8-KRegulation FD

THERMO FISHER SCIENTIFIC INC. 8-K Report, Regulation FD Disclosure (Apr 17, 2017)

Filed April 17, 2017For Securities:TMO

Summary

Thermo Fisher Scientific Inc. (TMO) filed an 8-K on April 17, 2017, to disclose significant organizational and accounting changes effective January 1, 2017. The company realigned certain product lines between its Life Sciences Solutions and Laboratory Products and Services segments to better align with strategic focus and customer needs. This includes moving plastics for cell culture and vaccines/biologics, sample preparation and analysis, and production chemicals to Life Sciences Solutions, while relocating its biochemical product line to Laboratory Products and Services. Additionally, TMO adopted new accounting standards for employee share-based payments (ASU 2016-09), specifically changing the presentation of excess tax benefits and employee taxes paid for share withholding on the statement of cash flows retrospectively. The impact of recognizing excess tax benefits in the income statement will be prospective. Investors can find recast historical financial data reflecting these changes on the company's website, which will be incorporated into the first-quarter 2017 financial report.

Key Highlights

  • 1Thermo Fisher Scientific has realigned product lines between its Life Sciences Solutions and Laboratory Products and Services segments for strategic and customer alignment.
  • 2Key product transfers include plastics for cell culture/vaccines, sample preparation, production chemicals (to Life Sciences), and biochemicals (to Laboratory Products).
  • 3The company adopted ASU 2016-09 concerning employee share-based payment accounting.
  • 4Retrospective adjustments have been made to the statement of cash flows for excess tax benefits and employee taxes paid on share withholding.
  • 5The prospective impact of recognizing excess tax benefits in net income will affect future periods.
  • 6Recast historical financial data reflecting these segment and cash flow changes is available on the company's investor relations website.
  • 7These changes will be fully reflected in the first-quarter 2017 financial results.

Frequently Asked Questions

The company is realigning product lines to better align with its strategic focus and to serve its customers more effectively. This involves moving products to the segment where they are perceived to have a stronger strategic fit.

Thermo Fisher is adopting Accounting Standards Update (ASU) 2016-09, which introduces changes to how employee share-based payments are accounted for, particularly regarding the presentation of excess tax benefits and employee taxes paid when shares are withheld.

The ASU 2016-09 amendments related to the statement of cash flows presentation of excess tax benefits and employee taxes paid when shares are withheld have been applied retrospectively. This means prior period cash flow statements have been adjusted. However, the recognition of excess tax benefits in the income statement will be applied prospectively, affecting only future net income.

Investors can find unaudited historical financial data that has been recast to reflect the new segment structure and revised operating cash flow data on Thermo Fisher Scientific's corporate website (www.thermofisher.com) under the 'Investors' section, specifically in the 'GAAP/Non-GAAP Reconciliation & Financial Package' area.