales in the Specialty Diagnostics segment increased $6 million to $2.78 billion in the first nine months of 2019. Sales increased $127 million (5%) due to higher revenues at existing businesses. The unfavorable effects of currency translation resulted in a decrease in revenues of $58 million and the divestiture of Anatomical Pathology business decreased revenue by $63 million. The increase in revenue at existing businesses was due to increased demand for products sold through the segment's healthcare market channel as well as clinical diagnostic and immunodiagnostic products.

Operating income margin was 25.5% in the first nine months of 2019 compared to 25.9% in the first nine months of 2018. The decrease was primarily due to strategic growth investments offset in part by profit on higher sales and, to a lesser extent, productivity improvements, net of inflationary cost increases.

Laboratory Products and Services

	Nine Months Ended
	September 28,			September 29,
(Dollars in millions)	2019			2018			Change
Revenues	$	7,765		$	7,433		4	%
Operating Income Margin	12.0		%	12.3		%	-0.3 pt

Sales in the Laboratory Products and Services segment increased $332 million to $7.77 billion in 2019. Sales increased $427 million (6%) due to higher revenues at existing businesses and $94 million due to an acquisition. The unfavorable effects of currency translation resulted in a decrease in revenues of $154 million. Revenues decreased $35 million due primarily to a change in the method of reporting certain intersegment sales with no impact to consolidated results. The increase in revenue at

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Results of Operations (continued)

existing businesses was primarily due to increased demand in each of the segment's principal businesses with particular strength in service offerings of its pharma services business and products sold through its research and safety market channel business.

Operating income margin was 12.0% in the first nine months of 2019 compared to 12.3% in the first nine months of 2018. The decrease was primarily due to strategic growth investments and unfavorable sales mix offset in part by productivity improvements, net of inflationary cost increases, and profit on higher sales.

Other Expense, Net

The company reported other expense, net, of $330 million and $385 million in the first nine months of 2019 and 2018, respectively (Note 5). An increase in interest income of $87 million was offset in part by an increase in interest expense of $39 million. In 2019, the company recorded $42 million of losses on the early extinguishment of debt. The company expects to incur an additional $142 million of losses on the early extinguishment of debt in the fourth quarter of 2019 (see Note 15).

Provision for Income Taxes

The company recorded a $338 million provision for income taxes in the first nine months of 2019 including $191 million related to the gain on the sale of the Anatomical Pathology business. In addition, in 2019, the company recorded a $62 million income tax benefit related to a foreign exchange loss for tax purposes on certain intercompany financing arrangements and implemented foreign tax credit planning in Sweden which resulted in $75 million of foreign tax credits, with no related incremental U.S. income tax expense.

The company recorded a $210 million provision for income taxes in the first nine months of 2018. In 2018, the company recorded a net tax provision of $68 million to adjust the estimated initial impacts of U.S. tax reform recorded in 2017, consisting of an incremental provision of $117 million offset in part by a $49 million reduction of related unrecognized tax benefits established in 2017. These adjustments were required based on new U.S. Treasury guidance and further analysis of available tax accounting methods and elections, legislative updates, regulations, earnings and profit computations and foreign taxes.

Recent Accounting Pronouncements

A description of recently issued accounting standards is included under the heading "Recent Accounting Pronouncements" in Note 1.

Contingent Liabilities

The company is contingently liable with respect to certain legal proceedings and related matters. An unfavorable outcome that differs materially from current accrual estimates, if any, for one or more of the matters described under the headings "Product Liability, Workers Compensation and Other Personal Injury Matters," "Intellectual Property Matters" and "Commercial Matters" in Note 10 could have a material adverse effect on the company’s financial position as well as its results of operations and cash flows.

Liquidity and Capital Resources

Consolidated working capital (current assets less current liabilities) was $4.67 billion at September 28, 2019, compared with $4.48 billion at December 31, 2018. Included in working capital were cash and cash equivalents of $1.27 billion at September 28, 2019 and $2.10 billion at December 31, 2018.

First Nine Months of 2019

Cash provided by operating activities was $3.06 billion during the first nine months of 2019. Cash provided by income was offset in part by investments in working capital. Increases in accounts receivable and inventories used cash of $321 million and $449 million, respectively, primarily to support growth in sales. An increase in other assets used cash of $186 million primarily due to the timing of customer billings. Other liabilities increased by $172 million primarily due to advance payments from customers. Cash payments for income taxes increased to $589 million during the first nine months of 2019, compared with $449 million in the first nine months of 2018. The company made cash contributions to its pension and postretirement benefit plans totaling $40 million during the first nine months of 2019. Payments for restructuring actions, principally severance costs and lease and other expenses of real estate consolidation, used cash of $45 million during the first nine months of 2019.

During the first nine months of 2019, the company’s investing activities used $1.15 billion of cash. Acquisitions used cash of $1.69 billion. Proceeds from the sale of the Anatomical Pathology business provided $1.13 billion. The company's investing

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AND RESULTS OF OPERATIONS

Liquidity and Capital Resources (continued)

activities also included the purchase of $637 million of property, plant and equipment. On September 30, 2019, the company acquired an active pharmaceutical ingredient manufacturing site in Cork, Ireland for approximately €90 million in cash.

The company’s financing activities used $2.60 billion of cash during the first nine months of 2019. Repayment of senior notes used cash of $1.70 billion. A net increase in commercial paper obligations provided cash of $3 million. The company’s financing activities also included the repurchase of $750 million of the company's common stock and the payment of $221 million in cash dividends, offset in part by $115 million of net proceeds from employee stock option exercises. On September 7, 2018, the Board of Directors authorized the repurchase of up to $2.00 billion of the company’s common stock. Early in the fourth quarter of 2019, the company repurchased $750 million of the company's common stock. At November 1, 2019, authorization remained for $500 million of future repurchases of the company’s common stock. As discussed in Note 15, early in the fourth quarter of 2019, the company issued new senior notes for net proceeds of $5.6 billion and is using those proceeds to redeem existing debt.

The company's commitments for purchases of property, plant and equipment, contractual obligations and other commercial commitments did not change materially between December 31, 2018 and September 28, 2019. The company expects that for all of 2019, expenditures for property, plant and equipment, net of disposals, will approximate $925 and $975 million.

As of September 28, 2019, the company’s short-term debt totaled $661 million consisting principally of senior notes due within the next twelve months. The company has a revolving credit facility with a bank group that provides up to $2.50 billion of unsecured multi-currency revolving credit. If the company borrows under this facility, it intends to leave undrawn an amount equivalent to outstanding commercial paper to provide a source of funds in the event that commercial paper markets are not available. As of September 28, 2019, no borrowings were outstanding under the company’s revolving credit facility, although available capacity was reduced by approximately $80 million as a result of outstanding letters of credit.

Approximately half of the company’s cash balances and cash flows from operations are from outside the U.S. The company uses its non-U.S. cash for needs outside of the U.S. including acquisitions and repayment of acquisition-related intercompany debt to the U.S. In addition, the company also transfers cash to the U.S. using non-taxable returns of capital as well as dividends where the related U.S. dividend received deduction or foreign tax credit equals any tax cost arising from the dividends. As a result of using such means of transferring cash to the U.S., the company does not expect any material adverse liquidity effects from its significant non-U.S. cash balances for the foreseeable future.

The company believes that its existing cash and cash equivalents of $1.27 billion as of September 28, 2019 and its future cash flow from operations together with available borrowing capacity under its revolving credit agreement will be sufficient to meet the cash requirements of its existing businesses for the foreseeable future, including at least the next 24 months.

First Nine Months of 2018

Cash provided by operating activities was $2.74 billion during the first nine months of 2018. Cash provided by income was offset in part by investments in working capital. Increases in accounts receivable and inventories used cash of $64 million and $333 million, respectively, primarily to support growth in sales. An increase in other assets used cash of $185 million primarily due to the timing of customer billings and income tax refunds. Other liabilities decreased by $199 million primarily due to the timing of payments for income taxes and, to a lesser extent, incentive compensation. Cash payments for income taxes totaled $449 million. The company made cash contributions to its pension and postretirement benefit plans totaling $78 million during the first nine months of 2018. Payments for restructuring actions, principally severance costs and lease and other expenses of real estate consolidation, used cash of $62 million during the first nine months of 2018.

During the first nine months of 2018, the company’s investing activities used $532 million of cash. Acquisitions used cash of $59 million. The company’s investing activities also included the purchase of $474 million of property, plant and equipment.

The company’s financing activities used $2.22 billion of cash during the first nine months of 2018. Repayment of senior notes used cash of $2.05 billion. New long-term borrowings provided cash of $690 million. A net decrease in commercial paper obligations used cash of $464 million. The company’s financing activities also included the payment of $198 million in cash dividends, offset in part by $97 million of net proceeds from employee stock option exercises.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The company's exposure to market risk from changes in interest rates and currency exchange rates has not changed materially from its exposure at year-end 2018.

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Item 4. Controls and Procedures

Management’s Evaluation of Disclosure Controls and Procedures

The company’s management, with the participation of the company’s chief executive officer and chief financial officer, has evaluated the effectiveness of the company’s disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based on such evaluation, the company’s chief executive officer and chief financial officer concluded that, as of the end of such period, the company’s disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There have been no changes in the company’s internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the fiscal quarter ended September 28, 2019, that have materially affected or are reasonably likely to materially affect the company’s internal control over financial reporting.

PART II OTHER INFORMATION

Item 1. Legal Proceedings

There are various lawsuits and claims against the company involving product liability, intellectual property, employment and commercial issues. See "Note 10 to our Consolidated Financial Statements – Commitments and Contingencies."

Item 1A. Risk Factors

Set forth below are the risks that we believe are material to our investors. This section contains forward-looking statements. You should refer to the explanation of the qualifications and limitations on forward-looking statements beginning on page 30.

We must develop new products, adapt to rapid and significant technological change and respond to introductions of new products by competitors to remain competitive. Our growth strategy includes significant investment in and expenditures for product development. We sell our products in several industries that are characterized by rapid and significant technological changes, frequent new product and service introductions and enhancements and evolving industry standards. Competitive factors include technological innovation, price, service and delivery, breadth of product line, customer support, e-business capabilities and the ability to meet the special requirements of customers. Our competitors may adapt more quickly to new technologies and changes in customers’ requirements than we can. Without the timely introduction of new products, services and enhancements, our products and services will likely become technologically obsolete over time, in which case our revenue and operating results would suffer.

Many of our existing products and those under development are technologically innovative and require significant planning, design, development and testing at the technological, product and manufacturing-process levels. Our customers use many of our products to develop, test and manufacture their own products. As a result, we must anticipate industry trends and develop products in advance of the commercialization of our customers’ products. If we fail to adequately predict our customers’ needs and future activities, we may invest heavily in research and development of products and services that do not lead to significant revenue.

It may be difficult for us to implement our strategies for improving internal growth. Our growth depends in part on the growth of the markets which we serve. Any decline or lower than expected growth in our served markets could diminish demand for our products and services, which would adversely affect our results of operations and financial condition. To address this issue, we are pursuing a number of strategies to improve our internal growth, including:

• strengthening our presence in selected geographic markets;

• allocating research and development funding to products with higher growth prospects;

• developing new applications for our technologies;

• expanding our service offerings;

• continuing key customer initiatives;

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Risk Factors (continued)

• combining sales and marketing operations in appropriate markets to compete more effectively;

• finding new markets for our products; and

• continuing the development of commercial tools and infrastructure to increase and support cross-selling opportunities of products and services to take advantage of our depth in product offerings.

We may not be able to successfully implement these strategies, and these strategies may not result in the expected growth of our business.

Our business is affected by general economic conditions and related uncertainties affecting markets in which we operate. Our business is affected by general economic conditions, both inside and outside the U.S. If the global economy and financial markets, or economic conditions in Europe, the U.S. or other key markets, are unstable, it could adversely affect the business, results of operations and financial condition of the company and its customers, distributors, and suppliers, having the effect of

• reducing demand for some of our products;

• increasing the rate of order cancellations or delays;

• increasing the risk of excess and obsolete inventories;

• increasing pressure on the prices for our products and services;

• causing supply interruptions which could disrupt our ability to produce our products; and

• creating longer sales cycles and greater difficulty in collecting sales proceeds.

Demand for some of our products depends on capital spending policies of our customers and on government funding policies. Our customers include pharmaceutical and chemical companies, laboratories, universities, healthcare providers, government agencies and public and private research institutions. Many factors, including public policy spending priorities, available resources and product and economic cycles, have a significant effect on the capital spending policies of these entities.

Spending by some of these customers fluctuates based on budget allocations and the timely passage of the annual federal budget. An impasse in federal government budget decisions could lead to substantial delays or reductions in federal spending.

Economic, political, foreign currency and other risks associated with international sales and operations could adversely affect our results of operations. International markets contribute a substantial portion of our revenues, and we intend to continue expanding our presence in these regions. The exposure to fluctuations in currency exchange rates takes on different forms. International revenues and costs are subject to the risk that fluctuations in exchange rates could adversely affect our reported revenues and profitability when translated into U.S. dollars for financial reporting purposes. These fluctuations could also adversely affect the demand for products and services provided by us. As a multinational corporation, our businesses occasionally invoice third-party customers in currencies other than the one in which they primarily do business (the "functional currency"). Movements in the invoiced currency relative to the functional currency could adversely impact our cash flows and our results of operations. As our international sales grow, exposure to fluctuations in currency exchange rates could have a larger effect on our financial results. In the first nine months of 2019, currency translation had an unfavorable effect of $395 million on revenues due to the strengthening of the U.S. dollar relative to other currencies in which the company sells products and services.

In addition, many of our employees, contract manufacturers, suppliers, job functions, outsourcing activities and manufacturing facilities are located outside the United States. Accordingly, our future results could be harmed by a variety of factors, including:

• interruption to transportation flows for delivery of parts to us and finished goods to our customers;

• changes in a specific country's or region's political, economic or other conditions;

• changes in diplomatic and trade relationships, including new tariffs, trade protection measures, import or export licensing requirements, trade embargoes and sanctions and other trade barriers;

• tariffs imposed by the U.S. on goods from other countries and tariffs imposed by other countries on U.S. goods, including the tariffs recently adopted by the U.S. government on various imports from China and by the Chinese government on certain U.S. goods;

• negative consequences from changes in tax laws;

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THERMO FISHER SCIENTIFIC INC.

Risk Factors (continued)

• difficulty in staffing and managing widespread operations;

• differing labor regulations;

• differing protection of intellectual property;

• unexpected changes in regulatory requirements; and

• geopolitical uncertainty or turmoil, including terrorism and war.

Significant developments stemming from the U.S. administration or the U.K.’s referendum on membership in the EU could have an adverse effect on us. The U.S. administration has called for substantial changes to trade agreements and is imposing significant increases on tariffs on goods imported into the United States. The administration has also indicated an intention to request Congress to make significant changes, replacement or elimination of the Patient Protection and Affordable Care Act, and government negotiation/regulation of drug prices paid by government programs. Changes in U.S. social, political, regulatory and economic conditions or laws and policies governing the health care system and drug prices, foreign trade, manufacturing, and development and investment in the territories and countries where we or our customers operate could adversely affect our operating results and our business.

Additionally, on June 23, 2016, the United Kingdom held a referendum and voted in favor of leaving the European Union, or EU. This referendum has created political and economic uncertainty, particularly in the United Kingdom and the EU, and this uncertainty may last for years. Our business could be affected during this period of uncertainty, and perhaps longer, by the impact of the United Kingdom’s referendum. In addition, our business could be negatively affected by new trade agreements between the United Kingdom and other countries, including the United States, and by the possible imposition of trade or other regulatory barriers in the United Kingdom. These possible negative impacts, and others resulting from the United Kingdom’s actual or threatened withdrawal from the EU, may adversely affect our operating results and our customers’ businesses.

Our inability to protect our intellectual property could have a material adverse effect on our business. In addition, third parties may claim that we infringe their intellectual property, and we could suffer significant litigation or licensing expense as a result. We place considerable emphasis on obtaining patent and trade secret protection for significant new technologies, products and processes because of the length of time and expense associated with bringing new products through the development process and into the marketplace. Our success depends in part on our ability to develop patentable products and obtain and enforce patent protection for our products both in the United States and in other countries. We own numerous U.S. and foreign patents, and we intend to file additional applications, as appropriate, for patents covering our products. Patents may not be issued for any pending or future patent applications owned by or licensed to us, and the claims allowed under any issued patents may not be sufficiently broad to protect our technology. Any issued patents owned by or licensed to us may be challenged, invalidated or circumvented, and the rights under these patents may not provide us with competitive advantages. In addition, competitors may design around our technology or develop competing technologies. Intellectual property rights may also be unavailable or limited in some foreign countries, which could make it easier for competitors to capture increased market position. We could incur substantial costs to defend ourselves in suits brought against us or in suits in which we may assert our patent rights against others. An unfavorable outcome of any such litigation could materially adversely affect our business and results of operations.

We also rely on trade secrets and proprietary know-how with which we seek to protect our products, in part, by confidentiality agreements with our collaborators, employees and consultants. These agreements may be breached and we may not have adequate remedies for any breach. In addition, our trade secrets may otherwise become known or be independently developed by our competitors.

Third parties may assert claims against us to the effect that we are infringing on their intellectual property rights. In the event that a claim relating to intellectual property is asserted against us, or third parties not affiliated with us hold pending or issued patents that relate to our products or technology, we may seek licenses to such intellectual property or challenge those patents. However, we may be unable to obtain these licenses on commercially reasonable terms, if at all, and our challenge of the patents may be unsuccessful. Our failure to obtain the necessary licenses or other rights could prevent the sale, manufacture, or distribution of our products and, therefore, could have a material adverse effect on our business, financial condition and results of operations.

Changes in governmental regulations may reduce demand for our products or increase our expenses. We compete in many markets in which we and our customers must comply with federal, state, local and international regulations, such as environmental, health and safety and food and drug regulations. We develop, configure and market our products to meet customer needs created by those regulations. Any significant change in regulations could reduce demand for our products or increase our expenses. For example, many of our instruments are marketed to the pharmaceutical industry for use in

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THERMO FISHER SCIENTIFIC INC.

Risk Factors (continued)

discovering and developing drugs. Changes in the U.S. Food and Drug Administration’s regulation of the drug discovery and development process could have an adverse effect on the demand for these products.

Our pharma services offerings are highly complex, and if we are unable to provide quality and timely offerings to our customers, our business could suffer. Our pharma services offerings are highly exacting and complex, due in part to strict quality and regulatory requirements. Our operating results in this business depend on our ability to execute and, when necessary, improve our quality management strategy and systems, and our ability to effectively train and maintain our employee base with respect to quality management. A failure of our quality control systems could result in problems with facility operations or preparation or provision of products. In each case, such problems could arise for a variety of reasons, including equipment malfunction, failure to follow specific protocols and procedures, problems with raw materials or environmental factors and damage to, or loss of, manufacturing operations. Such problems could affect production of a particular batch or series of batches of products, requiring the destruction of such products or a halt of facility production altogether.

In addition, our failure to meet required quality standards may result in our failure to timely deliver products to our customers, which in turn could damage our reputation for quality and service. Any such failure could, among other things, lead to increased costs, lost revenue, reimbursement to customers for lost drug product, registered intermediates, registered starting materials, and active pharmaceutical ingredients, other customer claims, damage to and possibly termination of existing customer relationships, time and expense spent investigating the cause and, depending on the cause, similar losses with respect to other batches or products. Production problems in our drug and biologic manufacturing operations could be particularly significant because the cost of raw materials for such manufacturing is often high. If problems in preparation or manufacture of a product or failures to meet required quality standards for that product are not discovered before such product is released to the market, we may be subject to adverse regulatory actions, including product recalls, product seizures, injunctions to halt manufacture and distribution, restrictions on our operations, civil sanctions, including monetary sanctions, and criminal actions. In addition, such problems or failures could subject us to litigation claims, including claims from our customers for reimbursement for the cost of lost or damaged active pharmaceutical ingredients, the cost of which could be significant.

We are subject to product and other liability risks for which we may not have adequate insurance coverage. We may be named as a defendant in product liability lawsuits, which may allege that products or services we have provided from our pharma services offerings have resulted or could result in an unsafe condition or injury to consumers. Additionally, products currently or previously sold by our environmental and process instruments and radiation measurement and security instruments businesses include fixed and portable instruments used for chemical, radiation and trace explosives detection. These products are used in airports, embassies, cargo facilities, border crossings and other high-threat facilities for the detection and prevention of terrorist acts. If any of these products were to malfunction, it is possible that explosive or radioactive material could fail to be detected by our product, which could lead to product liability claims. There are also many other factors beyond our control that could lead to liability claims, such as the reliability and competence of the customers’ operators and the training of such operators.

Any such product liability claims brought against us could be significant and any adverse determination may result in liabilities in excess of our insurance coverage. Although we carry product liability insurance, we cannot be certain that our current insurance will be sufficient to cover these claims or that it can be maintained on acceptable terms, if at all.

Our inability to complete any pending acquisitions or to successfully integrate any new or previous acquisitions could have a material adverse effect on our business. Our business strategy includes the acquisition of technologies and businesses that complement or augment our existing products and services. Certain acquisitions may be difficult to complete for a number of reasons, including the need for antitrust and/or other regulatory approvals. Any acquisition we may complete may be made at a substantial premium over the fair value of the net identifiable assets of the acquired company. Further, we may not be able to integrate acquired businesses successfully into our existing businesses, make such businesses profitable, or realize anticipated cost savings or synergies, if any, from these acquisitions, which could adversely affect our business.

Moreover, we have acquired many companies and businesses. As a result of these acquisitions, we recorded significant goodwill and indefinite-lived intangible assets (primarily tradenames) on our balance sheet, which amount to approximately $25.62 billion and $1.25 billion, respectively, as of September 28, 2019. In addition, we have definite-lived intangible assets totaling $13.06 billion as of September 28, 2019. We assess the realizability of goodwill and indefinite-lived intangible assets annually as well as whenever events or changes in circumstances indicate that these assets may be impaired. We assess the realizability of definite-lived intangible assets whenever events or changes in circumstances indicate that these assets may be impaired. These events or circumstances would generally include operating losses or a significant decline in earnings associated with the acquired business or asset. Our ability to realize the value of the goodwill and intangible assets will depend on the future cash flows of these businesses. These cash flows in turn depend in part on how well we have integrated these businesses.

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Risk Factors (continued)

If we are not able to realize the value of the goodwill and intangible assets, we may be required to incur material charges relating to the impairment of those assets.

We are subject to laws and regulations governing government contracts, and failure to address these laws and regulations or comply with government contracts could harm our business by leading to a reduction in revenue associated with these customers. We have agreements relating to the sale of our products to government entities and, as a result, we are subject to various statutes and regulations that apply to companies doing business with the government. The laws governing government contracts differ from the laws governing private contracts and government contracts may contain pricing terms and conditions that are not applicable to private contracts. We are also subject to investigation for compliance with the regulations governing government contracts. A failure to comply with these regulations could result in suspension of these contracts, criminal, civil and administrative penalties or debarment.

Because we compete directly with certain of our larger customers and product suppliers, our results of operations could be adversely affected in the short term if these customers or suppliers abruptly discontinue or significantly modify their relationship with us. Our largest customer in the laboratory products business is also a significant competitor. Our business may be harmed in the short term if our competitive relationship in the marketplace with certain of our large customers results in a discontinuation of their purchases from us. In addition, we manufacture products that compete directly with products that we source from third-party suppliers. We also source competitive products from multiple suppliers. Our business could be adversely affected in the short term if any of our large third-party suppliers abruptly discontinues selling products to us.

Because we rely heavily on third-party package-delivery services, a significant disruption in these services or significant increases in prices may disrupt our ability to ship products, increase our costs and lower our profitability. We ship a significant portion of our products to our customers through independent package delivery companies, such as Federal Express in the U.S. and DHL in Europe. We also maintain a small fleet of vehicles dedicated to the delivery of our products and ship our products through other carriers, including national and regional trucking firms, overnight carrier services and the U.S. Postal Service. If one or more of these third-party package-delivery providers were to experience a major work stoppage, preventing our products from being delivered in a timely fashion or causing us to incur additional shipping costs we could not pass on to our customers, our costs could increase and our relationships with certain of our customers could be adversely affected. In addition, if one or more of these third-party package-delivery providers were to increase prices, and we were not able to find comparable alternatives or make adjustments in our delivery network, our profitability could be adversely affected.

We are required to comply with a wide variety of laws and regulations, and are subject to regulation by various federal, state and foreign agencies. We are subject to various local, state, federal, foreign and transnational laws and regulations, which include the operating and security standards of the U.S. Federal Drug Administration (the FDA), the U.S. Drug Enforcement Agency (the DEA), various state boards of pharmacy, state health departments, the U.S. Department of Health and Human Services (the DHHS), the European Medicines Agency (the EMA), in Europe, the EU member states and other comparable agencies and, in the future, any changes to such laws and regulations could adversely affect us. In particular, we are subject to laws and regulations concerning current good manufacturing practices and drug safety. Our subsidiaries may be required to register for permits and/or licenses with, and may be required to comply with the laws and regulations of the DEA, the FDA, the DHHS, foreign agencies including the EMA, and other various state boards of pharmacy, state health departments and/or comparable state agencies as well as certain accrediting bodies depending upon the type of operations and location of product distribution, manufacturing and sale.

The manufacture, distribution and marketing of many of our products and services, including medical devices and pharma services, are subject to extensive ongoing regulation by the FDA, the DEA, the EMA, and other equivalent local, state, federal and non-U.S. regulatory authorities. In addition, we are subject to inspections by these regulatory authorities. Failure by us or by our customers to comply with the requirements of these regulatory authorities, including without limitation, remediating any inspectional observations to the satisfaction of these regulatory authorities, could result in warning letters, product recalls or seizures, monetary sanctions, injunctions to halt manufacture and distribution, restrictions on our operations, civil or criminal sanctions, or withdrawal of existing or denial of pending approvals, including those relating to products or facilities. In addition, such a failure could expose us to contractual or product liability claims, contractual claims from our customers, including claims for reimbursement for lost or damaged active pharmaceutical ingredients, as well as ongoing remediation and increased compliance costs, any or all of which could be significant. We are the sole manufacturer of a number of pharmaceuticals for many of our customers and a negative regulatory event could impact our customers' ability to provide products to their customers.

We are also subject to a variety of federal, state, local and international laws and regulations that govern, among other things, the importation and exportation of products, the handling, transportation and manufacture of substances that could be

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Risk Factors (continued)

classified as hazardous, and our business practices in the U.S. and abroad such as anti-corruption, anti-competition and privacy and data protection laws. Any noncompliance by us with applicable laws and regulations or the failure to maintain, renew or obtain necessary permits and licenses could result in criminal, civil and administrative penalties and could have an adverse effect on our results of operations.

Our business could be adversely affected by disruptions at our sites. We rely upon our manufacturing operations to produce many of the products we sell and our warehouse facilities to store products, pending sale. Any significant disruption of those operations for any reason, such as strikes or other labor unrest, power interruptions, fire, hurricanes or other events beyond our control could adversely affect our sales and customer relationships and therefore adversely affect our business. We have significant operations in California, near major earthquake faults, which make us susceptible to earthquake risk. Although most of our raw materials are available from a number of potential suppliers, our operations also depend upon our ability to obtain raw materials at reasonable prices. If we are unable to obtain the materials we need at a reasonable price, we may not be able to produce certain of our products or we may not be able to produce certain of these products at a marketable price, which could have an adverse effect on our results of operations.

Fluctuations in our effective tax rate may adversely affect our results of operations and cash flows. As a global company, we are subject to taxation in numerous countries, states and other jurisdictions. In preparing our financial statements, we record the amount of tax that is payable in each of the countries, states and other jurisdictions in which we operate. Our future effective tax rate, however, may be lower or higher than experienced in the past due to numerous factors, including a change in the mix of our profitability from country to country, changes in accounting for income taxes and recently enacted and future changes in tax laws in jurisdictions in which we operate. Any of these factors could cause us to experience an effective tax rate significantly different from previous periods or our current expectations, which could have an adverse effect on our business, results of operations and cash flows.

We may incur unexpected costs from increases in fuel and raw material prices, which could reduce our earnings and cash flow. Our primary commodity exposures are for fuel, petroleum-based resins and steel. While we may seek to minimize the impact of price increases through higher prices to customers and various cost-saving measures, our earnings and cash flows could be adversely affected in the event these measures are insufficient to cover our costs.

A significant disruption in, or breach in security of, our information technology systems or violation of data privacy laws could adversely affect our business. As a part of our ongoing effort to upgrade our current information systems, we periodically implement new enterprise resource planning software and other software applications to manage certain of our business operations. As we implement and add functionality, problems could arise that we have not foreseen. Such problems could disrupt our ability to provide quotes, take customer orders and otherwise run our business in a timely manner. When we upgrade or change systems, we may suffer interruptions in service, loss of data or reduced functionality. In addition, if our new systems fail to provide accurate pricing and cost data our results of operations and cash flows could be adversely affected.

We also rely on our information technology systems to process, transmit and store electronic information (including sensitive data such as confidential business information and personally identifiable data relating to employees, customers and other business partners) and to manage or support a variety of critical business processes and activities (such as interacting with suppliers, selling our products and services, fulfilling orders and billing, collecting and making payments, shipping products, providing services and support to customers, tracking customer activity, fulfilling contractual obligations and otherwise conducting business). Our systems may be vulnerable to damage or interruption from natural disasters, power loss, telecommunication failures, terrorist attacks, computer hackers, computer viruses, ransomware, phishing, computer denial-of-service attacks, unauthorized access to customer or employee data or company trade secrets, and other attempts to harm our systems. Certain of our systems are not redundant, and our disaster recovery planning is not sufficient for every eventuality. Despite any precautions we may take, such problems could result in, among other consequences, interruptions in our services, which could harm our reputation and financial results. Any of the cyber-attacks, breaches or other disruptions or damage described above, if significant, could materially interrupt our operations, delay production and shipments, result in theft of our and our customers’ intellectual property and trade secrets, damage customer, business partner and employee relationships and our reputation or result in defective products or services, legal claims and proceedings, liability and penalties under privacy laws and increased cost for security and remediation, each of which could adversely affect our business and financial results.

If we are unable to maintain reliable information technology systems and appropriate controls with respect to global data privacy and security requirements and prevent data breaches, we may suffer regulatory consequences in addition to business consequences. As a global organization, we are subject to data privacy and security laws, regulations, and customer-imposed controls in numerous jurisdictions as a result of having access to and processing confidential, personal and/or sensitive data in the course of our business. For example, in the United States, individual states regulate data breach and security requirements and multiple governmental bodies assert authority over aspects of the protection of personal privacy. European laws require us

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Risk Factors (continued)

to have an approved legal mechanism to transfer personal data out of Europe, and the recently-enacted EU General Data Protection Regulation, which took effect in May 2018, imposes significantly stricter requirements in how we collect and process personal data. Several countries, such as China and Russia, have passed laws that require personal data relating to their citizens to be maintained on local servers and impose additional data transfer restrictions. Government enforcement actions can be costly and interrupt the regular operation of our business, and data breaches or violations of data privacy laws can result in fines, reputational damage and civil lawsuits, any of which may adversely affect our business, reputation and financial statements.

Our debt may restrict our investment opportunities or limit our activities. As of September 28, 2019, we had approximately $17.05 billion in outstanding indebtedness. In addition, we have availability to borrow under a revolving credit facility that provides for up to $2.50 billion of unsecured multi-currency revolving credit. We may also obtain additional long-term debt and lines of credit to meet future financing needs, which would have the effect of increasing our total leverage.

Our leverage could have negative consequences, including increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional financing and limiting our ability to acquire new products and technologies through strategic acquisitions.

Our ability to make scheduled payments, refinance our obligations or obtain additional financing will depend on our future operating performance and on economic, financial, competitive and other factors beyond our control. Our business may not generate sufficient cash flow to meet our obligations. If we are unable to service our debt, refinance our existing debt or obtain additional financing, we may be forced to delay strategic acquisitions, capital expenditures or research and development expenditures.

Additionally, the agreements governing our debt require that we maintain certain financial ratios, and contain affirmative and negative covenants that restrict our activities by, among other limitations, limiting our ability to incur additional indebtedness, merge or consolidate with other entities, make investments, create liens, sell assets and enter into transactions with affiliates. The covenants in our revolving credit facility (the Facility) include a Consolidated Leverage Ratio (total debt-to-Consolidated EBITDA) and a Consolidated Interest Coverage Ratio (Consolidated EBITDA to Consolidated Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a maximum Consolidated Leverage Ratio of 3.5:1.0. The company has also agreed that so long as any lender has any commitment under the Facility or any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.0:1.0 as of the last day of any fiscal quarter.

Our ability to comply with these financial restrictions and covenants is dependent on our future performance, which is subject to prevailing economic conditions and other factors, including factors that are beyond our control such as foreign exchange rates and interest rates. Our failure to comply with any of these restrictions or covenants may result in an event of default under the applicable debt instrument, which could permit acceleration of the debt under that instrument and require us to prepay that debt before its scheduled due date. Also, an acceleration of the debt under certain of our debt instruments would trigger an event of default under other of our debt instruments.

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

Issuer Purchases of Equity Securities

There was no share repurchase activity for the company's third quarter of 2019. On September 7, 2018, the Board of Directors authorized the repurchase of up to $2.00 billion of the company’s common stock. At September 28, 2019, $1.25 billion was available for future repurchases of the company’s common stock under this authorization. Early in the fourth quarter of 2019, the company repurchased $750 million of the company's common stock, leaving $500 million remaining under this authorization.

Item 6. Exhibits

See Exhibit Index on page 49.

47

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, thereunto duly authorized.

Date:	November 1, 2019	THERMO FISHER SCIENTIFIC INC.
		/s/ Stephen Williamson
		Stephen Williamson
		Senior Vice President and Chief Financial Officer
		/s/ Peter E. Hornstra
		Peter E. Hornstra
		Vice President and Chief Accounting Officer

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EXHIBIT INDEX

Exhibit Number	Description of Exhibit
4.1	Eighteenth Supplemental Indenture, dated as of September 30, 2019, between the Company, as issuer, and The Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed September 30, 2019 [File No. 1-8002] and incorporated in this document by reference).
4.2	Nineteenth Supplemental Indenture, dated as of October 8, 2019, between the Company, as issuer, and the Bank of New York Mellon Trust Company, N.A., as trustee (filed as Exhibit 4.2 to the Registrant’s Current Report on Form 8-K filed October 8, 2019 [File No. 1-8002] and incorporated in this document by reference).
31.1	Certification of Chief Executive Officer required by Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer required by Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer required by Exchange Act Rules 13a-14(b) and 15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2	Certification of Chief Financial Officer required by Exchange Act Rules 13a-14(b) and 15d-14(b), as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	XBRL Taxonomy Extension Schema Document.
101.CAL	XBRL Taxonomy Calculation Linkbase Document.
101.DEF	XBRL Taxonomy Definition Linkbase Document.
101.LAB	XBRL Taxonomy Label Linkbase Document.
101.PRE	XBRL Taxonomy Presentation Linkbase Document.
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
	The Registrant agrees, pursuant to Item 601(b)(4)(iii)(A) of Regulation S-K, to furnish to the Commission, upon request, a copy of each instrument with respect to long-term debt of the Registrant or its consolidated subsidiaries.

 _______________________

* Indicates management contract or compensatory plan, contract or arrangement.

** Certification is not deemed "filed" for purposes of Section 18 of the Exchange Act or otherwise subject to the liability of that section. Such certification is not deemed to be incorporated by reference into any filing under the Securities Act or the Exchange Act except to the extent that the registrant specifically incorporates it by reference.

49

EX-31.1

Exhibit 31.1

THERMO FISHER SCIENTIFIC INC.

CERTIFICATION REQUIRED BY EXCHANGE ACT RULES 13a-14(a) and 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Marc N. Casper, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019

/s/ Marc N. Casper

Marc N. Casper

President and Chief Executive Officer

EX-31.2

Exhibit 31.2

THERMO FISHER SCIENTIFIC INC.

CERTIFICATION REQUIRED BY EXCHANGE ACT RULES 13a-14(a) and 15d-14(a),

AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Stephen Williamson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: November 1, 2019

/s/ Stephen Williamson

Stephen Williamson
Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

THERMO FISHER SCIENTIFIC INC.

CERTIFICATION REQUIRED BY EXCHANGE ACT RULES 13a-14(b) and 15d-14(b),

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc. (the “Company”) for the period ended September 28, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Marc N. Casper, President and Chief Executive Officer of the Company, hereby certifies, pursuant to Securities Exchange Act of 1934 Rules 13a-14(b) and 15d-14(b), that:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 1, 2019

/s/ Marc N. Casper

Marc N. Casper

President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Thermo Fisher Scientific Inc. and will be retained by Thermo Fisher Scientific Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

THERMO FISHER SCIENTIFIC INC.

CERTIFICATION REQUIRED BY EXCHANGE ACT RULES 13a-14(b) and 15d-14(b),

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of Thermo Fisher Scientific Inc. (the “Company”) for the period ended September 28, 2019 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Stephen Williamson, Senior Vice President and Chief Financial Officer of the Company, hereby certifies, pursuant to Securities Exchange Act of 1934 Rules 13a-14(b) and 15d-14(b), that:

(1)    The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)    The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated:  November 1, 2019

/s/ Stephen Williamson

Stephen Williamson

Senior Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Thermo Fisher Scientific Inc. and will be retained by Thermo Fisher Scientific Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

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Fair Value Measurements and Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 28, 2019

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018:

	September 28,		Quoted Prices in Active Markets		Significant Other Observable  Inputs		Significant Unobservable Inputs
(In millions)	2019		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	166	$	166	$	—	$	—
Investments in common stock, mutual funds and other similar instruments	19		19		—		—
Warrants	6		—		6		—
Insurance contracts	130		—		130		—
Derivative contracts	114		—		114		—
Total Assets	$	435	$	185	$	250	$	—
Liabilities
Derivative contracts	$	44	$	—	$	44	$	—
Contingent consideration	55		—		—		55
Total Liabilities	$	99	$	—	$	44	$	55

	December 31,		Quoted Prices in  Active Markets		Significant Other Observable  Inputs		Significant  Unobservable  Inputs
(In millions)	2018		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	769	$	769	$	—	$	—
Bank time deposits	2		2		—		—
Investments in mutual funds and other similar instruments	10		10		—		—
Warrants	8		—		8		—
Insurance contracts	113		—		113		—
Derivative contracts	31		—		31		—
Total Assets	$	933	$	781	$	152	$	—
Liabilities
Derivative contracts	$	145	$	—	$	145	$	—
Contingent consideration	37		—		—		37
Total Liabilities	$	182	$	—	$	145	$	37

Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Table Text Block]

The following table provides a rollforward of the fair value, as determined by level 3 inputs, of the contingent consideration.

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Contingent Consideration
Beginning Balance	$	58		$	40		$	37		$	35
Acquisitions (including assumed balances)	—			—			24			11
Payments	(3		)	(3		)	(3		)	(8		)
Change in fair value included in earnings	—			(3		)	(3		)	(4		)
Ending Balance	$	55		$	34		$	55		$	34

Schedule of Notional Amounts of Outstanding Derivative Positions [Table Text Block]

The following table provides the aggregate notional value of outstanding derivative contracts.

	September 28,		December 31,
(In millions)	2019		2018
Notional Amount
Interest rate swaps (described in Note 8)	$	3,100	$	3,100
Cross-currency interest rate swaps - designated as net investment hedges	1,800		1,500
Currency exchange contracts	5,693		3,424

As discussed in Note 15, early in the fourth quarter of 2019, the company settled certain of its interest rate swaps and cross-currency interest rate swaps upon the redemption of the related debt securities.

Schedule of Derivative Instruments in Statement of Financial Position, Fair Value [Table Text Block]

	Fair Value – Assets				Fair Value – Liabilities
	September 28,		December 31,		September 28,		December 31,
(In millions)	2019		2018		2019		2018
Derivatives Designated as Hedging Instruments
Interest rate swaps (a)	$	—	$	—	$	31	$	129
Cross-currency interest rate swaps (b)	107		28		—		—
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts (c)	7		3		13		16
Total Derivatives	$	114	$	31	$	44	$	145

(a) The fair value of the interest rate swaps is included in the consolidated balance sheet under the caption other long-term liabilities.

(b) The fair value of the cross-currency interest rate swaps is included in the consolidated balance sheet under the caption other assets.

(c) The fair value of the currency exchange contracts is included in the consolidated balance sheet under the captions other current assets or other accrued expenses.

The following amounts related to cumulative basis adjustments for fair value hedges were included in the consolidated balance sheet under the caption long-term obligations:

	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability (d)
	September 28,		December 31,		September 28,			December 31,
(In millions)	2019		2018		2019			2018
Long-term Obligations	$	3,078	$	3,291	$	(10	)	$	(93	)

(d)

Includes increases in the carrying amount of $20 million and $30 million at September 28, 2019 and December 31, 2018, respectively, on discontinued hedging relationships.

Schedule of Derivative Instruments, Gain (Loss) in Statement of Financial Performance [Table Text Block]

	Gain (Loss) Recognized
	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Fair Value Hedging Relationships
Interest rate swaps
Hedged long-term obligations - included in other expense, net	$	(14	)	$	8		$	(95	)	$	60
Derivatives designated as hedging instruments - included in other expense, net	15			(8		)	98			(57		)
Derivatives Designated as Cash Flow Hedges
Interest rate swaps
Included in unrealized losses on hedging instruments within other comprehensive items	(50		)	—			(50		)	—
Amount reclassified from accumulated other comprehensive items to other expense, net	(3		)	(3		)	(10		)	(9		)
Financial Instruments Designated as Net Investment Hedges
Foreign currency-denominated debt
Included in currency translation adjustment within other comprehensive items	261			50			320			250
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive items	72			5			79			8
Included in other expense, net	13			9			41			12
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts
Included in cost of product revenues	1			1			—			1
Included in other expense, net	43			(2		)	49			25

Fair Value, by Balance Sheet Grouping [Table Text Block]

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:

	September 28, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value
Debt Obligations:
Senior notes	$	16,350	$	17,513	$	18,276	$	18,322
Commercial paper	683		683		693		693
Other	20		20		21		21
	$	17,053	$	18,216	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.

Schedule of Carrying Values and Estimated Fair Values of Debt Instruments [Table Text Block]

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:

	September 28, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value
Debt Obligations:
Senior notes	$	16,350	$	17,513	$	18,276	$	18,322
Commercial paper	683		683		693		693
Other	20		20		21		21
	$	17,053	$	18,216	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.

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Earnings per Share (Tables)

9 Months Ended

Sep. 28, 2019

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions except per share amounts)	2019		2018		2019		2018
Net Income	$	760	$	709	$	2,694	$	2,040
Basic Weighted Average Shares	401		402		400		402
Plus Effect of:
Stock options and restricted units	3		4		3		4
Diluted Weighted Average Shares	404		406		403		406
Basic Earnings per Share	$	1.89	$	1.76	$	6.73	$	5.07
Diluted Earnings per Share	$	1.88	$	1.75	$	6.68	$	5.03
Antidilutive Stock Options Excluded from Diluted Weighted Average Shares	1		2		1		2

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Nature of Operations and Summary of Significant Accounting Policies

9 Months Ended

Sep. 28, 2019

Organization, Consolidation and Presentation of Financial Statements [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 or Thermo Fisher) enables customers to make the world healthier, cleaner and safer by helping them accelerate life sciences research, solve complex analytical challenges, improve patient diagnostics, deliver medicines to market and increase laboratory productivity. Markets served include pharmaceutical and biotech, academic and government, industrial and applied, as well as healthcare and diagnostics.

Interim Financial Statements

The interim 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 September 28, 2019, the results of operations for the three- and nine-month periods ended September 28, 2019 and September 29, 2018, and the cash flows for the nine-month periods ended September 28, 2019 and September 29, 2018. Interim results are not necessarily indicative of results for a full year.

The consolidated balance sheet presented as of December 31, 2018, 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 information that is included in the annual financial statements and notes thereto of the company. The consolidated financial statements and notes included in this report should be read in conjunction with the 2018 financial statements and notes included in the company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (SEC).

Note 1 to the consolidated financial statements for 2018 describes the significant accounting estimates and policies used in preparation of the consolidated financial statements. Except for the accounting for leases, as noted below, there have been no material changes in the company’s significant accounting policies during the nine months ended September 28, 2019.

Leases

The company determines whether an arrangement is, or contains, a lease at inception. Prior to 2019, the company generally accounted for operating lease payments by charging them to expense as incurred. Beginning in 2019, operating leases that have commenced are included in other assets, other accrued expenses and other long-term liabilities in the consolidated balance sheet. Classification of operating lease liabilities as either current or noncurrent is based on the expected timing of payments due under the company’s obligations.

Right-of-use (ROU) assets represent the company’s right to use an underlying asset for the lease term and lease liabilities represent the company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The company recognizes lease expense for these leases on a straight-line basis over the lease term.

Because most of the company’s leases do not provide an implicit rate, the company estimates incremental borrowing rates based on the information available at the commencement date in determining the present value of lease payments. The company uses the implicit rate when readily determinable. Lease terms may include the effect of options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.

As a lessee, the company accounts for the lease and non-lease components as a single lease component.

See Note 9 additional information about the company's leases.

Contract-related Balances

Current contract assets and noncurrent contract assets are included within other current assets and other assets, respectively, in the accompanying balance sheet. Noncurrent contract liabilities are included within other long-term liabilities in the accompanying balance sheet. Contract asset and liability balances are as follows:

	September 28,		December 31,
(In millions)	2019		2018
Current Contract Assets, Net	$	609	$	459
Noncurrent Contract Assets, Net	14		15
Current Contract Liabilities	943		809
Noncurrent Contract Liabilities	562		355

In the first nine months of 2019, the company recognized revenue of $654 million that was included in the contract liabilities balance at December 31, 2018. Contract assets increased in the first nine months of 2019 due to the timing of billing. Contract liabilities increased during the first nine months of 2019 primarily due to an advance payment from a customer and an acquisition.

Warranty Obligations

The liability for warranties is included in other accrued expenses in the accompanying balance sheet. The changes in the carrying amount of standard product warranty obligations are as follows:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Beginning Balance	$	92		$	87
Provision charged to income	80			89
Usage	(83		)	(80		)
Adjustments to previously provided warranties, net	(1		)	(3		)
Currency translation	(2		)	(2		)
Ending Balance	$	86		$	91

Inventories

The components of inventories are as follows:

	September 28,		December 31,
(In millions)	2019		2018
Raw Materials	$	943	$	812
Work in Process	514		430
Finished Goods	1,851		1,763
Inventories	$	3,308	$	3,005

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. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In August 2018, the FASB issued new guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The company expects to adopt the guidance when it is effective in 2020 using a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In August 2018, the FASB issued new guidance to modify the disclosure requirements on fair value measurements. The company expects to adopt the guidance when it is effective in 2020 with some items requiring a prospective method and others

requiring a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In June 2016, the FASB issued new guidance to require a financial asset measured at amortized cost basis, such as accounts receivable, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. During 2018 and 2019, the FASB issued additional guidance and clarification. The company expects to adopt the guidance when it is effective in 2020 using a modified retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements.

In February 2016, the FASB issued new guidance which requires lessees to record most leases on their balance sheets as lease liabilities, initially measured at the present value of the future lease payments, with corresponding right-of-use assets. The new guidance also sets forth new disclosure requirements related to leases. During 2017 - 2019, the FASB issued additional guidance and clarification. The guidance became effective for the company in 2019. The company has elected to adopt the guidance using a modified retrospective method, by applying the transition approach as of the beginning of the period of adoption. Comparative periods have not been restated. As permitted upon transition, the company did not reassess whether any expired or existing contracts were or contained embedded leases, the lease classification for any expired or existing leases, initial direct costs for any leases, or whether land easements met the definition of a lease if they were not accounted for as leases under the prior guidance. Adoption of the new guidance impacted the company’s Consolidated Balance Sheet as follows:

(In millions)	December 31, 2018 as Reported		Impact of Adopting New Lease Guidance		January 1, 2019 As Adopted
Other Assets	$	1,117	$	641	$	1,758
Other Accrued Expenses	1,470		132		1,602
Other Long-term Liabilities	2,515		505		3,020
Retained Earnings	18,696		4		18,700

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Other Expense, Net

9 Months Ended

Sep. 28, 2019

Other Income and Expenses [Abstract]

Other Expense, Net [Text Block]

Note 5.

Other Expense, Net

The components of other expense, net, in the accompanying statement of income are as follows:

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Interest Income	$	52		$	41		$	179		$	92
Interest Expense	(164		)	(162		)	(534		)	(495		)
Other Items, Net	(12		)	19			25			18
Other Expense, Net	$	(124	)	$	(102	)	$	(330	)	$	(385	)

Other Items, Net

In all periods, other items, net includes currency transaction gains and losses on monetary assets and liabilities and net periodic pension benefit cost/income, excluding the service cost component which is included in operating expenses on the accompanying statement of income.

In 2019, other items, net in the above table includes $42 million of losses on the early extinguishment of debt (see Note 8). As discussed in Note 15, the company incurred additional losses on the early extinguishment of debt in the fourth quarter of 2019.

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Leases

9 Months Ended

Sep. 28, 2019

Leases [Abstract]

Lessee, Operating Leases [Text Block]

Note 9.

Leases

As a lessee, the company leases certain logistics, office, and manufacturing facilities, as well as vehicles, copiers, and other equipment. These operating leases generally have remaining lease terms between 1 month and 30 years, and some include options to extend (generally for 1 to 10 years) or have options to terminate the arrangement within 1 year. The company’s finance leases are not material.

The company has guaranteed the residual value of three leased operating facilities with lease terms ending in 2020, 2023 and 2024. The company has agreed with the lessor to comply with certain financial covenants consistent with its other debt arrangements (Note 8). The aggregate maximum guarantee under these three lease arrangements is $147 million. Operating lease ROU assets and lease liabilities for these lease arrangements are recorded on the consolidated balance sheet as of September 28, 2019, but exclude any amounts for residual value guarantees.

As a lessee, the consolidated statement of income includes pre-tax operating lease costs of $51 million and $149 million and pre-tax variable lease costs of $10 million and $31 million for the three and nine months ended September 28, 2019, respectively. Lease costs arising from finance leases, short-term leases, and sublease income are not material.

Cash used in operating activities for payments of amounts included in the measurement of operating lease liabilities was $149 million in the nine months ended September 28, 2019. Operating lease ROU assets of $108 million were obtained in exchange for new operating lease liabilities in the nine months ended September 28, 2019.

The weighted-average remaining operating lease term was 6.3 years and the weighted average discount rate was 4.0% as of September 28, 2019.

ROU assets of $645 million as of September 28, 2019, are classified in other assets in the consolidated balance sheet. Operating lease liabilities of $158 million and $529 million as of September 28, 2019, are classified in other accrued expenses and other long-term liabilities, respectively, in the consolidated balance sheet.

As of September 28, 2019, future payments of operating lease liabilities are as follows:

(In millions)
Remainder of 2019	$	51
2020	180
2021	138
2022	106
2023	76
2024	55
2025 and Thereafter	175
Total Lease Payments	781
Less: Imputed Interest	94
Total Operating Lease Liability	$	687

As a lessor, operating leases, sales-type leases and direct financing leases are not material.

As previously disclosed in the company's 2018 Annual Report on Form 10-K and under previous lease accounting guidance, the following is a summary of annual future minimum lease and rental commitments under noncancelable operating leases as of December 31, 2018:

(In millions)
2019	$	192
2020	158
2021	118
2022	86
2023	58
2024 and Thereafter	177
	$	789

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Income Taxes Rate Reconciliation (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Effective Income Tax Rate Reconciliation, Amount [Abstract]
Statutory Federal Income Tax Rate			21.00%	21.00%
Provision for Income Taxes at Statutory Rate			$ 637	$ 473
Foreign rate differential			(172)	(177)
Foreign exchange loss on inter-company debt refinancing			(62)
Income tax credits			(242)	(183)
Global intangible low-taxed income			160	124
Foreign-derived intangible income			(68)	(34)
Withholding taxes			30
Singapore tax holiday			(20)	(29)
Transition tax and other impacts of U.S. tax reform			8	117
Provision for (reversal of) tax reserves, net			16	(49)
Excess tax benefits from stock options and restricted stock units			(68)	(59)
Basis difference on disposal of business			72	0
Other, net			47	27
Provision for income taxes	$ 62	$ 101	338	$ 210
Income Tax Provision Related to Gain of Sale of Business			191
US foreign tax credits generated by repatriation of foreign earnings			75
Unrecognized Tax Benefits, Decrease Resulting from Prior Period Tax Positions			7
Unrecognized Tax Benefits, Increase Resulting from Prior Period Tax Positions			35
Tax Cuts and Jobs Act, Income Tax Expense (Benefit)			$ 1
Singapore
Income Tax Holiday [Line Items]
Income Tax Holiday, Termination Date			Dec. 31, 2026
Effective Income Tax Rate Reconciliation, Tax Holiday, Percent			0.60%	1.30%
Income Tax Holiday, Income Tax Benefits Per Share			$ 0.05	$ 0.07

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Debt Short-term Financing (Details)	9 Months Ended
	Sep. 28, 2019 USD ($)
Revolving Credit Facility [Member]
Short-term Financing [Line Items]
Debt, Covenant, Maximum Consolidated Total Leverage Ratio of Debt to EBITDA	3.5
Debt, Covenant, Minimum Consolidated Interest Coverage Ratio	3.0
Maximum Borrowing Capacity	$ 2,500,000,000
Letters of Credit Outstanding, Amount	80,000,000
Line of Credit Facility, Amount Outstanding	$ 0
Commercial Paper Programs [Member]
Short-term Financing [Line Items]
Short-term Debt, Period to Maturity	41 days
Commercial Paper Programs [Member] | U.S. Commercial Paper Program [Member]
Short-term Financing [Line Items]
Maximum Period to Maturity Allowed Under Program	397 days
Commercial Paper Programs [Member] | Euro Commercial Paper Program [Member]
Short-term Financing [Line Items]
Maximum Period to Maturity Allowed Under Program	183 days

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Comprehensive Income (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	$ 28,729	$ 26,445	$ 27,586	$ 25,413
Other comprehensive items before reclassifications			(269)
Amounts reclassified from accumulated other comprehensive items			45
Total other comprehensive items	(92)	(28)	(224)	(428)
Balance	29,355	26,890	29,355	26,890
Currency Translation Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			(2,243)
Other comprehensive items before reclassifications			(222)
Amounts reclassified from accumulated other comprehensive items			30
Total other comprehensive items			(192)
Balance	(2,435)		(2,435)
Unrealized Losses on Hedging Instruments [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			(52)
Other comprehensive items before reclassifications			(38)
Amounts reclassified from accumulated other comprehensive items			7
Total other comprehensive items			(31)
Balance	(83)		(83)
Pension and Other Postretirement Benefit Liability Adjustment [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance			(203)
Other comprehensive items before reclassifications			(9)
Amounts reclassified from accumulated other comprehensive items			8
Total other comprehensive items			(1)
Balance	(204)		(204)
Accumulated Other Comprehensive Items [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Balance	(2,630)	(2,491)	(2,498)	(2,003)
Total other comprehensive items	(92)	(28)	(224)	(428)
Balance	$ (2,722)	$ (2,519)	$ (2,722)	$ (2,519)

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Fair Value Measurements, Derivative Instruments, Gains & Losses (Details) € in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019 USD ($)	Sep. 29, 2018 USD ($)	Sep. 28, 2019 USD ($)	Sep. 29, 2018 USD ($)	Sep. 28, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Derivative Instruments, Gain (Loss) [Line Items]
Unrealized losses on hedging instruments, net of tax	$ (38)	$ 0	$ (38)	$ 0
Interest Rate Swaps [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount Of Derivatives	3,100		3,100			$ 3,100
Cross Currency Interest Rate Contract [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount Of Derivatives	1,800		1,800			1,500
Currency Exchange Contracts [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Notional Amount Of Derivatives	5,693		5,693			$ 3,424
Currency Exchange Contracts [Member] | Cost of Product Revenues [Member] | Derivatives Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Derivative, Net	1	1		1
Currency Exchange Contracts [Member] | Other Expense, Net [Member] | Derivatives Not Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Derivative, Net	43	(2)	49	25
Fair Value Hedging [Member] | Interest Rate Swaps [Member] | Other Expense, Net [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Hedged Debt in Fair Value Hedge	(14)	8	(95)	60
Gain (Loss) on Derivative, Net	15	(8)	98	(57)
Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) in OCI on Cash Flow Hedge	(50)	0	(50)	0
Notional Amount Of Derivatives	900		900		€ 1,800
Payments for Hedge, Financing Activities			50
Cash Flow Hedging [Member] | Interest Rate Swaps [Member] | Other Expense, Net [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Cash Flow Hedge Reclassified from AOCI	(3)	(3)	(10)	(9)
Net Investment Hedging [Member] | Foreign currency-denominated debt [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) in Currency Translation Adjustment on Net Investment Hedge	261	50	320	250
Net Investment Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) in Currency Translation Adjustment on Net Investment Hedge	72	5	79	8
Net Investment Hedging [Member] | Cross Currency Interest Rate Contract [Member] | Other Expense, Net [Member] | Derivatives Designated as Hedging Instrument [Member]
Derivative Instruments, Gain (Loss) [Line Items]
Gain (Loss) on Derivative, Net	$ 13	$ 9	$ 41	$ 12

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Restructuring Reserves (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Restructuring Reserve [Roll Forward]
Beginning balance				$ 80
Cumulative Effect of Accounting Change	[1]			(28)
Costs incurred	[2]			37
Reserves reversed	[3]			(4)
Payments				(45)
Currency translation				(1)
Ending balance		$ 39		39
Loss (Gain) on Divestiture of Businesses				(486)	$ 0
Impairment of Acquired In-process Research and Development				6
Restructuring and other costs (income), net		31	$ (27)	(442)	$ 35
Restructuring and Related Costs, Other Costs (Income), Net				$ 2
Restructuring Reserve, Expected Final Year of Payments				2019
Charges For Cash Compensation Contractually Due To Employees Of Acquired Business [Member]
Restructuring Reserve [Roll Forward]
Restructuring and other costs (income), net				$ 3
Severance [Member]
Restructuring Reserve [Roll Forward]
Beginning balance				34
Costs incurred				25
Reserves reversed	[3]			(3)
Payments				(29)
Currency translation				(1)
Ending balance		26		26
Abandonment of Excess Facilities [Member]
Restructuring Reserve [Roll Forward]
Beginning balance				42
Cumulative Effect of Accounting Change	[1]			(28)
Costs incurred				3
Reserves reversed	[3]			(1)
Payments				(8)
Ending balance		8		8
Other Restructuring [Member]
Restructuring Reserve [Roll Forward]
Beginning balance	[4]			4
Costs incurred	[4]			9
Payments	[4]			(8)
Ending balance	[4]	$ 5		$ 5

[1] Impact of adopting new lease accounting guidance on January 1, 2019.

[2] Excludes $486 million net gain on the sale of businesses; $6 million of impairment of acquired in-process research and development; $3 million of compensation due to employees on the date of acquisition; and $2 million of other non-cash charges, net.

[3] Represents reductions in cost of plans.

[4] Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

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Revenue (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Disaggregation of Revenue [Line Items]
Revenues		$ 6,272	$ 5,920	$ 18,713	$ 17,851
North America [Member]
Disaggregation of Revenue [Line Items]
Revenues	[1]	3,220	3,030	9,509	8,975
Europe [Member]
Disaggregation of Revenue [Line Items]
Revenues	[1]	1,514	1,454	4,569	4,521
Asia Pacific [Member]
Disaggregation of Revenue [Line Items]
Revenues	[1]	1,349	1,251	4,080	3,809
Other Regions [Member]
Disaggregation of Revenue [Line Items]
Revenues	[1]	189	185	555	546
Consumables [Member]
Disaggregation of Revenue [Line Items]
Revenues		3,228	3,056	9,726	9,345
Instruments [Member]
Disaggregation of Revenue [Line Items]
Revenues		1,570	1,515	4,619	4,462
Service [Member]
Disaggregation of Revenue [Line Items]
Revenues		$ 1,474	$ 1,349	$ 4,368	$ 4,044

[1] Revenues are attributed to regions based on customer location.

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Inventories (Details) - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Inventory Disclosure [Abstract]
Raw Materials	$ 943	$ 812
Work in Process	514	430
Finished Goods	1,851	1,763
Inventories	$ 3,308	$ 3,005

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Consolidated Statement of Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Revenues
Revenues	$ 6,272	$ 5,920	$ 18,713	$ 17,851
Costs and Operating Expenses:
Selling, general and administrative expenses	1,539	1,490	4,632	4,547
Research and development expenses	247	240	741	716
Restructuring and other costs (income), net	31	(27)	(442)	35
Total costs and operating expenses	5,326	5,008	15,351	15,216
Operating Income	946	912	3,362	2,635
Other Expense, Net	(124)	(102)	(330)	(385)
Income Before Income Taxes	822	810	3,032	2,250
Provision for Income Taxes	(62)	(101)	(338)	(210)
Net Income	$ 760	$ 709	$ 2,694	$ 2,040
Earnings per Share
Basic (in dollars per share)	$ 1.89	$ 1.76	$ 6.73	$ 5.07
Diluted (in dollars per share)	$ 1.88	$ 1.75	$ 6.68	$ 5.03
Weighted Average Shares
Basic (in shares)	401	402	400	402
Diluted (in shares)	404	406	403	406
Product [Member]
Revenues
Revenues	$ 4,798	$ 4,571	$ 14,345	$ 13,807
Costs and Operating Expenses:
Cost of revenues	2,471	2,357	7,363	7,072
Service [Member]
Revenues
Revenues	1,474	1,349	4,368	4,044
Costs and Operating Expenses:
Cost of revenues	$ 1,038	$ 948	$ 3,057	$ 2,846

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Supplemental Cash Flow Information

9 Months Ended

Sep. 28, 2019

Supplemental Cash Flow Information [Abstract]

Supplemental Cash Flow Information [Text Block]

Note 13.

Supplemental Cash Flow Information

	Nine Months Ended
	September 28,		September 29,
(In millions)	2019		2018
Non-cash Investing and Financing Activities
Declared but unpaid dividends	$	77	$	69
Issuance of stock upon vesting of restricted stock units	179		167

Cash, cash equivalents and restricted cash is included in the consolidated balance sheet as follows:

	September 28,		December 31,
(In millions)	2019		2018
Cash and Cash Equivalents	$	1,273	$	2,103
Restricted Cash Included in Other Current Assets	31		12
Restricted Cash Included in Other Assets	1		2
Cash, Cash Equivalents and Restricted Cash	$	1,305	$	2,117

Amounts included in restricted cash represent funds held as collateral for bank guarantees and incoming cash in China awaiting government administrative clearance.

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Acquisitions and Dispositions (Policies)

9 Months Ended

Sep. 28, 2019

Business Combinations [Abstract]

Business Combinations Policy [Policy Text Block]

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. 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 use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

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. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

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Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) shares in Millions, $ in Millions	Total	Common Stock [Member]	Capital in Excess of Par Value [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Items [Member]
Balance (in shares) at Dec. 31, 2017		428			27
Balance at Dec. 31, 2017	$ 25,413	$ 428	$ 14,177	$ 15,914	$ (3,103)	$ (2,003)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes	30			118		(88)
Issuance of shares under employees' and directors' stock plans (in shares)		3			0
Issuance of shares under employees' and directors' stock plans	127	$ 3	185		$ (61)
Stock-based compensation	137		137
Purchases of company common stock (in shares)					1
Purchases of company common stock	(250)				$ (250)
Dividends declared	(206)			(206)
Net Income	2,040			2,040
Other comprehensive items	(428)					(428)
Other	27		27
Balance (in shares) at Sep. 29, 2018		431			28
Balance at Sep. 29, 2018	26,890	$ 431	14,526	17,866	$ (3,414)	(2,519)
Balance (in shares) at Jun. 30, 2018		430			27
Balance at Jun. 30, 2018	26,445	$ 430	14,408	17,226	$ (3,128)	(2,491)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares under employees' and directors' stock plans (in shares)		1
Issuance of shares under employees' and directors' stock plans	37	$ 1	72		$ (36)
Stock-based compensation	46		46
Purchases of company common stock (in shares)					1
Purchases of company common stock	(250)				$ (250)
Dividends declared	(69)			(69)
Net Income	709			709
Other comprehensive items	(28)					(28)
Balance (in shares) at Sep. 29, 2018		431			28
Balance at Sep. 29, 2018	26,890	$ 431	14,526	17,866	$ (3,414)	(2,519)
Balance (in shares) at Dec. 31, 2018		432			29
Balance at Dec. 31, 2018	27,586	$ 432	14,621	18,696	$ (3,665)	(2,498)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Cumulative effect of accounting changes	4			4		0
Issuance of shares under employees' and directors' stock plans (in shares)		2			1
Issuance of shares under employees' and directors' stock plans	136	$ 2	205		$ (71)
Stock-based compensation	138		138
Purchases of company common stock (in shares)					3
Purchases of company common stock	(750)				$ (750)
Dividends declared	(229)			(229)
Net Income	2,694			2,694
Other comprehensive items	(224)					(224)
Balance (in shares) at Sep. 28, 2019		434			33
Balance at Sep. 28, 2019	29,355	$ 434	14,964	21,165	$ (4,486)	(2,722)
Balance (in shares) at Jun. 29, 2019		433			33
Balance at Jun. 29, 2019	28,729	$ 433	14,887	20,482	$ (4,443)	(2,630)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Issuance of shares under employees' and directors' stock plans (in shares)		1			0
Issuance of shares under employees' and directors' stock plans	(7)	$ 1	35		$ (43)
Stock-based compensation	42		42
Dividends declared	(77)			(77)
Net Income	760			760
Other comprehensive items	(92)					(92)
Balance (in shares) at Sep. 28, 2019		434			33
Balance at Sep. 28, 2019	$ 29,355	$ 434	$ 14,964	$ 21,165	$ (4,486)	$ (2,722)

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Subsequent Events (Details) € in Millions, $ in Millions	1 Months Ended		9 Months Ended
	Oct. 31, 2019 USD ($)	Oct. 31, 2019 EUR (€)	Sep. 28, 2019 USD ($)	Sep. 29, 2018 USD ($)	Oct. 31, 2019 EUR (€)	Dec. 31, 2018 USD ($)
Subsequent Event [Line Items]
Total Borrowings at Par Value			$ 17,166			$ 19,186
Proceeds from Issuance of Long-term Debt			0	$ 690
Losses on Extinguishment of Debt			$ 42
Senior Notes [Member] | 6.00% 10-Year Senior Notes, Due 3/1/2020
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			6.00%
Debt Instrument, Term			10 years
Debt Instrument, Maturity Date			Mar. 01, 2020
Total Borrowings at Par Value			$ 750			750
Senior Notes [Member] | 1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			1.50%
Debt Instrument, Term			5 years
Debt Instrument, Maturity Date			Dec. 01, 2020
Total Borrowings at Par Value			$ 465			487
Senior Notes [Member] | 5.00% 10-Year Senior Notes, Due 1/15/2021
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			5.00%
Debt Instrument, Term			10 years
Debt Instrument, Maturity Date			Jan. 15, 2021
Total Borrowings at Par Value			$ 400			400
Senior Notes [Member] | 4.50% 10-Year Senior Notes, Due 3/1/2021
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			4.50%
Debt Instrument, Term			10 years
Debt Instrument, Maturity Date			Mar. 01, 2021
Total Borrowings at Par Value			$ 1,000			1,000
Senior Notes [Member] | 3.60% 10-Year Senior Notes, Due 8/15/2021
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			3.60%
Debt Instrument, Term			10 years
Debt Instrument, Maturity Date			Aug. 15, 2021
Total Borrowings at Par Value			$ 1,100			1,100
Senior Notes [Member] | 3.30% 7-Year Senior Notes, Due 2/15/2022
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage			3.30%
Debt Instrument, Term			7 years
Debt Instrument, Maturity Date			Feb. 15, 2022
Total Borrowings at Par Value			$ 800			$ 800
Subsequent Event [Member]
Subsequent Event [Line Items]
Proceeds from Issuance of Long-term Debt	$ 5,600
Payments for Hedge, Financing Activities	21
Proceeds from Hedge, Investing Activities	47
Losses on Extinguishment of Debt	$ 142
Subsequent Event [Member] | Senior Notes [Member] | 0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.125%				0.125%
Debt Instrument, Term	5 years 6 months	5 years 6 months
Debt Instrument, Maturity Date	Mar. 01, 2025	Mar. 01, 2025
Total Borrowings at Par Value | €					€ 800
Subsequent Event [Member] | Senior Notes [Member] | 0.500% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.50%				0.50%
Debt Instrument, Term	8 years 6 months	8 years 6 months
Debt Instrument, Maturity Date	Mar. 01, 2028	Mar. 01, 2028
Total Borrowings at Par Value | €					€ 800
Subsequent Event [Member] | Senior Notes [Member] | 2.600% 10-Year Senior Notes, Due 10/1/2029
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	2.60%				2.60%
Debt Instrument, Term	10 years	10 years
Debt Instrument, Maturity Date	Oct. 01, 2029	Oct. 01, 2029
Total Borrowings at Par Value	$ 900
Subsequent Event [Member] | Senior Notes [Member] | 0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	0.875%				0.875%
Debt Instrument, Term	12 years	12 years
Debt Instrument, Maturity Date	Oct. 01, 2031	Oct. 01, 2031
Total Borrowings at Par Value | €					€ 900
Subsequent Event [Member] | Senior Notes [Member] | 1.500% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.50%				1.50%
Debt Instrument, Term	20 years	20 years
Debt Instrument, Maturity Date	Oct. 01, 2039	Oct. 01, 2039
Total Borrowings at Par Value | €					€ 900
Subsequent Event [Member] | Senior Notes [Member] | 1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)
Subsequent Event [Line Items]
Debt Instrument, Interest Rate, Stated Percentage	1.875%				1.875%
Debt Instrument, Term	30 years	30 years
Debt Instrument, Maturity Date	Oct. 01, 2049	Oct. 01, 2049
Total Borrowings at Par Value | €					€ 1,000
Subsequent Event [Member] | Senior Notes [Member] | 6.00% 10-Year Senior Notes, Due 3/1/2020
Subsequent Event [Line Items]
Principal Value Redeemed	$ 750
Subsequent Event [Member] | Senior Notes [Member] | 1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)
Subsequent Event [Line Items]
Principal Value Redeemed | €		€ 425
Subsequent Event [Member] | Senior Notes [Member] | 5.00% 10-Year Senior Notes, Due 1/15/2021
Subsequent Event [Line Items]
Principal Value Redeemed	400
Subsequent Event [Member] | Senior Notes [Member] | 4.50% 10-Year Senior Notes, Due 3/1/2021
Subsequent Event [Line Items]
Principal Value Redeemed	1,000
Subsequent Event [Member] | Senior Notes [Member] | 3.60% 10-Year Senior Notes, Due 8/15/2021
Subsequent Event [Line Items]
Principal Value Redeemed	1,100
Subsequent Event [Member] | Senior Notes [Member] | 3.30% 7-Year Senior Notes, Due 2/15/2022
Subsequent Event [Line Items]
Principal Value Redeemed	$ 800

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Fair Value Measurements, Assets and Liabilities (Details) - Fair Value, Recurring [Member] - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Assets [Abstract]
Cash equivalents	$ 166	$ 769
Bank time deposits		2
Investments in common stock, mutual funds and other similar instruments	19	10
Warrants	6	8
Insurance contracts	130	113
Derivative contracts	114	31
Total Assets	435	933
Liabilities [Abstract]
Derivative contracts	44	145
Contingent consideration	55	37
Total Liabilities	99	182
Quoted Prices in Active Markets (Level I) [Member]
Assets [Abstract]
Cash equivalents	166	769
Bank time deposits		2
Investments in common stock, mutual funds and other similar instruments	19	10
Total Assets	185	781
Significant Other Observable Inputs (Level 2) [Member]
Assets [Abstract]
Warrants	6	8
Insurance contracts	130	113
Derivative contracts	114	31
Total Assets	250	152
Liabilities [Abstract]
Derivative contracts	44	145
Total Liabilities	44	145
Significant Unobservable Inputs (Level 3) [Member]
Liabilities [Abstract]
Contingent consideration	55	37
Total Liabilities	$ 55	$ 37

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Fair Value of Other Instruments (Details) - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	$ 18,216	$ 19,036
Long-term Debt	17,053	18,990
Senior Notes [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	17,513	18,322
Long-term Debt	16,350	18,276
Commercial Paper Programs [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	683	693
Long-term Debt	683	693
Other Debt [Member]
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Debt Instrument, Fair Value Disclosure	20	21
Long-term Debt	$ 20	$ 21

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Dispositions (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018	Dec. 31, 2018	Jun. 28, 2019
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Gain (Loss) on Disposition of Business			$ 486	$ 0
Revenues	$ 6,272	$ 5,920	18,713	$ 17,851
Current Assets	10,514		10,514		$ 10,625
Current Liabilities	$ 5,844		5,844		6,147
Anatomical Pathology business [Member] | Disposal Group, Held-for-sale, Not Discontinued Operations [Member]
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Disposal Group, Including Discontinued Operation, Consideration						$ 1,130
Gain (Loss) on Disposition of Business			482
Revenues			$ 115		238
Current Assets					81
Long-term Assets					528
Current Liabilities					34
Long-term Liabilities					$ 24

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Warranty Obligations (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018
Warranty Obligations [Roll Forward]
Beginning Balance	$ 92	$ 87
Provision charged to income	80	89
Usage	(83)	(80)
Adjustments to previously provided warranties, net	(1)	(3)
Currency translation	(2)	(2)
Ending Balance	$ 86	$ 91

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Restructuring and Other Costs (Income), Net

9 Months Ended

Sep. 28, 2019

Restructuring and Related Activities [Abstract]

Restructuring and Other Costs, Net [Text Block]

Note 14.

Restructuring and Other Costs (Income), Net

Restructuring and other costs (income), net, in the first nine months of 2019 primarily included the gain on the sale of the company's Anatomical Pathology business, and, to a lesser extent, transaction/integration costs related to acquisitions and a divestiture; sales of inventories revalued at the date of acquisition; and continuing charges for headcount reductions and facility consolidations in an effort to streamline operations, including the closure and consolidation of operations within several facilities in the U.S. and Europe. In the first nine months of 2019, severance actions associated with facility consolidations and cost reduction measures affected approximately 1% of the company’s workforce.

As of November 1, 2019, the company has identified restructuring actions that will result in additional charges of approximately $80 million, primarily in 2019 and 2020, and expects to identify additional actions during 2019 which will be recorded when specified criteria are met, such as communication of benefit arrangements or when the costs have been incurred.

During the third quarter of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net		Total
Life Sciences Solutions	$	5	$	—		$	3	$	8
Analytical Instruments	—		—			1		1
Specialty Diagnostics	—		—			23		23
Laboratory Products and Services	—		8			4		12
Corporate	—		(1		)	—		(1		)
	$	5	$	7		$	31	$	43

During the first nine months of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net			Total
Life Sciences Solutions	$	16	$	—		$	14		$	30
Analytical Instruments	—		24			10			34
Specialty Diagnostics	—		4			(480		)	(476		)
Laboratory Products and Services	—		27			12			39
Corporate	—		(1		)	2			1
	$	16	$	54		$	(442	)	$	(372	)

The principal components of net restructuring and other costs (income) by segment are as follows:

Life Sciences Solutions

In the first nine months of 2019, the Life Sciences Solutions segment recorded $30 million of net restructuring and other costs, principally charges to cost of revenues of $16 million for the sales of inventory revalued at the date of acquisition. The segment also recorded $14 million of restructuring and other charges for the impairment of acquired technology in development, and severance and other costs associated with facility consolidations in the U.S. and Europe.

Analytical Instruments

In the first nine months of 2019, the Analytical Instruments segment recorded $34 million of net restructuring and other charges, including $24 million of charges to selling, general, and administrative expense, principally transaction costs related to the acquisition of Gatan, subsequently terminated. The segment also recorded $10 million of restructuring and other costs, primarily for employee severance and other costs associated with facility consolidations in the U.S. and Europe.

Specialty Diagnostics

In the first nine months of 2019, the Specialty Diagnostics segment recorded $476 million of net restructuring and other income, primarily a gain on the divestiture of its Anatomical Pathology business (see Note 2). The segment also recorded $4 million of charges to selling, general, and administrative expense for transaction costs in connection with the sale of the Anatomical Pathology business.

Laboratory Products and Services

In the first nine months of 2019, the Laboratory Products and Services segment recorded $39 million of net restructuring and other charges. The segment recorded $27 million of charges to selling, general, and administrative expense, principally transaction costs related to the acquisition and integration of Brammer Bio. The segment also recorded $12 million of restructuring and other costs, primarily for employee severance at businesses streamlining operations and employee compensation due at Brammer Bio on the date of acquisition.

Corporate

In the first nine months of 2019, the company recorded $1 million of net restructuring and other costs for severance at its corporate operations, partially offset by income from favorable results of product liability litigation.

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs (income), net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.

(In millions)	Severance			Abandonment of Excess Facilities			Other (a)			Total
Balance at December 31, 2018	$	34		$	42		$	4		$	80
Cumulative effect of accounting change (b)	—			(28		)	—			(28		)
Costs incurred in 2019 (d)	25			3			9			37
Reserves reversed (c)	(3		)	(1		)	—			(4		)
Payments	(29		)	(8		)	(8		)	(45		)
Currency translation	(1		)	—			—			(1		)
Balance at September 28, 2019	$	26		$	8		$	5		$	39

(a) Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

(b) Impact of adopting new lease accounting guidance on January 1, 2019.

(c) Represents reductions in cost of plans.

(d) Excludes $486 million net gain on the sale of businesses; $6 million of impairment of acquired in-process research and development; $3 million of compensation due to employees on the date of acquisition; and $2 million of other non-cash charges, net.

The company expects to pay accrued restructuring costs primarily through 2019.

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Nature of Operations and Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 28, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Contract with Customer, Asset and Liability [Table Text Block]

Contract asset and liability balances are as follows:

	September 28,		December 31,
(In millions)	2019		2018
Current Contract Assets, Net	$	609	$	459
Noncurrent Contract Assets, Net	14		15
Current Contract Liabilities	943		809
Noncurrent Contract Liabilities	562		355

Warranty Obligations [Table Text Block]

Warranty Obligations

The liability for warranties is included in other accrued expenses in the accompanying balance sheet. The changes in the carrying amount of standard product warranty obligations are as follows:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Beginning Balance	$	92		$	87
Provision charged to income	80			89
Usage	(83		)	(80		)
Adjustments to previously provided warranties, net	(1		)	(3		)
Currency translation	(2		)	(2		)
Ending Balance	$	86		$	91

Inventories [Table Text Block]

Inventories

The components of inventories are as follows:

	September 28,		December 31,
(In millions)	2019		2018
Raw Materials	$	943	$	812
Work in Process	514		430
Finished Goods	1,851		1,763
Inventories	$	3,308	$	3,005

Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]

(In millions)	December 31, 2018 as Reported		Impact of Adopting New Lease Guidance		January 1, 2019 As Adopted
Other Assets	$	1,117	$	641	$	1,758
Other Accrued Expenses	1,470		132		1,602
Other Long-term Liabilities	2,515		505		3,020
Retained Earnings	18,696		4		18,700

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Consolidated Statement of Shareholders' Equity Consolidated Statement of Shareholders' Equity (Unaudited) (Parenthetical) - $ / shares	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Cash Dividends Declared per Common Share (in dollars per share)	$ 0.19	$ 0.17	$ 0.57	$ 0.51

XML

Document and Entity Information	9 Months Ended
	Sep. 28, 2019 shares
Entity Listings [Line Items]
Entity Central Index Key	0000097745
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 28, 2019
Document Transition Report	false
Entity File Number	1-8002
Entity Registrant Name	THERMO FISHER SCIENTIFIC INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	04-2209186
Entity Address, Address Line One	168 Third Avenue
Entity Address, City or Town	Waltham
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02451
City Area Code	781
Local Phone Number	622-1000
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	400,991,227
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2019
Document Fiscal Period Focus	Q3
Common Stock, $1.00 par value
Entity Listings [Line Items]
Title of 12(b) Security	Common Stock, $1.00 par value
Trading Symbol	TMO
Security Exchange Name	NYSE
Floating Rate Notes due 2020
Entity Listings [Line Items]
Title of 12(b) Security	Floating Rate Notes due 2020
Trading Symbol	TMO /20A
Security Exchange Name	NYSE
2.150% Notes due 2022
Entity Listings [Line Items]
Title of 12(b) Security	2.150% Notes due 2022
Trading Symbol	TMO 22A
Security Exchange Name	NYSE
0.750% Notes due 2024
Entity Listings [Line Items]
Title of 12(b) Security	0.750% Notes due 2024
Trading Symbol	TMO 24A
Security Exchange Name	NYSE
0.125% Notes due 2025
Entity Listings [Line Items]
Title of 12(b) Security	0.125% Notes due 2025
Trading Symbol	TMO 25B
Security Exchange Name	NYSE
2.000% Notes due 2025
Entity Listings [Line Items]
Title of 12(b) Security	2.000% Notes due 2025
Trading Symbol	TMO 25
Security Exchange Name	NYSE
1.400% Notes due 2026
Entity Listings [Line Items]
Title of 12(b) Security	1.400% Notes due 2026
Trading Symbol	TMO 26A
Security Exchange Name	NYSE
1.450% Notes due 2027
Entity Listings [Line Items]
Title of 12(b) Security	1.450% Notes due 2027
Trading Symbol	TMO 27
Security Exchange Name	NYSE
0.500% Notes due 2028
Entity Listings [Line Items]
Title of 12(b) Security	0.500% Notes due 2028
Trading Symbol	TMO 28A
Security Exchange Name	NYSE
1.375% Notes due 2028
Entity Listings [Line Items]
Title of 12(b) Security	1.375% Notes due 2028
Trading Symbol	TMO 28
Security Exchange Name	NYSE
1.950% Notes due 2029
Entity Listings [Line Items]
Title of 12(b) Security	1.950% Notes due 2029
Trading Symbol	TMO 29
Security Exchange Name	NYSE
0.875% Notes due 2031
Entity Listings [Line Items]
Title of 12(b) Security	0.875% Notes due 2031
Trading Symbol	TMO 31
Security Exchange Name	NYSE
2.875% Notes due 2037
Entity Listings [Line Items]
Title of 12(b) Security	2.875% Notes due 2037
Trading Symbol	TMO 37
Security Exchange Name	NYSE
1.500% Notes due 2039
Entity Listings [Line Items]
Title of 12(b) Security	1.500% Notes due 2039
Trading Symbol	TMO 39
Security Exchange Name	NYSE
1.875% Notes due 2049
Entity Listings [Line Items]
Title of 12(b) Security	1.875% Notes due 2049
Trading Symbol	TMO 49
Security Exchange Name	NYSE

XML

Consolidated Statement of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Currency translation adjustment:
Currency translation adjustment (net of tax provision of $77, $13, $92 and $60)	$ (91)	$ (32)	$ (222)	$ (447)
Reclassification adjustment for losses included in net income	30	0	30	0
Unrealized gains and losses on hedging instruments:
Unrealized losses on hedging instruments (net of tax benefit of $12, $0, $12 and $0)	(38)	0	(38)	0
Reclassification adjustment for losses included in net income (net of tax benefit of $1, $1, $3 and $3)	2	2	7	6
Pension and other postretirement benefit liability adjustments:
Pension and other postretirement benefit liability adjustments arising during the period (net of tax provision (benefit) of $2, $0, ($2) and $1)	2	0	(9)	3
Amortization of net loss included in net periodic pension cost (net of tax benefit of $0, $0, $2 and $3)	3	2	8	10
Total other comprehensive items	(92)	(28)	(224)	(428)
Net Income	760	709	2,694	2,040
Comprehensive Income	$ 668	$ 681	$ 2,470	$ 1,612

XML

Comprehensive Income (Tables)

9 Months Ended

Sep. 28, 2019

Stockholders' Equity Note [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

Changes in each component of accumulated other comprehensive items, net of tax, are as follows: 

(In millions)	Currency Translation Adjustment			Unrealized Losses on Hedging Instruments			Pension and Other Postretirement Benefit Liability Adjustment			Total
Balance at December 31, 2018	$	(2,243	)	$	(52	)	$	(203	)	$	(2,498	)
Other comprehensive items before reclassifications	(222		)	(38		)	(9		)	(269		)
Amounts reclassified from accumulated other comprehensive items	30			7			8			45
Net other comprehensive items	(192		)	(31		)	(1		)	(224		)
Balance at September 28, 2019	$	(2,435	)	$	(83	)	$	(204	)	$	(2,722	)

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Income Taxes (Tables)

9 Months Ended

Sep. 28, 2019

Income Tax Disclosure [Abstract]

Schedule of Effective Income Tax Rate Reconciliation [Table Text Block]

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Statutory Federal Income Tax Rate	21		%	21		%
Provision for Income Taxes at Statutory Rate	$	637		$	473
Increases (Decreases) Resulting From:
Foreign rate differential	(172		)	(177		)
Foreign exchange loss on inter-company debt refinancing	(62		)	—
Income tax credits	(242		)	(183		)
Global intangible low-taxed income	160			124
Foreign-derived intangible income	(68		)	(34		)
Withholding taxes	30			—
Singapore tax holiday	(20		)	(29		)
Transition tax and other impacts of U.S. tax reform	8			117
Provision for (reversal of) tax reserves, net	16			(49		)
Excess tax benefits from stock options and restricted stock units	(68		)	(59		)
Basis difference on disposal of business	72			—
Other, net	47			27
Provision for income taxes	$	338		$	210

Summary of Income Tax Contingencies [Table Text Block]

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

(In millions)	2019
Balance at Beginning of Year	$	1,442
Additions for tax positions of current year	6
Additions for tax positions of prior years	35
Reductions for tax positions of prior years	(7		)
Settlements	(5		)
Balance at End of Period	$	1,471

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Commitments and Contingencies

9 Months Ended

Sep. 28, 2019

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies [Text Block]

Note 10.

Commitments and Contingencies

Environmental Matters

The company is currently involved in various stages of investigation and remediation related to environmental matters. The company cannot predict all potential costs related to environmental remediation matters and the possible impact on future operations given the uncertainties regarding the extent of the required cleanup, the complexity and interpretation of applicable laws and regulations, the varying costs of alternative cleanup methods and the extent of the company’s responsibility. Expenses for environmental remediation matters related to the costs of installing, operating and maintaining groundwater-treatment systems and other remedial activities related to historical environmental contamination at the company’s domestic and international facilities were not material in any period presented. The company records accruals for environmental remediation liabilities, based on current interpretations of environmental laws and regulations, when it is probable that a liability has been incurred and the amount of such liability can be reasonably estimated. The company calculates estimates based upon several factors, including reports prepared by environmental specialists and management’s knowledge of and experience with these environmental matters. The company includes in these estimates potential costs for investigation, remediation and operation and maintenance of cleanup sites. At September 28, 2019, the company’s total environmental liability was approximately $63 million. While management believes the accruals for environmental remediation are adequate based on current estimates of remediation costs, the company may be subject to additional remedial or compliance costs due to future events such as changes in existing laws and regulations, changes in agency direction or enforcement policies, developments in remediation technologies or changes in the conduct of the company’s operations, which could have a material adverse effect on the company’s financial position, results of operations or cash flows.

Litigation and Related Contingencies

There are various lawsuits and claims pending against the company including matters involving product liability, intellectual property, employment and commercial issues. The company determines the probability and range of possible loss based on the current status of each of these matters. A liability is recorded in the financial statements if it is believed to be probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The company establishes a liability that is an estimate of amounts expected to be paid in the future for events that have already occurred. The company accrues the most likely amount or at least the minimum of the range of probable loss when a range of probable loss can be estimated. The accrued liabilities are based on management’s judgment as to the probability of losses for asserted and unasserted claims and, where applicable, actuarially determined estimates. Accrual estimates are adjusted as additional information becomes known or payments are made. The amount of ultimate loss may differ from these estimates. Due to the inherent uncertainties associated with pending litigation or claims, the company cannot predict the outcome, nor, with respect to certain pending litigation or claims where no liability has been accrued, make a meaningful estimate of the reasonably possible loss or range of loss that could result from an unfavorable outcome. The company has no material accruals for pending litigation or claims for which accrual amounts are not disclosed below or in the company's 2018 financial statements and notes included in the company's Annual Report on Form 10-K filed with the SEC, nor are material losses deemed probable for such matters. It is reasonably possible, however, that an unfavorable outcome that exceeds the company’s current accrual estimate, if any, for one or more of the matters described below could have a material adverse effect on the company’s results of operations, financial position and cash flows.

Product Liability, Workers Compensation and Other Personal Injury Matters

For product liability, workers compensation and other personal injury matters, the company accrues the most likely amount or at least the minimum of the range of possible loss when a range of possible loss can be estimated. The company records estimated amounts due from insurers related to certain product liabilities as an asset. Although the company believes that the amounts accrued and estimated recoveries are probable and appropriate based on available information, including actuarial studies of loss estimates, the process of estimating losses and insurance recoveries involves a considerable degree of judgment by management and the ultimate amounts could vary materially. Insurance contracts do not relieve the company of its primary obligation with respect to any losses incurred. The collectability of amounts due from its insurers is subject to the solvency and willingness of the insurer to pay, as well as the legal sufficiency of the insurance claims. Management monitors the payment history as well as the financial condition and ratings of its insurers on an ongoing basis.

Intellectual Property Matters

On June 3, 2013, Unisone Strategic IP filed a complaint against Life Technologies in the United States District Court for the Southern District of California alleging patent infringement by Life Technologies’ supply chain management system software, which operates with product "supply centers" installed at customer sites. Plaintiff seeks damages for alleged willful infringement, attorneys’ fees, costs, and injunctive relief. On August 24, 2017, Unisone filed an appeal from a decision by the Patent Trial and Appeal Board (PTAB) that found the challenged patent claims invalid. The United States Court of Appeals for the Federal Circuit upheld the PTAB’s ruling finding the challenged claims in the Unisone patent invalid. Unisone had until March 11, 2019 to file an appeal with the United States Supreme Court. Unisone did not appeal that decision, and consequently the case before the United States District Court, which had been stayed pending the outcome of the PTAB decision, has resumed with respect to similar Unisone patent claims that were not included in the PTAB proceeding.

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Acquisitions and Dispositions

9 Months Ended

Sep. 28, 2019

Business Combinations [Abstract]

Acquisitions and Dispositions [Text Block]

Note 2.

Acquisitions and Dispositions

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. 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 use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

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. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

On April 30, 2019, the company acquired, within the Laboratory Products and Services segment, Brammer Bio for approximately $1.67 billion in cash. Brammer Bio is a leading viral vector contract development and manufacturing organization for gene and cell therapies. The acquisition expands the segment's contract manufacturing capabilities. Revenues of Brammer Bio were approximately $140 million in 2018. The purchase price exceeded the fair value of the identifiable net assets and, accordingly, $938 million was allocated to goodwill, $405 million of which is tax deductible.

In addition, in the nine months ended September 28, 2019 the company acquired, within the Analytical Instruments segment, a Slovakia-based provider of mass spectrometry software used for identification of compounds, for an aggregate purchase price of $14 million.

The components of the purchase price and net assets acquired for Brammer Bio are as follows:

(In millions)	Brammer Bio
Purchase Price
Cash paid	$	1,710
Cash acquired	(36		)
	$	1,674
Net Assets Acquired
Current assets	$	52
Property, plant and equipment	147
Definite-lived intangible assets:
Customer relationships	744
Product technology	65
Tradenames	7
Goodwill	938
Other assets	49
Contract liabilities	(109		)
Deferred tax liabilities	(111		)
Other liabilities assumed	(108		)
	$	1,674

The weighted-average amortization periods for definite-lived intangible assets acquired in 2019 are 14 years for customer relationships, 13 years for product technology and 2 years for tradenames. The weighted average amortization period for all definite-lived intangible assets acquired in 2019 is 14 years.

Disposition

On June 28, 2019, the company sold its Anatomical Pathology business to PHC Holdings Corporation for $1.13 billion, net of cash divested. The business was part of the Specialty Diagnostics segment. The sale of this business resulted in a pre-tax gain of approximately $482 million, included in restructuring and other (income) costs, net. Revenues in 2019, through the date of sale, and the full year 2018 of the business sold were approximately $115 million and $238 million, respectively, net of retained sales through the company's healthcare market and research and safety market channel businesses. The assets and liabilities of the Anatomical Pathology business were as follows on December 31, 2018:

(In millions)	December 31, 2018
Current Assets	$	81
Long-term Assets	528
Current Liabilities	34
Long-term Liabilities	24

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Income Taxes

9 Months Ended

Sep. 28, 2019

Income Tax Disclosure [Abstract]

Income Taxes [Text Block]

Note 6.

Income Taxes

The provision for income taxes in the accompanying statement of income differs from the provision calculated by applying the statutory federal income tax rate to income before provision for income taxes due to the following:

	Nine Months Ended
	September 28,			September 29,
(In millions)	2019			2018
Statutory Federal Income Tax Rate	21		%	21		%
Provision for Income Taxes at Statutory Rate	$	637		$	473
Increases (Decreases) Resulting From:
Foreign rate differential	(172		)	(177		)
Foreign exchange loss on inter-company debt refinancing	(62		)	—
Income tax credits	(242		)	(183		)
Global intangible low-taxed income	160			124
Foreign-derived intangible income	(68		)	(34		)
Withholding taxes	30			—
Singapore tax holiday	(20		)	(29		)
Transition tax and other impacts of U.S. tax reform	8			117
Provision for (reversal of) tax reserves, net	16			(49		)
Excess tax benefits from stock options and restricted stock units	(68		)	(59		)
Basis difference on disposal of business	72			—
Other, net	47			27
Provision for income taxes	$	338		$	210

The company has operations and a taxable presence in approximately 50 countries outside the U.S. Some of these countries have lower tax rates than the U.S. The company’s ability to obtain a benefit from lower tax rates outside the U.S. is dependent on its relative levels of income in countries outside the U.S. and on the statutory tax rates in those countries.

In 2019, the company recorded a $62 million income tax benefit related to a foreign exchange loss for tax purposes on certain intercompany financing arrangements as well as a tax provision of $191 million related to the gain on sale of the Anatomical Pathology business. In addition, the company implemented foreign tax credit planning in Sweden which resulted in $75 million of foreign tax credits, with no related incremental U.S. income tax expense.

During 2019, the company recorded a net tax provision of $1 million to adjust the impacts of U.S. tax reform based on final regulations issued by the U.S. Treasury in 2019. The income tax provision consists of an incremental charge of $8 million offset by a $7 million reduction of related unrecognized tax benefits.

The company has significant operations in Singapore and has received considerable tax incentives. The local taxing authority granted the company pioneer company status which provides an incentive encouraging companies to undertake activities that have the effect of promoting economic or technological development in Singapore. This incentive equates to a tax exemption on earnings associated with most of the company’s manufacturing activities in Singapore and continues through December 31, 2026. In 2019 and 2018, the impact of this tax holiday decreased the annual effective tax rates by 0.6 percentage points and 1.3 percentage points, respectively, and increased diluted earnings per share by approximately $0.05 and $0.07, respectively.

Unrecognized Tax Benefits

As of September 28, 2019, the company had $1.47 billion of unrecognized tax benefits substantially all of which, if recognized, would reduce the effective tax rate.

A reconciliation of the beginning and ending amounts of unrecognized tax benefits is as follows:

(In millions)	2019
Balance at Beginning of Year	$	1,442
Additions for tax positions of current year	6
Additions for tax positions of prior years	35
Reductions for tax positions of prior years	(7		)
Settlements	(5		)
Balance at End of Period	$	1,471

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Income Taxes - Unrecognized Tax Benefits (Details) $ in Millions	9 Months Ended
	Sep. 28, 2019 USD ($)
Reconciliation of Unrecognized Tax Benefits [Roll Forward]
Balance at beginning of year	$ 1,442
Additions for tax positions of current year	6
Additions for tax positions of prior years	35
Reductions for tax positions of prior years	(7)
Settlements	(5)
Balance at end of year	$ 1,471

XML

Debt, Interest Rate Swap Arrangements (Details) - USD ($) $ in Millions		Sep. 28, 2019	Dec. 31, 2018
Interest Rate Swaps [Member]
Debt Instrument [Line Items]
Notional Amount Of Derivatives		$ 3,100	$ 3,100
Interest Rate Swap, Pay Rate at Period End		4.50%
Cross Currency Interest Rate Contract [Member]
Debt Instrument [Line Items]
Notional Amount Of Derivatives		$ 1,800	$ 1,500
Interest Rate Swap, Pay Rate at Period End		1.78%
Senior Notes [Member] | 4.50% Senior Notes Due 2021 [Member] | Interest Rate Swaps [Member]
Debt Instrument [Line Items]
Notional Amount Of Derivatives	[1]	$ 1,000
Interest Rate Swap, Pay Rate Spread above One-month LIBOR		3.442%
Interest Rate Swap, Pay Rate at Period End	[1]	5.531%
Interest Rate Swap, Fixed Receive Rate		4.50%
Senior Notes [Member] | 3.60% Senior Notes Due 2021 [Member] | Interest Rate Swaps [Member]
Debt Instrument [Line Items]
Notional Amount Of Derivatives	[1]	$ 1,100
Interest Rate Swap, Pay Rate Spread above One-month LIBOR		2.515%
Interest Rate Swap, Pay Rate at Period End	[1]	4.5425%
Interest Rate Swap, Fixed Receive Rate		3.60%
Senior Notes [Member] | 3.00% Senior Notes Due 2023 [Member] | Interest Rate Swaps [Member]
Debt Instrument [Line Items]
Notional Amount Of Derivatives	[1]	$ 1,000
Interest Rate Swap, Pay Rate Spread above One-month LIBOR		1.764%
Interest Rate Swap, Pay Rate at Period End	[1]	3.7915%
Interest Rate Swap, Fixed Receive Rate		3.00%

[1] The payments on $1.8 billion notional value of these interest rate swaps are offset in part by cross-currency interest rate swaps which effectively reduced the pay rate as of September 28, 2019 from a weighted average of 4.50% to a weighted average of 1.78%.

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Revenue Performance Obligations (Details) $ in Millions	Sep. 28, 2019 USD ($)
Revenue from Contract with Customer [Abstract]
Revenue, Remaining Performance Obligation, Amount	$ 6,760
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2019-09-28
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue, Remaining Performance Obligation, Percentage	70.00%
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period	12 months

XML

Recent Accounting Pronouncements (Details) - USD ($) $ in Millions	Sep. 28, 2019	Jan. 01, 2019	Dec. 31, 2018
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other Assets	$ 1,860	$ 1,758	$ 1,117
Other accrued expenses	1,698	1,602	1,470
Other Long-term Liabilities	3,137	3,020	2,515
Retained earnings	$ 21,165	18,700	$ 18,696
Impact of Adopting New Lease Guidance [Member]
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Other Assets		641
Other accrued expenses		132
Other Long-term Liabilities		505
Retained earnings		$ 4

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Subsequent Events Subsequent Events (Tables)

9 Months Ended

Sep. 28, 2019

Subsequent Events [Abstract]

Schedule of Subsequent Events [Table Text Block]

2019, the company issued the following senior notes:

(In millions)	Principal Value Issued
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)	€	800
0.500% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)	€	800
2.600% 10-Year Senior Notes, Due 10/1/2029	$	900
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)	€	900
1.500% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)	€	900
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)	€	1,000

The company is using the proceeds to repay commercial paper obligations and to redeem the following senior notes:

(In millions)	Principal Value Redeemed
6.00% 10-Year Senior Notes, Due 3/1/2020	$	750
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	€	425
5.00% 10-Year Senior Notes, Due 1/15/2021	$	400
4.50% 10-Year Senior Notes, Due 3/1/2021	$	1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	$	1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	$	800

XML

Fair Value Measurements, Derivative Assets & Liabilities (Details) - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Derivatives, Fair Value [Line Items]
Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability	$ (10)	$ (93)
Long-term Obligations [Member]
Derivatives, Fair Value [Line Items]
Hedged Liability, Fair Value Hedge	3,078	3,291
Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability	(10)	(93)
Hedged Liability, Discontinued Fair Value Hedge, Cumulative Increase (Decrease)	20	30
Interest Rate Swaps [Member]
Derivatives, Fair Value [Line Items]
Notional Amount Of Derivatives	3,100	3,100
Interest Rate Swaps [Member] | Derivatives Designated as Hedging Instrument [Member] | Other Long-term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	31	129
Cross Currency Interest Rate Contract [Member]
Derivatives, Fair Value [Line Items]
Notional Amount Of Derivatives	1,800	1,500
Cross Currency Interest Rate Contract [Member] | Derivatives Designated as Hedging Instrument [Member] | Other Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	107	28
Currency Exchange Contracts [Member]
Derivatives, Fair Value [Line Items]
Notional Amount Of Derivatives	5,693	3,424
Currency Exchange Contracts [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Other Current Assets [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	7	3
Currency Exchange Contracts [Member] | Derivatives Not Designated as Hedging Instrument [Member] | Other Accrued Expenses [Member]
Derivatives, Fair Value [Line Items]
Derivative Liabilities	13	16
Fair Value, Recurring [Member]
Derivatives, Fair Value [Line Items]
Derivative Assets	114	31
Derivative Liabilities	$ 44	$ 145

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Restructuring and Other Costs (Income), Net (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018	Nov. 01, 2019
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Cost, Percentage of Total Workforce Eliminated less than				1.00%
Cost of Revenues		$ 5		$ 16
Selling, General and Administrative Expenses		7		54
Restructuring and other costs (income), net		31	$ (27)	(442)	$ 35
Total Restructuring and Other Costs (Income), Net		43		(372)
Restructuring and Related Costs, Cash Costs	[1]			37
Restructuring and Related Costs, Other Costs (Income), Net				2
Impairment of Acquired In-process Research and Development				6
Loss (Gain) on Divestiture of Businesses				$ (486)	$ 0
Disposal Group, Not Discontinued Operation, Gain (Loss) on Disposal, Statement of Income [Extensible List]				tmo:RestructuringAndOtherCostsIncomeNet
Severance [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Costs, Cash Costs				$ 25
Charges For Cash Compensation Contractually Due To Employees Of Acquired Business [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and other costs (income), net				3
Abandonment of Excess Facilities [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Costs, Cash Costs				3
Other Restructuring [Member]
Restructuring Cost and Reserve [Line Items]
Restructuring and Related Costs, Cash Costs	[2]			9
Life Sciences Solutions [Member]
Restructuring Cost and Reserve [Line Items]
Cost of Revenues		5		16
Restructuring and other costs (income), net		3		14
Total Restructuring and Other Costs (Income), Net		8		30
Analytical Instruments [Member]
Restructuring Cost and Reserve [Line Items]
Selling, General and Administrative Expenses				24
Restructuring and other costs (income), net		1		10
Total Restructuring and Other Costs (Income), Net		1		34
Specialty Diagnostics [Member]
Restructuring Cost and Reserve [Line Items]
Selling, General and Administrative Expenses				4
Restructuring and other costs (income), net		23		(480)
Total Restructuring and Other Costs (Income), Net		23		(476)
Laboratory Products and Services [Member]
Restructuring Cost and Reserve [Line Items]
Selling, General and Administrative Expenses		8		27
Restructuring and other costs (income), net		4		12
Total Restructuring and Other Costs (Income), Net		12		39
Corporate [Member]
Restructuring Cost and Reserve [Line Items]
Selling, General and Administrative Expenses		(1)		(1)
Restructuring and other costs (income), net				2
Total Restructuring and Other Costs (Income), Net		$ (1)		$ 1
Forecast [Member]
Restructuring Cost and Reserve [Line Items]
Identified Future Restructuring Costs						$ 80

[1] Excludes $486 million net gain on the sale of businesses; $6 million of impairment of acquired in-process research and development; $3 million of compensation due to employees on the date of acquisition; and $2 million of other non-cash charges, net.

[2] Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

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Fair Value Measurements and Fair Value of Financial Instruments

9 Months Ended

Sep. 28, 2019

Fair Value Disclosures [Abstract]

Fair Value Measurements and Fair Value of Financial Instruments [Text Block]

Note 12.

Fair Value Measurements and Fair Value of Financial Instruments

Fair Value Measurements

The company uses the market approach technique to value its financial instruments and there were no changes in valuation techniques during 2019. The company’s financial assets and liabilities carried at fair value are primarily comprised of insurance contracts, investments in money market funds, derivative contracts, mutual funds holding publicly traded securities and other investments in unit trusts held as assets to satisfy outstanding deferred compensation and retirement liabilities; and acquisition-related contingent consideration.

The fair value accounting guidance requires that assets and liabilities carried at fair value be classified and disclosed in one of the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities that the company has the ability to access.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data such as quoted prices, interest rates and yield curves.

Level 3: Inputs are unobservable data points that are not corroborated by market data.

The following tables present information about the company’s financial assets and liabilities measured at fair value on a recurring basis as of September 28, 2019 and December 31, 2018:

	September 28,		Quoted Prices in Active Markets		Significant Other Observable  Inputs		Significant Unobservable Inputs
(In millions)	2019		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	166	$	166	$	—	$	—
Investments in common stock, mutual funds and other similar instruments	19		19		—		—
Warrants	6		—		6		—
Insurance contracts	130		—		130		—
Derivative contracts	114		—		114		—
Total Assets	$	435	$	185	$	250	$	—
Liabilities
Derivative contracts	$	44	$	—	$	44	$	—
Contingent consideration	55		—		—		55
Total Liabilities	$	99	$	—	$	44	$	55

	December 31,		Quoted Prices in  Active Markets		Significant Other Observable  Inputs		Significant  Unobservable  Inputs
(In millions)	2018		(Level 1)		(Level 2)		(Level 3)
Assets
Cash equivalents	$	769	$	769	$	—	$	—
Bank time deposits	2		2		—		—
Investments in mutual funds and other similar instruments	10		10		—		—
Warrants	8		—		8		—
Insurance contracts	113		—		113		—
Derivative contracts	31		—		31		—
Total Assets	$	933	$	781	$	152	$	—
Liabilities
Derivative contracts	$	145	$	—	$	145	$	—
Contingent consideration	37		—		—		37
Total Liabilities	$	182	$	—	$	145	$	37

The company uses the Black-Scholes model to value its warrants. The company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer. The fair value of derivative contracts is the estimated amount that the company would receive/pay upon liquidation of the contracts, taking into account the change in interest rates and currency exchange rates. The company determines the fair value of acquisition-related contingent consideration based on the probability-weighted discounted cash flows associated with such future payments. Changes to the fair value of contingent consideration are recorded in selling, general and administrative expense. The following table provides a rollforward of the fair value, as determined by level 3 inputs, of the contingent consideration.

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Contingent Consideration
Beginning Balance	$	58		$	40		$	37		$	35
Acquisitions (including assumed balances)	—			—			24			11
Payments	(3		)	(3		)	(3		)	(8		)
Change in fair value included in earnings	—			(3		)	(3		)	(4		)
Ending Balance	$	55		$	34		$	55		$	34

Derivative Contracts

The following table provides the aggregate notional value of outstanding derivative contracts.

	September 28,		December 31,
(In millions)	2019		2018
Notional Amount
Interest rate swaps (described in Note 8)	$	3,100	$	3,100
Cross-currency interest rate swaps - designated as net investment hedges	1,800		1,500
Currency exchange contracts	5,693		3,424

As discussed in Note 15, early in the fourth quarter of 2019, the company settled certain of its interest rate swaps and cross-currency interest rate swaps upon the redemption of the related debt securities.

While certain derivatives are subject to netting arrangements with counterparties, the company does not offset derivative assets and liabilities within the consolidated balance sheet. The following tables present the fair value of derivative instruments in the consolidated balance sheet and statement of income.

	Fair Value – Assets				Fair Value – Liabilities
	September 28,		December 31,		September 28,		December 31,
(In millions)	2019		2018		2019		2018
Derivatives Designated as Hedging Instruments
Interest rate swaps (a)	$	—	$	—	$	31	$	129
Cross-currency interest rate swaps (b)	107		28		—		—
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts (c)	7		3		13		16
Total Derivatives	$	114	$	31	$	44	$	145

(a) The fair value of the interest rate swaps is included in the consolidated balance sheet under the caption other long-term liabilities.

(b) The fair value of the cross-currency interest rate swaps is included in the consolidated balance sheet under the caption other assets.

(c) The fair value of the currency exchange contracts is included in the consolidated balance sheet under the captions other current assets or other accrued expenses.

The following amounts related to cumulative basis adjustments for fair value hedges were included in the consolidated balance sheet under the caption long-term obligations:

	Carrying Amount of the Hedged Liability				Cumulative Amount of Fair Value Hedging Adjustment - Increase (Decrease) Included in Carrying Amount of Liability (d)
	September 28,		December 31,		September 28,			December 31,
(In millions)	2019		2018		2019			2018
Long-term Obligations	$	3,078	$	3,291	$	(10	)	$	(93	)

(d) Includes increases in the carrying amount of $20 million and $30 million at September 28, 2019 and December 31, 2018, respectively, on discontinued hedging relationships.

	Gain (Loss) Recognized
	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Fair Value Hedging Relationships
Interest rate swaps
Hedged long-term obligations - included in other expense, net	$	(14	)	$	8		$	(95	)	$	60
Derivatives designated as hedging instruments - included in other expense, net	15			(8		)	98			(57		)
Derivatives Designated as Cash Flow Hedges
Interest rate swaps
Included in unrealized losses on hedging instruments within other comprehensive items	(50		)	—			(50		)	—
Amount reclassified from accumulated other comprehensive items to other expense, net	(3		)	(3		)	(10		)	(9		)
Financial Instruments Designated as Net Investment Hedges
Foreign currency-denominated debt
Included in currency translation adjustment within other comprehensive items	261			50			320			250
Cross-currency interest rate swaps
Included in currency translation adjustment within other comprehensive items	72			5			79			8
Included in other expense, net	13			9			41			12
Derivatives Not Designated as Hedging Instruments
Currency exchange contracts
Included in cost of product revenues	1			1			—			1
Included in other expense, net	43			(2		)	49			25

Gains and losses recognized on currency exchange contracts and the interest rate swaps designated as fair value hedges are included in the consolidated statement of income together with the corresponding, offsetting losses and gains on the underlying hedged transactions.

The company also uses foreign currency-denominated debt and cross-currency interest rate swaps to partially hedge its net investments in foreign operations against adverse movements in exchange rates. The majority of the company’s euro-denominated senior notes and cross-currency interest rate swaps have been designated as, and are effective as, economic hedges of part of the net investment in a foreign operation. Accordingly, foreign currency transaction gains or losses due to spot rate fluctuations on the euro-denominated debt instruments and contract fair value changes on the cross-currency interest rate swaps, excluding interest accruals, are included in currency translation adjustment within other comprehensive items and shareholders’ equity.

See Note 1 to the consolidated financial statements for 2018 included in the company's Annual Report on Form 10-K and Note 8 herein for additional information on the company's risk management objectives and strategies.

Cash Flow Hedge Arrangements

In September 2019, the company entered into interest rate swap arrangements to mitigate the risk of interest rates rising prior to completion of debt offerings. Based on the company's conclusion that the debt offerings were probable, the swaps hedged the cash flow risk for each of the interest payments on €1.80 billion plus $900 million aggregate principal amounts of the planned fixed-rate debt issues. The hedges were terminated in the third quarter of 2019, in connection with the early fourth quarter debt offerings (Note 15). The aggregate fair value of the hedges at that time, $38 million, net of tax, has been classified as a reduction to accumulated other comprehensive items and will be amortized to interest expense over the terms of the related debt issuances. The company had a cash outlay of $50 million in 2019 associated with termination of the arrangements, included in other financing activities, net, in the accompanying statement of cash flows.

Fair Value of Other Financial Instruments

The carrying value and fair value of the company’s notes receivable and debt obligations are as follows:

	September 28, 2019				December 31, 2018
	Carrying		Fair		Carrying		Fair
(In millions)	Value		Value		Value		Value
Debt Obligations:
Senior notes	$	16,350	$	17,513	$	18,276	$	18,322
Commercial paper	683		683		693		693
Other	20		20		21		21
	$	17,053	$	18,216	$	18,990	$	19,036

The fair value of debt obligations was determined based on quoted market prices and on borrowing rates available to the company at the respective period ends which represent level 2 measurements.

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Nature of Operations and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 28, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Lessee, Leases [Policy Text Block]

Leases

The company determines whether an arrangement is, or contains, a lease at inception. Prior to 2019, the company generally accounted for operating lease payments by charging them to expense as incurred. Beginning in 2019, operating leases that have commenced are included in other assets, other accrued expenses and other long-term liabilities in the consolidated balance sheet. Classification of operating lease liabilities as either current or noncurrent is based on the expected timing of payments due under the company’s obligations.

Right-of-use (ROU) assets represent the company’s right to use an underlying asset for the lease term and lease liabilities represent the company’s obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheet. The company recognizes lease expense for these leases on a straight-line basis over the lease term.

Because most of the company’s leases do not provide an implicit rate, the company estimates incremental borrowing rates based on the information available at the commencement date in determining the present value of lease payments. The company uses the implicit rate when readily determinable. Lease terms may include the effect of options to extend or terminate the lease when it is reasonably certain that the company will exercise that option. Operating lease expense is recognized on a straight-line basis over the lease term.

As a lessee, the company accounts for the lease and non-lease components as a single lease component.

Use of Estimates [Policy Text Block]

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. Actual results could differ from those estimates.

New Accounting Pronouncements, Policy [Policy Text Block]

Recent Accounting Pronouncements

In August 2018, the FASB issued new guidance to modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The company expects to adopt the guidance when it is effective in 2020 using a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In August 2018, the FASB issued new guidance to modify the disclosure requirements on fair value measurements. The company expects to adopt the guidance when it is effective in 2020 with some items requiring a prospective method and others

requiring a retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s disclosures.

In June 2016, the FASB issued new guidance to require a financial asset measured at amortized cost basis, such as accounts receivable, to be presented at the net amount expected to be collected based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. During 2018 and 2019, the FASB issued additional guidance and clarification. The company expects to adopt the guidance when it is effective in 2020 using a modified retrospective method. The adoption of this guidance is not expected to have a material impact on the company’s consolidated financial statements.

In February 2016, the FASB issued new guidance which requires lessees to record most leases on their balance sheets as lease liabilities, initially measured at the present value of the future lease payments, with corresponding right-of-use assets. The new guidance also sets forth new disclosure requirements related to leases. During 2017 - 2019, the FASB issued additional guidance and clarification. The guidance became effective for the company in 2019. The company has elected to adopt the guidance using a modified retrospective method, by applying the transition approach as of the beginning of the period of adoption. Comparative periods have not been restated. As permitted upon transition, the company did not reassess whether any expired or existing contracts were or contained embedded leases, the lease classification for any expired or existing leases, initial direct costs for any leases, or whether land easements met the definition of a lease if they were not accounted for as leases under the prior guidance. Adoption of the new guidance impacted the company’s Consolidated Balance Sheet as follows:

(In millions)	December 31, 2018 as Reported		Impact of Adopting New Lease Guidance		January 1, 2019 As Adopted
Other Assets	$	1,117	$	641	$	1,758
Other Accrued Expenses	1,470		132		1,602
Other Long-term Liabilities	2,515		505		3,020
Retained Earnings	18,696		4		18,700

Business Combinations Policy [Policy Text Block]

The company’s acquisitions have historically been made at prices above the determined fair value of the acquired identifiable net assets, resulting in goodwill, due to expectations of the synergies that will be realized by combining the businesses. 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 use of the commercial infrastructure of the acquired businesses to cost-effectively expand sales of company products.

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. Acquisition transaction costs are recorded in selling, general and administrative expenses as incurred.

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Consolidated Balance Sheet (Unaudited) (Parenthetical) - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Statement of Financial Position [Abstract]
Accounts Receivable Allowances	$ 106	$ 117
Preferred Stock, $100 Par Value - Par Value (in dollars per share)	$ 100	$ 100
Preferred Stock, $100 Par Value - Shares Authorized (in shares)	50,000	50,000
Preferred Stock, $100 Par Value - Shares Issued (in shares)	0	0
Common Stock, $1 Par Value - Par Value (in dollars per share)	$ 1	$ 1
Common Stock, $1 Par Value - Shares Authorized (in shares)	1,200,000,000	1,200,000,000
Common Stock, $1 Par Value - Shares Issued (in shares)	434,028,435	431,566,561
Treasury Stock at Cost (in shares)	33,037,208	29,444,882

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Consolidated Statement of Cash Flows (Unaudited) - USD ($) $ in Millions	9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018
Operating Activities
Net Income	$ 2,694	$ 2,040
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	416	393
Amortization of acquisition-related intangible assets	1,285	1,316
Change in deferred income taxes	(356)	(317)
Gain on sales of businesses	(486)	0
Non-cash stock-based compensation	138	137
Other non-cash expenses, net	123	77
Changes in assets and liabilities, excluding the effects of acquisitions and disposition:
Accounts receivable	(321)	(64)
Inventories	(449)	(333)
Other assets	(186)	(185)
Accounts payable	70	(45)
Other liabilities	172	(199)
Contributions to retirement plans	(40)	(78)
Net cash provided by operating activities	3,060	2,742
Investing Activities
Acquisitions, net of cash acquired	(1,687)	(59)
Proceeds from sale of business, net of cash divested	1,128	0
Purchase of property, plant and equipment	(637)	(474)
Proceeds from sale of property, plant and equipment	18	6
Other investing activities, net	30	(5)
Net cash used in investing activities	(1,148)	(532)
Financing Activities
Net proceeds from issuance of debt	0	690
Repayment of debt	(1,702)	(2,048)
Proceeds from issuance of commercial paper	2,581	3,378
Repayments of commercial paper	(2,578)	(3,842)
Purchases of company common stock	(750)	(250)
Dividends paid	(221)	(198)
Net proceeds from issuance of company common stock under employee stock plans	115	97
Other financing activities	(49)	(51)
Net cash (used in) provided by financing activities	(2,604)	(2,224)
Exchange Rate Effect on Cash	(120)	(236)
Decrease in Cash, Cash Equivalents and Restricted Cash	(812)	(250)
Cash, Cash Equivalents and Restricted Cash at Beginning of Period	2,117	1,361
Cash, Cash Equivalents and Restricted Cash at End of Period	$ 1,305	$ 1,111

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Revenue (Tables)

9 Months Ended

Sep. 28, 2019

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue [Table Text Block]

Disaggregated Revenue

Revenue by type is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues
Consumables	3,228		3,056		$	9,726	9,345
Instruments	1,570		1,515		4,619		4,462
Services	1,474		1,349		4,368		4,044
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (a)
North America	$	3,220	$	3,030	$	9,509	$	8,975
Europe	1,514		1,454		4,569		4,521
Asia-Pacific	1,349		1,251		4,080		3,809
Other regions	189		185		555		546
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(a)

Revenues are attributed to regions based on customer location.

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Business Segment and Geographical Information

9 Months Ended

Sep. 28, 2019

Segment Reporting [Abstract]

Business Segment and Geographical Information [Text Block]

Note 4.

Business Segment and Geographical Information

The company’s management evaluates segment operating performance based on operating income before certain charges/credits to cost of revenues and selling, general and administrative expenses, principally associated with acquisition accounting; restructuring and other costs/income including costs arising from facility consolidations such as severance and abandoned lease expense and gains and losses from the sale of real estate and product lines as well as from significant litigation-related matters; and amortization of acquisition-related intangible assets. The company uses this measure because it helps management understand and evaluate the segments’ core operating results and facilitates comparison of performance for determining compensation.

Business Segment Information

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Revenues
Life Sciences Solutions	$	1,701		$	1,504		$	5,018		$	4,572
Analytical Instruments	1,358			1,333			4,004			3,901
Specialty Diagnostics	879			894			2,779			2,773
Laboratory Products and Services	2,619			2,470			7,765			7,433
Eliminations	(285		)	(281		)	(853		)	(828		)
Consolidated revenues	6,272			5,920			18,713			17,851
Segment Income (a)
Life Sciences Solutions	586			495			1,756			1,534
Analytical Instruments	311			294			879			831
Specialty Diagnostics	223			223			707			719
Laboratory Products and Services	303			299			933			916
Subtotal reportable segments (a)	1,423			1,311			4,275			4,000
Cost of revenues (charges) credits, net	(5		)	1			(16		)	(7		)
Selling, general and administrative (charges) credits, net	(7		)	4			(54		)	(7		)
Restructuring and other (costs) income, net	(31		)	27			442			(35		)
Amortization of acquisition-related intangible assets	(434		)	(431		)	(1,285		)	(1,316		)
Consolidated operating income	946			912			3,362			2,635
Other expense, net (b)	(124		)	(102		)	(330		)	(385		)
Income before income taxes	$	822		$	810		$	3,032		$	2,250

(a) Represents operating income before certain charges to cost of revenues and selling, general and administrative expenses; restructuring and other costs/income, net; and amortization of acquisition-related intangibles.

(b) The company does not allocate other expense, net to its segments.

Geographical Information

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (c)
United States	$	3,096	$	2,918	$	9,117	$	8,588
China	694		629		2,072		1,818
Other	2,482		2,373		7,524		7,445
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(c)

Revenues are attributed to countries based on customer location.

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Debt and Other Financing Arrangements

9 Months Ended

Sep. 28, 2019

Debt Disclosure [Abstract]

Debt and Other Financing Arrangements [Text Block]

Note 8.

Debt and Other Financing Arrangements

	Effective Interest Rate at September 28,		September 28,			December 31,
(Dollars in millions)	2019		2019			2018
Commercial Paper	0.84	%	$	683		$	693
Floating Rate 2-Year Senior Notes, Due 7/24/2019 (euro-denominated)			—			574
6.00% 10-Year Senior Notes, Due 3/1/2020	2.99	%	750			750
4.70% 10-Year Senior Notes, Due 5/1/2020			—			300
Floating Rate 2-Year Senior Notes, Due 8/7/2020 (euro-denominated)	0.16	%	656			688
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	1.62	%	465			487
5.00% 10-Year Senior Notes, Due 1/15/2021	3.25	%	400			400
4.50% 10-Year Senior Notes, Due 3/1/2021	5.66	%	1,000			1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	5.19	%	1,100			1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	3.42	%	800			800
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)	2.27	%	547			574
3.15% 10-Year Senior Notes, Due 1/15/2023			—			800
3.00% 7-Year Senior Notes, Due 4/15/2023	5.29	%	1,000			1,000
4.15% 10-Year Senior Notes, Due 2/1/2024	4.16	%	1,000			1,000
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)	0.93	%	1,094			1,147
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)	2.09	%	700			734
3.65% 10-Year Senior Notes, Due 12/15/2025	3.77	%	350			350
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)	1.53	%	766			802
2.95% 10-Year Senior Notes, Due 9/19/2026	3.19	%	1,200			1,200
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)	1.65	%	547			574
3.20% 10-Year Senior Notes, Due 8/15/2027	3.39	%	750			750
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)	1.46	%	656			688
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)	2.08	%	766			802
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)	2.94	%	766			802
5.30% 30-Year Senior Notes, Due 2/1/2044	5.37	%	400			400
4.10% 30-Year Senior Notes, Due 8/15/2047	4.23	%	750			750
Other			20			21
Total Borrowings at Par Value			17,166			19,186
Fair Value Hedge Accounting Adjustments			(10		)	(93		)
Unamortized Discount, Net			(34		)	(21		)
Unamortized Debt Issuance Costs			(69		)	(82		)
Total Borrowings at Carrying Value			17,053			18,990
Less: Short-term Obligations and Current Maturities			661			1,271
Long-term Obligations			$	16,392		$	17,719

The effective interest rates for the fixed-rate debt include the stated interest on the notes, the accretion of any discount or amortization of any premium, the amortization of any debt issuance costs and, if applicable, adjustments related to hedging.

See Note 12 for fair value information pertaining to the company’s long-term obligations.

As discussed in Note 15, early in the fourth quarter of 2019, the company issued new long-term senior notes and is using the proceeds to redeem the outstanding commercial paper, the 6.00% Senior Notes due 2020, the 1.5% Senior Notes due 2020, the 5.00% Senior Notes due 2021, the 4.50% Senior Notes due 2021, the 3.60% Senior Notes due 2021 and the 3.30% Senior Notes due 2022 included in the table above. Accordingly, all of this debt has been reported as long-term at September 28, 2019.

Credit Facilities

The company has a revolving credit facility with a bank group that provides for up to $2.50 billion of unsecured multi-currency revolving credit. The facility expires in July 2021. The agreement calls for interest at either a LIBOR-based rate, a EURIBOR-based rate (for funds drawn in euro) or a rate based on the prime lending rate of the agent bank, at the company’s option. The agreement contains affirmative, negative and financial covenants, and events of default customary for facilities of this type. The covenants in our revolving credit facility (the Facility) include a Consolidated Leverage Ratio (total debt-to-Consolidated EBITDA) and a Consolidated Interest Coverage Ratio (Consolidated EBITDA to Consolidated Interest Expense), as such terms are defined in the Facility. Specifically, the company has agreed that, so long as any lender has any commitment under the Facility, any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a maximum Consolidated Leverage Ratio of 3.5:1.0. The company has also agreed that so long as any lender has any commitment under the Facility or any letter of credit is outstanding under the Facility, or any loan or other obligation is outstanding under the Facility, it will maintain a minimum Consolidated Interest Coverage Ratio of 3.0:1.0 as of the last day of any fiscal quarter. As of September 28, 2019, no borrowings were outstanding under the Facility, although available capacity was reduced by approximately $80 million as a result of outstanding letters of credit.

Commercial Paper Programs

The company has commercial paper programs pursuant to which it may issue and sell unsecured, short-term promissory notes (CP Notes). Under the U.S. program, a) maturities may not exceed 397 days from the date of issue and b) the CP Notes are issued on a private placement basis under customary terms in the commercial paper market and are not redeemable prior to maturity nor subject to voluntary prepayment. Under the euro program, maturities may not exceed 183 days and may be denominated in euro, U.S. dollars, Japanese yen, British pounds sterling, Swiss franc, Canadian dollars or other currencies. Under both programs, the CP Notes are issued at a discount from par (or premium to par, in the case of negative interest rates), or, alternatively, are sold at par and bear varying interest rates on a fixed or floating basis. As of September 28, 2019, outstanding borrowings under these programs were $683 million with a weighted average remaining period to maturity of 41 days.

Senior Notes

Interest on the floating rate senior notes is payable quarterly. Interest is payable annually on the other euro-denominated senior notes and semi-annually on all other senior notes. Each of the notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest. The company is subject to certain affirmative and negative covenants under the indentures governing the senior notes, the most restrictive of which limits the ability of the company to pledge principal properties as security under borrowing arrangements.

In September 2019, the company redeemed its 4.70% Senior Notes due 2020 and its 3.15% Senior Notes due 2023. In connection with these redemptions, the company incurred $42 million of losses on the early extinguishment of debt included in Other Expense, Net on the accompanying statement of income.

In 2018, Thermo Fisher Scientific (Finance I) B.V., a wholly-owned finance subsidiary of the company, issued the Floating Rate Senior Notes due 2020 included in the table above. This subsidiary has no independent function other than financing activities. The Floating Rate Senior Notes due 2020 are fully and unconditionally guaranteed by the company and no other subsidiaries of the company have guaranteed the obligations.

Interest Rate Swap Arrangements and related Cross-currency Interest Rate Swap Arrangements

The company has entered into LIBOR-based interest rate swap arrangements with various banks on several of its outstanding senior notes. The aggregate amounts of the swaps are equal to the principal amounts of the notes and the payment dates of the swaps coincide with the interest payment dates of the notes. The swap contracts provide for the company to pay a variable interest rate and receive a fixed rate. The variable interest rates reset monthly. The swaps have been accounted for as fair value hedges of the notes. See Note 12 for additional information on the interest rate swap arrangements and related cross-currency interest rate swap arrangements. The following table summarizes the outstanding interest rate swap arrangements on the company's senior notes at September 28, 2019:

	Aggregate Notional Amount		Pay Rate as of
(Dollars in millions)		Pay Rate	September 28, 2019		Receive Rate
4.50% Senior Notes due 2021 (a)	1,000	1-month LIBOR + 3.4420%	5.5310	%	4.50	%
3.60% Senior Notes due 2021 (a)	1,100	1-month LIBOR + 2.5150%	4.5425	%	3.60	%
3.00% Senior Notes due 2023 (a)	1,000	1-month LIBOR + 1.7640%	3.7915	%	3.00	%

(a) The payments on $1.8 billion notional value of these interest rate swaps are offset in part by cross-currency interest rate swaps which effectively reduced the pay rate as of September 28, 2019 from a weighted average of 4.50% to a weighted average of 1.78%.

The company has entered into $1.8 billion notional value of cross-currency interest rate swaps, which effectively convert a portion of the semi-annual payments related to the variable rate, U.S. dollar denominated, LIBOR-based interest rate swaps to payments on variable rate, euro denominated, EURIBOR-based cross-currency interest rate swaps.

As discussed above and in Note 15, early in the fourth quarter of 2019, the company redeemed its 4.50% Senior Notes due 2021 and its 3.60% Senior Notes due 2021 and settled the related interest rate and cross-currency interest rate swaps.

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Supplemental Cash Flow Information (Tables)

9 Months Ended

Sep. 28, 2019

Supplemental Cash Flow Information [Abstract]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Nine Months Ended
	September 28,		September 29,
(In millions)	2019		2018
Non-cash Investing and Financing Activities
Declared but unpaid dividends	$	77	$	69
Issuance of stock upon vesting of restricted stock units	179		167

Restrictions on Cash and Cash Equivalents [Table Text Block]

Cash, cash equivalents and restricted cash is included in the consolidated balance sheet as follows:

	September 28,		December 31,
(In millions)	2019		2018
Cash and Cash Equivalents	$	1,273	$	2,103
Restricted Cash Included in Other Current Assets	31		12
Restricted Cash Included in Other Assets	1		2
Cash, Cash Equivalents and Restricted Cash	$	1,305	$	2,117

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Debt and Other Financing Arrangements (Tables)

9 Months Ended

Sep. 28, 2019

Debt Disclosure [Abstract]

Schedule of Debt [Table Text Block]

	Effective Interest Rate at September 28,		September 28,			December 31,
(Dollars in millions)	2019		2019			2018
Commercial Paper	0.84	%	$	683		$	693
Floating Rate 2-Year Senior Notes, Due 7/24/2019 (euro-denominated)			—			574
6.00% 10-Year Senior Notes, Due 3/1/2020	2.99	%	750			750
4.70% 10-Year Senior Notes, Due 5/1/2020			—			300
Floating Rate 2-Year Senior Notes, Due 8/7/2020 (euro-denominated)	0.16	%	656			688
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	1.62	%	465			487
5.00% 10-Year Senior Notes, Due 1/15/2021	3.25	%	400			400
4.50% 10-Year Senior Notes, Due 3/1/2021	5.66	%	1,000			1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	5.19	%	1,100			1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	3.42	%	800			800
2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated)	2.27	%	547			574
3.15% 10-Year Senior Notes, Due 1/15/2023			—			800
3.00% 7-Year Senior Notes, Due 4/15/2023	5.29	%	1,000			1,000
4.15% 10-Year Senior Notes, Due 2/1/2024	4.16	%	1,000			1,000
0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated)	0.93	%	1,094			1,147
2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated)	2.09	%	700			734
3.65% 10-Year Senior Notes, Due 12/15/2025	3.77	%	350			350
1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated)	1.53	%	766			802
2.95% 10-Year Senior Notes, Due 9/19/2026	3.19	%	1,200			1,200
1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated)	1.65	%	547			574
3.20% 10-Year Senior Notes, Due 8/15/2027	3.39	%	750			750
1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated)	1.46	%	656			688
1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated)	2.08	%	766			802
2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated)	2.94	%	766			802
5.30% 30-Year Senior Notes, Due 2/1/2044	5.37	%	400			400
4.10% 30-Year Senior Notes, Due 8/15/2047	4.23	%	750			750
Other			20			21
Total Borrowings at Par Value			17,166			19,186
Fair Value Hedge Accounting Adjustments			(10		)	(93		)
Unamortized Discount, Net			(34		)	(21		)
Unamortized Debt Issuance Costs			(69		)	(82		)
Total Borrowings at Carrying Value			17,053			18,990
Less: Short-term Obligations and Current Maturities			661			1,271
Long-term Obligations			$	16,392		$	17,719

Schedule of Derivative Instruments [Table Text Block]

	Aggregate Notional Amount		Pay Rate as of
(Dollars in millions)		Pay Rate	September 28, 2019		Receive Rate
4.50% Senior Notes due 2021 (a)	1,000	1-month LIBOR + 3.4420%	5.5310	%	4.50	%
3.60% Senior Notes due 2021 (a)	1,100	1-month LIBOR + 2.5150%	4.5425	%	3.60	%
3.00% Senior Notes due 2023 (a)	1,000	1-month LIBOR + 1.7640%	3.7915	%	3.00	%

(a)

The payments on $1.8 billion notional value of these interest rate swaps are offset in part by cross-currency interest rate swaps which effectively reduced the pay rate as of September 28, 2019 from a weighted average of 4.50% to a weighted average of 1.78%.

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Business Segment and Geographical Information (Tables)

9 Months Ended

Sep. 28, 2019

Segment Reporting [Abstract]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Business Segment Information

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Revenues
Life Sciences Solutions	$	1,701		$	1,504		$	5,018		$	4,572
Analytical Instruments	1,358			1,333			4,004			3,901
Specialty Diagnostics	879			894			2,779			2,773
Laboratory Products and Services	2,619			2,470			7,765			7,433
Eliminations	(285		)	(281		)	(853		)	(828		)
Consolidated revenues	6,272			5,920			18,713			17,851
Segment Income (a)
Life Sciences Solutions	586			495			1,756			1,534
Analytical Instruments	311			294			879			831
Specialty Diagnostics	223			223			707			719
Laboratory Products and Services	303			299			933			916
Subtotal reportable segments (a)	1,423			1,311			4,275			4,000
Cost of revenues (charges) credits, net	(5		)	1			(16		)	(7		)
Selling, general and administrative (charges) credits, net	(7		)	4			(54		)	(7		)
Restructuring and other (costs) income, net	(31		)	27			442			(35		)
Amortization of acquisition-related intangible assets	(434		)	(431		)	(1,285		)	(1,316		)
Consolidated operating income	946			912			3,362			2,635
Other expense, net (b)	(124		)	(102		)	(330		)	(385		)
Income before income taxes	$	822		$	810		$	3,032		$	2,250

(a) Represents operating income before certain charges to cost of revenues and selling, general and administrative expenses; restructuring and other costs/income, net; and amortization of acquisition-related intangibles.

(b)

The company does not allocate other expense, net to its segments.

Reconciliation of Operating Profit (Loss) from Segments to Consolidated [Table Text Block]

Business Segment Information

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Revenues
Life Sciences Solutions	$	1,701		$	1,504		$	5,018		$	4,572
Analytical Instruments	1,358			1,333			4,004			3,901
Specialty Diagnostics	879			894			2,779			2,773
Laboratory Products and Services	2,619			2,470			7,765			7,433
Eliminations	(285		)	(281		)	(853		)	(828		)
Consolidated revenues	6,272			5,920			18,713			17,851
Segment Income (a)
Life Sciences Solutions	586			495			1,756			1,534
Analytical Instruments	311			294			879			831
Specialty Diagnostics	223			223			707			719
Laboratory Products and Services	303			299			933			916
Subtotal reportable segments (a)	1,423			1,311			4,275			4,000
Cost of revenues (charges) credits, net	(5		)	1			(16		)	(7		)
Selling, general and administrative (charges) credits, net	(7		)	4			(54		)	(7		)
Restructuring and other (costs) income, net	(31		)	27			442			(35		)
Amortization of acquisition-related intangible assets	(434		)	(431		)	(1,285		)	(1,316		)
Consolidated operating income	946			912			3,362			2,635
Other expense, net (b)	(124		)	(102		)	(330		)	(385		)
Income before income taxes	$	822		$	810		$	3,032		$	2,250

(a) Represents operating income before certain charges to cost of revenues and selling, general and administrative expenses; restructuring and other costs/income, net; and amortization of acquisition-related intangibles.

(b)

The company does not allocate other expense, net to its segments.

Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas [Table Text Block]

Geographical Information

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (c)
United States	$	3,096	$	2,918	$	9,117	$	8,588
China	694		629		2,072		1,818
Other	2,482		2,373		7,524		7,445
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(c)

Revenues are attributed to countries based on customer location.

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Other Expense, Net (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Other Income and Expenses [Abstract]
Interest Income	$ 52	$ 41	$ 179	$ 92
Interest Expense	(164)	(162)	(534)	(495)
Other Items, Net	(12)	19	25	18
Other Expense, Net	$ (124)	$ (102)	(330)	$ (385)
Losses on Extinguishment of Debt			$ 42

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Debt Outstanding Debt (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 28, 2019	Dec. 31, 2018
Debt Instrument [Line Items]
Total Borrowings at Par Value	$ 17,166	$ 19,186
Fair Value Hedge Accounting Adjustments	(10)	(93)
Unamortized Discount, Net	(34)	(21)
Unamortized Debt Issuance Costs	(69)	(82)
Total Borrowings at Carrying Value	17,053	18,990
Less: Short-term Obligations and Current Maturities	661	1,271
Long-term Obligations	16,392	17,719
Losses on Extinguishment of Debt	$ 42
Commercial Paper Programs [Member]
Debt Instrument [Line Items]
Effective Interest Rate	0.84%
Total Borrowings at Par Value	$ 683	693
Total Borrowings at Carrying Value	683	693
Senior Notes [Member]
Debt Instrument [Line Items]
Total Borrowings at Carrying Value	$ 16,350	18,276
Debt Instrument, Call Feature	Each of the notes may be redeemed at a redemption price of 100% of the principal amount plus a specified make-whole premium and accrued interest.
Senior Notes [Member] | Floating Rate 2-Year Senior Notes, Due 7/24/2019 (euro-denominated) [Member]
Debt Instrument [Line Items]
Total Borrowings at Par Value		574
Senior Notes [Member] | 6.00% 10-Year Senior Notes, Due 3/1/2020
Debt Instrument [Line Items]
Stated Interest Rate	6.00%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Mar. 01, 2020
Effective Interest Rate	2.99%
Total Borrowings at Par Value	$ 750	750
Senior Notes [Member] | 4.70% 10-Year Senior Notes, Due 5/1/2020 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	4.70%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	May 01, 2020
Total Borrowings at Par Value		300
Senior Notes [Member] | Floating Rate 2-Year Senior Notes, Due 8/7/2020 (euro-denominated) [Member]
Debt Instrument [Line Items]
Debt Instrument, Term	2 years
Debt Instrument, Maturity Date	Aug. 07, 2020
Effective Interest Rate	0.16%
Total Borrowings at Par Value	$ 656	688
Senior Notes [Member] | 1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)
Debt Instrument [Line Items]
Stated Interest Rate	1.50%
Debt Instrument, Term	5 years
Debt Instrument, Maturity Date	Dec. 01, 2020
Effective Interest Rate	1.62%
Total Borrowings at Par Value	$ 465	487
Senior Notes [Member] | 5.00% 10-Year Senior Notes, Due 1/15/2021
Debt Instrument [Line Items]
Stated Interest Rate	5.00%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Jan. 15, 2021
Effective Interest Rate	3.25%
Total Borrowings at Par Value	$ 400	400
Senior Notes [Member] | 4.50% 10-Year Senior Notes, Due 3/1/2021
Debt Instrument [Line Items]
Stated Interest Rate	4.50%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Mar. 01, 2021
Effective Interest Rate	5.66%
Total Borrowings at Par Value	$ 1,000	1,000
Senior Notes [Member] | 3.60% 10-Year Senior Notes, Due 8/15/2021
Debt Instrument [Line Items]
Stated Interest Rate	3.60%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Aug. 15, 2021
Effective Interest Rate	5.19%
Total Borrowings at Par Value	$ 1,100	1,100
Senior Notes [Member] | 3.30% 7-Year Senior Notes, Due 2/15/2022
Debt Instrument [Line Items]
Stated Interest Rate	3.30%
Debt Instrument, Term	7 years
Debt Instrument, Maturity Date	Feb. 15, 2022
Effective Interest Rate	3.42%
Total Borrowings at Par Value	$ 800	800
Senior Notes [Member] | 2.15% 7-Year Senior Notes, Due 7/21/2022 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	2.15%
Debt Instrument, Term	7 years
Debt Instrument, Maturity Date	Jul. 21, 2022
Effective Interest Rate	2.27%
Total Borrowings at Par Value	$ 547	574
Senior Notes [Member] | 3.15% 10-Year Senior Notes, Due 1/15/2023 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	3.15%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Jan. 15, 2023
Total Borrowings at Par Value		800
Senior Notes [Member] | 3.00% 7-Year Senior Notes, Due 4/15/2023 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	3.00%
Debt Instrument, Term	7 years
Debt Instrument, Maturity Date	Apr. 15, 2023
Effective Interest Rate	5.29%
Total Borrowings at Par Value	$ 1,000	1,000
Senior Notes [Member] | 4.15% 10-Year Senior Notes, Due 2/1/2024 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	4.15%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Feb. 01, 2024
Effective Interest Rate	4.16%
Total Borrowings at Par Value	$ 1,000	1,000
Senior Notes [Member] | 0.75% 8-Year Senior Notes, Due 9/12/2024 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	0.75%
Debt Instrument, Term	8 years
Debt Instrument, Maturity Date	Sep. 12, 2024
Effective Interest Rate	0.93%
Total Borrowings at Par Value	$ 1,094	1,147
Senior Notes [Member] | 2.00% 10-Year Senior Notes, Due 4/15/2025 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	2.00%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Apr. 15, 2025
Effective Interest Rate	2.09%
Total Borrowings at Par Value	$ 700	734
Senior Notes [Member] | 3.65% 10-Year Senior Notes, Due 12/15/2025 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	3.65%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Dec. 15, 2025
Effective Interest Rate	3.77%
Total Borrowings at Par Value	$ 350	350
Senior Notes [Member] | 1.40% 8.5-Year Senior Notes, Due 1/23/2026 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	1.40%
Debt Instrument, Term	8 years 6 months
Debt Instrument, Maturity Date	Jan. 23, 2026
Effective Interest Rate	1.53%
Total Borrowings at Par Value	$ 766	802
Senior Notes [Member] | 2.95% 10-Year Senior Notes, Due 9/19/2026 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	2.95%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Sep. 19, 2026
Effective Interest Rate	3.19%
Total Borrowings at Par Value	$ 1,200	1,200
Senior Notes [Member] | 1.45% 10-Year Senior Notes, Due 3/16/2027 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	1.45%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Mar. 16, 2027
Effective Interest Rate	1.65%
Total Borrowings at Par Value	$ 547	574
Senior Notes [Member] | 3.20% 10-Year Senior Notes, Due 8/15/2027 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	3.20%
Debt Instrument, Term	10 years
Debt Instrument, Maturity Date	Aug. 15, 2027
Effective Interest Rate	3.39%
Total Borrowings at Par Value	$ 750	750
Senior Notes [Member] | 1.375% 12-Year Senior Notes, Due 9/12/2028 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	1.375%
Debt Instrument, Term	12 years
Debt Instrument, Maturity Date	Sep. 12, 2028
Effective Interest Rate	1.46%
Total Borrowings at Par Value	$ 656	688
Senior Notes [Member] | 1.95% 12-Year Senior Notes, Due 7/24/2029 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	1.95%
Debt Instrument, Term	12 years
Debt Instrument, Maturity Date	Jul. 24, 2029
Effective Interest Rate	2.08%
Total Borrowings at Par Value	$ 766	802
Senior Notes [Member] | 2.875% 20-Year Senior Notes, Due 7/24/2037 (euro-denominated) [Member]
Debt Instrument [Line Items]
Stated Interest Rate	2.875%
Debt Instrument, Term	20 years
Debt Instrument, Maturity Date	Jul. 24, 2037
Effective Interest Rate	2.94%
Total Borrowings at Par Value	$ 766	802
Senior Notes [Member] | 5.30% 30-Year Senior Notes, Due 2/1/2044 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	5.30%
Debt Instrument, Term	30 years
Debt Instrument, Maturity Date	Feb. 01, 2044
Effective Interest Rate	5.37%
Total Borrowings at Par Value	$ 400	400
Senior Notes [Member] | 4.10% 30-Year Senior Notes, Due 8/15/2047 [Member]
Debt Instrument [Line Items]
Stated Interest Rate	4.10%
Debt Instrument, Term	30 years
Debt Instrument, Maturity Date	Aug. 15, 2047
Effective Interest Rate	4.23%
Total Borrowings at Par Value	$ 750	750
Other Debt [Member]
Debt Instrument [Line Items]
Total Borrowings at Par Value	20	21
Total Borrowings at Carrying Value	$ 20	$ 21

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Commitments and Contingencies (Details) $ in Millions	Sep. 28, 2019 USD ($)
Accrual for Environmental Loss Contingencies Disclosure [Abstract]
Accrual for Environmental Loss Contingencies, Net	$ 63

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Revenue

9 Months Ended

Sep. 28, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

Note 3.

Revenue

Disaggregated Revenue

Revenue by type is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues
Consumables	3,228		3,056		$	9,726	9,345
Instruments	1,570		1,515		4,619		4,462
Services	1,474		1,349		4,368		4,044
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

Revenue by geographic region is as follows:

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions)	2019		2018		2019		2018
Revenues (a)
North America	$	3,220	$	3,030	$	9,509	$	8,975
Europe	1,514		1,454		4,569		4,521
Asia-Pacific	1,349		1,251		4,080		3,809
Other regions	189		185		555		546
Consolidated revenues	$	6,272	$	5,920	$	18,713	$	17,851

(a) Revenues are attributed to regions based on customer location.

Each reportable segment earns revenues from consumables, instruments and services in North America, Europe, Asia-Pacific and other regions. See Note 4 for revenue 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 September 28, 2019 was $6.76 billion. The company will recognize revenue for these performance obligations as they are satisfied, approximately 70% of which is expected to occur within the next twelve months.

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Earnings Per Share

9 Months Ended

Sep. 28, 2019

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Note 7.

Earnings per Share

	Three Months Ended				Nine Months Ended
	September 28,		September 29,		September 28,		September 29,
(In millions except per share amounts)	2019		2018		2019		2018
Net Income	$	760	$	709	$	2,694	$	2,040
Basic Weighted Average Shares	401		402		400		402
Plus Effect of:
Stock options and restricted units	3		4		3		4
Diluted Weighted Average Shares	404		406		403		406
Basic Earnings per Share	$	1.89	$	1.76	$	6.73	$	5.07
Diluted Earnings per Share	$	1.88	$	1.75	$	6.68	$	5.03
Antidilutive Stock Options Excluded from Diluted Weighted Average Shares	1		2		1		2

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Leases (Tables)

9 Months Ended

Sep. 28, 2019

Leases [Abstract]

Lessee, Operating Lease, Liability, Maturity [Table Text Block]

of operating lease liabilities are as follows:

(In millions)
Remainder of 2019	$	51
2020	180
2021	138
2022	106
2023	76
2024	55
2025 and Thereafter	175
Total Lease Payments	781
Less: Imputed Interest	94
Total Operating Lease Liability	$	687

Schedule of Future Minimum Rental Payments for Operating Leases [Table Text Block]

As previously disclosed in the company's 2018 Annual Report on Form 10-K and under previous lease accounting guidance, the following is a summary of annual future minimum lease and rental commitments under noncancelable operating leases as of December 31, 2018:

(In millions)
2019	$	192
2020	158
2021	118
2022	86
2023	58
2024 and Thereafter	177
	$	789

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Other Expense, Net (Tables)

9 Months Ended

Sep. 28, 2019

Other Income and Expenses [Abstract]

Schedule of Other Nonoperating Income (Expense) [Table Text Block]

The components of other expense, net, in the accompanying statement of income are as follows:

	Three Months Ended						Nine Months Ended
	September 28,			September 29,			September 28,			September 29,
(In millions)	2019			2018			2019			2018
Interest Income	$	52		$	41		$	179		$	92
Interest Expense	(164		)	(162		)	(534		)	(495		)
Other Items, Net	(12		)	19			25			18
Other Expense, Net	$	(124	)	$	(102	)	$	(330	)	$	(385	)

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Restructuring and Other Costs (Income), Net (Tables)

9 Months Ended

Sep. 28, 2019

Restructuring and Related Activities [Abstract]

Schedule of Restructuring and Related Costs [Table Text Block]

During the third quarter of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net		Total
Life Sciences Solutions	$	5	$	—		$	3	$	8
Analytical Instruments	—		—			1		1
Specialty Diagnostics	—		—			23		23
Laboratory Products and Services	—		8			4		12
Corporate	—		(1		)	—		(1		)
	$	5	$	7		$	31	$	43

During the first nine months of 2019, the company recorded net restructuring and other costs (income) by segment as follows:

(In millions)	Cost of Revenues		Selling, General and Administrative Expenses			Restructuring and Other Costs (Income), Net			Total
Life Sciences Solutions	$	16	$	—		$	14		$	30
Analytical Instruments	—		24			10			34
Specialty Diagnostics	—		4			(480		)	(476		)
Laboratory Products and Services	—		27			12			39
Corporate	—		(1		)	2			1
	$	16	$	54		$	(442	)	$	(372	)

Schedule of Restructuring Reserve by Type of Cost [Table Text Block]

The following table summarizes the cash components of the company’s restructuring plans. The non-cash components and other amounts reported as restructuring and other costs (income), net, in the accompanying statement of income have been summarized in the notes to the tables. Accrued restructuring costs are included in other accrued expenses in the accompanying balance sheet.

(In millions)	Severance			Abandonment of Excess Facilities			Other (a)			Total
Balance at December 31, 2018	$	34		$	42		$	4		$	80
Cumulative effect of accounting change (b)	—			(28		)	—			(28		)
Costs incurred in 2019 (d)	25			3			9			37
Reserves reversed (c)	(3		)	(1		)	—			(4		)
Payments	(29		)	(8		)	(8		)	(45		)
Currency translation	(1		)	—			—			(1		)
Balance at September 28, 2019	$	26		$	8		$	5		$	39

(a) Other includes relocation and moving expenses associated with facility consolidations, as well as employee retention costs which are accrued ratably over the period through which employees must work to qualify for a payment.

(b) Impact of adopting new lease accounting guidance on January 1, 2019.

(c) Represents reductions in cost of plans.

(d)

Excludes $486 million net gain on the sale of businesses; $6 million of impairment of acquired in-process research and development; $3 million of compensation due to employees on the date of acquisition; and $2 million of other non-cash charges, net.

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Leases (Details) - USD ($) $ in Millions	3 Months Ended	9 Months Ended
	Sep. 28, 2019	Sep. 28, 2019	Dec. 31, 2018
Lessee, Lease, Description [Line Items]
Operating Lease, Cost	$ 51	$ 149
Variable Lease, Cost	$ 10	31
Operating Lease, Payments		149
Right-of-Use Asset Obtained in Exchange for Operating Lease Liability		$ 108
Operating Lease, Weighted Average Remaining Lease Term	6 years 3 months 18 days	6 years 3 months 18 days
Operating Lease, Weighted Average Discount Rate, Percent	4.00%	4.00%
Operating Lease, Right-of-Use Asset	$ 645	$ 645
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent	us-gaap:OtherAssetsNoncurrent
Operating Lease, Liability, Current	$ 158	$ 158
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesCurrent	us-gaap:OtherLiabilitiesCurrent
Operating Lease, Liability, Noncurrent	$ 529	$ 529
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List]	us-gaap:OtherLiabilitiesNoncurrent	us-gaap:OtherLiabilitiesNoncurrent
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
Remainder of 2019	$ 51	$ 51
2020	180	180
2021	138	138
2022	106	106
2023	76	76
2024	55	55
2025 and Thereafter	175	175
Total Lease Payments	781	781
Less: Imputed Interest	94	94
Total Operating Lease Liability	$ 687	$ 687
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract]
2019			$ 192
2020			158
2021			118
2022			86
2023			58
2024 and Thereafter			177
Operating Leases, Future Minimum Payments Due			$ 789
Minimum [Member]
Lessee, Lease, Description [Line Items]
Remaining Lease Term, Operating Leases		1 month
Lessee, Operating Lease, Renewal Term	1 year	1 year
Maximum [Member]
Lessee, Lease, Description [Line Items]
Remaining Lease Term, Operating Leases		30 years
Lessee, Operating Lease, Renewal Term	10 years	10 years
Lessee, Operating Lease, Option to Terminate, Term		1 year
Guarantee Type, Other [Member]
Lessee, Lease, Description [Line Items]
Maximum Residual Value Guarantee	$ 147	$ 147

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Geographical Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues		$ 6,272	$ 5,920	$ 18,713	$ 17,851
United States
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	[1]	3,096	2,918	9,117	8,588
China
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	[1]	694	629	2,072	1,818
All Other Countries
Revenues from External Customers and Long-Lived Assets [Line Items]
Revenues	[1]	$ 2,482	$ 2,373	$ 7,524	$ 7,445

[1] Revenues are attributed to countries based on customer location.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net Income	$ 760	$ 709	$ 2,694	$ 2,040
Basic Weighted Average Shares	401	402	400	402
Effect of Stock Options and Restricted Units	3	4	3	4
Diluted Weighted Average Shares	404	406	403	406
Basic Earnings Per Share (in dollars per share)	$ 1.89	$ 1.76	$ 6.73	$ 5.07
Diluted Earnings Per Share (in dollars per share)	$ 1.88	$ 1.75	$ 6.68	$ 5.03
Share-based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive Stock Options Excluded From Computation Of Earnings Per Share	1	2	1	2

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Acquisitions Purchase Price (Details) - USD ($) $ in Millions		9 Months Ended	12 Months Ended
	Apr. 30, 2019	Sep. 28, 2019	Dec. 31, 2018
Net Assets Acquired [Abstract]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (in years)		14 years
Customer Relationships [Member]
Net Assets Acquired [Abstract]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (in years)		14 years
Product Technology [Member]
Net Assets Acquired [Abstract]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (in years)		13 years
Tradenames [Member]
Net Assets Acquired [Abstract]
Acquired Finite-lived Intangible Assets, Weighted Average Useful Life (in years)		2 years
Brammer Bio [Member]
Purchase Price
Payments to Acquire Businesses, Gross	$ 1,710
Cash acquired	(36)
Total Purchase Price	1,674
Net Assets Acquired [Abstract]
Current assets	52
Property, plant and equipment	147
Goodwill	938
Other assets	49
Contract Liabilities	(109)
Deferred tax liabilities	(111)
Other liabilities assumed	(108)
Net Assets Acquired	1,674
Revenue Reported by Acquired Entity			$ 140
Goodwill, Expected Tax Deductible Amount	405
Brammer Bio [Member] | Customer Relationships [Member]
Net Assets Acquired [Abstract]
Definite-lived intangible assets	744
Brammer Bio [Member] | Product Technology [Member]
Net Assets Acquired [Abstract]
Definite-lived intangible assets	65
Brammer Bio [Member] | Tradenames [Member]
Net Assets Acquired [Abstract]
Definite-lived intangible assets	$ 7
Other [Member]
Purchase Price
Total Purchase Price		$ 14

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Contract Assets and Liabilities (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 28, 2019	Dec. 31, 2018
Contract with Customer, Asset and Liability [Abstract]
Current Contract Assets, Net	$ 609	$ 459
Noncurrent Contract Asset, Net	14	15
Current Contract Liabilities	943	809
Noncurrent Contract Liabilities	562	$ 355
Revenue recognized that was included in the current contract liability balance at the beginning of the period	$ 654

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Business Segment Information (Details) - USD ($) $ in Millions		3 Months Ended		9 Months Ended
		Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Segment Reporting Information [Line Items]
Revenues		$ 6,272	$ 5,920	$ 18,713	$ 17,851
Cost of revenues (charges) credits, net		(5)		(16)
Selling, general and administrative (charges) credits, net		(7)		(54)
Restructuring and other costs, net		(31)	27	442	(35)
Amortization of acquisition-related intangible assets				(1,285)	(1,316)
Operating Income		946	912	3,362	2,635
Other expense, net		(124)	(102)	(330)	(385)
Income Before Income Taxes		822	810	3,032	2,250
Life Sciences Solutions [Member]
Segment Reporting Information [Line Items]
Cost of revenues (charges) credits, net		(5)		(16)
Restructuring and other costs, net		(3)		(14)
Analytical Instruments [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative (charges) credits, net				(24)
Restructuring and other costs, net		(1)		(10)
Specialty Diagnostics [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative (charges) credits, net				(4)
Restructuring and other costs, net		(23)		480
Laboratory Products and Services [Member]
Segment Reporting Information [Line Items]
Selling, general and administrative (charges) credits, net		(8)		(27)
Restructuring and other costs, net		(4)		(12)
Total Reportable Segments [Member]
Segment Reporting Information [Line Items]
Operating Income	[1]	1,423	1,311	4,275	4,000
Total Reportable Segments [Member] | Life Sciences Solutions [Member]
Segment Reporting Information [Line Items]
Revenues		1,701	1,504	5,018	4,572
Operating Income	[1]	586	495	1,756	1,534
Total Reportable Segments [Member] | Analytical Instruments [Member]
Segment Reporting Information [Line Items]
Revenues		1,358	1,333	4,004	3,901
Operating Income	[1]	311	294	879	831
Total Reportable Segments [Member] | Specialty Diagnostics [Member]
Segment Reporting Information [Line Items]
Revenues		879	894	2,779	2,773
Operating Income	[1]	223	223	707	719
Total Reportable Segments [Member] | Laboratory Products and Services [Member]
Segment Reporting Information [Line Items]
Revenues		2,619	2,470	7,765	7,433
Operating Income	[1]	303	299	933	916
Intersegment Eliminations [Member]
Segment Reporting Information [Line Items]
Revenues		(285)	(281)	(853)	(828)
Segment Reconciling Items [Member]
Segment Reporting Information [Line Items]
Cost of revenues (charges) credits, net		(5)	1	(16)	(7)
Selling, general and administrative (charges) credits, net		(7)	4	(54)	(7)
Restructuring and other costs, net		(31)	27	442	(35)
Amortization of acquisition-related intangible assets		$ (434)	$ (431)	$ (1,285)	$ (1,316)

[1] Represents operating income before certain charges to cost of revenues and selling, general and administrative expenses; restructuring and other costs/income, net; and amortization of acquisition-related intangibles.

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Fair Value Measurements and Fair Value of Financial Instruments Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Contingent Consideration [Member] - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Beginning Balance	$ 58	$ 40	$ 37	$ 35
Acquisitions (including assumed balances)			24	11
Payments	(3)	(3)	(3)	(8)
Change in fair value included in earnings		(3)	(3)	(4)
Ending Balance	$ 55	$ 34	$ 55	$ 34
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Liability, Gain (Loss), Statement of Income [Extensible List]			us-gaap:SellingGeneralAndAdministrativeExpense

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Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Dec. 31, 2018	Dec. 31, 2017
Non-cash Investing and Financing Activities [Abstract]
Declared but unpaid dividends	$ 77	$ 69
Issuance of stock upon vesting of restricted stock units	179	167
Cash and Cash Equivalents	1,273		$ 2,103
Restricted Cash Included in Other Current Assets	31		12
Restricted Cash Included in Other Assets	1		2
Cash, Cash Equivalents and Restricted Cash	$ 1,305	$ 1,111	$ 2,117	$ 1,361
Restricted Cash and Cash Equivalents, Current, Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsCurrent
Restricted Cash and Cash Equivalents, Noncurrent, Asset, Statement of Financial Position [Extensible List]	us-gaap:OtherAssetsNoncurrent

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Consolidated Balance Sheet (Unaudited) - USD ($) $ in Millions	Sep. 28, 2019	Dec. 31, 2018
Current Assets:
Cash and cash equivalents	$ 1,273	$ 2,103
Accounts receivable, less allowances of $106 and $117	4,384	4,136
Inventories	3,308	3,005
Other current assets	1,549	1,381
Total current assets	10,514	10,625
Property, Plant and Equipment, Net	4,420	4,165
Acquisition-related Intangible Assets, Net	14,311	14,978
Other Assets	1,860	1,117
Goodwill	25,624	25,347
Total Assets	56,729	56,232
Current Liabilities:
Short-term obligations and current maturities of long-term obligations	661	1,271
Accounts payable	1,659	1,615
Accrued payroll and employee benefits	883	982
Contract liabilities	943	809
Other accrued expenses	1,698	1,470
Total current liabilities	5,844	6,147
Deferred Income Taxes	2,001	2,265
Other Long-term Liabilities	3,137	2,515
Long-term Obligations	16,392	17,719
Shareholders' Equity:
Preferred stock, $100 par value, 50,000 shares authorized; none issued
Common stock, $1 par value, 1,200,000,000 shares authorized; 434,028,435 and 431,566,561 shares issued	434	432
Capital in excess of par value	14,964	14,621
Retained earnings	21,165	18,696
Treasury stock at cost, 33,037,208 and 29,444,882 shares	(4,486)	(3,665)
Accumulated other comprehensive items	(2,722)	(2,498)
Total shareholders' equity	29,355	27,586
Total Liabilities and Shareholders' Equity	$ 56,729	$ 56,232

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Consolidated Statement of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 28, 2019	Sep. 29, 2018	Sep. 28, 2019	Sep. 29, 2018
Statement of Comprehensive Income [Abstract]
Tax provision (benefit) on currency translation adjustment	$ 77	$ 13	$ 92	$ 60
Tax provision (benefit) on unrealized holding gains and losses on hedging instruments arising during the period	(12)	0	(12)	0
Tax provision (benefit) on reclassification adjustment for losses on hedging instruments recognized in net income	(1)	(1)	(3)	(3)
Tax provision (benefit) on pension and other postretirement benefit liability adjustments arising during the period	2	0	(2)	1
Tax provision (benefit) on amortization of net loss and prior service benefit included in net periodic pension cost	$ 0	$ 0	$ (2)	$ (3)

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Acquisitions and Dispositions (Tables)

9 Months Ended

Sep. 28, 2019

Business Combinations [Abstract]

Schedule of Business Acquisitions, by Acquisition [Table Text Block]

The components of the purchase price and net assets acquired for Brammer Bio are as follows:

(In millions)	Brammer Bio
Purchase Price
Cash paid	$	1,710
Cash acquired	(36		)
	$	1,674
Net Assets Acquired
Current assets	$	52
Property, plant and equipment	147
Definite-lived intangible assets:
Customer relationships	744
Product technology	65
Tradenames	7
Goodwill	938
Other assets	49
Contract liabilities	(109		)
Deferred tax liabilities	(111		)
Other liabilities assumed	(108		)
	$	1,674

Disposal Groups, Including Discontinued Operations [Table Text Block]

(In millions)	December 31, 2018
Current Assets	$	81
Long-term Assets	528
Current Liabilities	34
Long-term Liabilities	24

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Comprehensive Income

9 Months Ended

Sep. 28, 2019

Stockholders' Equity Note [Abstract]

Comprehensive Income and Shareholders' Equity [Text Block]

Note 11.

Comprehensive Income

Comprehensive income combines net income and other comprehensive items. Other comprehensive items represent certain amounts that are reported as components of shareholders’ equity in the accompanying balance sheet.

Changes in each component of accumulated other comprehensive items, net of tax, are as follows: 

(In millions)	Currency Translation Adjustment			Unrealized Losses on Hedging Instruments			Pension and Other Postretirement Benefit Liability Adjustment			Total
Balance at December 31, 2018	$	(2,243	)	$	(52	)	$	(203	)	$	(2,498	)
Other comprehensive items before reclassifications	(222		)	(38		)	(9		)	(269		)
Amounts reclassified from accumulated other comprehensive items	30			7			8			45
Net other comprehensive items	(192		)	(31		)	(1		)	(224		)
Balance at September 28, 2019	$	(2,435	)	$	(83	)	$	(204	)	$	(2,722	)

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Subsequent Events

9 Months Ended

Sep. 28, 2019

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Debt Issuances and Redemptions

Early in the fourth quarter of 2019, the company issued the following senior notes:

(In millions)	Principal Value Issued
0.125% 5.5-Year Senior Notes, Due 3/1/2025 (euro-denominated)	€	800
0.500% 8.5-Year Senior Notes, Due 3/1/2028 (euro-denominated)	€	800
2.600% 10-Year Senior Notes, Due 10/1/2029	$	900
0.875% 12-Year Senior Notes, Due 10/1/2031 (euro-denominated)	€	900
1.500% 20-Year Senior Notes, Due 10/1/2039 (euro-denominated)	€	900
1.875% 30-Year Senior Notes, Due 10/1/2049 (euro-denominated)	€	1,000

Net proceeds from the issuance of the notes in the table above was approximately $5.6 billion, after deducting underwriting discounts and estimated offering expenses. The company is using the proceeds to repay commercial paper obligations and to redeem the following senior notes:

(In millions)	Principal Value Redeemed
6.00% 10-Year Senior Notes, Due 3/1/2020	$	750
1.50% 5-Year Senior Notes, Due 12/1/2020 (euro-denominated)	€	425
5.00% 10-Year Senior Notes, Due 1/15/2021	$	400
4.50% 10-Year Senior Notes, Due 3/1/2021	$	1,000
3.60% 10-Year Senior Notes, Due 8/15/2021	$	1,100
3.30% 7-Year Senior Notes, Due 2/15/2022	$	800

In connection with the redemptions, the company paid $21 million upon the termination of the fixed to floating rate swap arrangements on the redeemed senior notes and received $47 million upon termination of the related cross-currency interest rate swap arrangements (see Note 8).

The company incurred approximately $142 million of losses on the early extinguishment of debt in October 2019 due to the redemptions and related interest rate swap terminations discussed above.