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. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," "seeks," "estimates" and similar expressions are intended to identify forward-looking statements. 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 of Results of Operations and Liquidity

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 two business segments: Analytical Technologies and Laboratory Products and Services. During the first quarter of 2008, the company transferred management responsibility and related financial reporting and monitoring for several small product lines between segments. The company has historically moved a product line between segments when a shift in strategic focus of either the product line or a segment more closely aligns the product line with a segment different than that in which it had previously been reported. Prior period segment information has been reclassified to reflect these transfers.

Revenues
                                        Three Months Ended                               Nine Months Ended
(Dollars in millions)       September 27, 2008      September 29, 2007      September 27, 2008      September 29, 2007

Analytical Technologies    $    1,086.5    42.0%   $    1,025.7    42.7%   $    3,334.5    42.5%   $    3,034.4    42.6%
Laboratory Products and
Services                        1,609.8    62.2%        1,462.5    60.9%        4,834.6    61.6%        4,345.7    61.0%
Eliminations                     (108.2 ) (4.2%)          (87.0 ) (3.6%)         (317.4 ) (4.1%)         (254.8 ) (3.6%)

                           $    2,588.1     100%   $    2,401.2     100%   $    7,851.7     100%   $    7,125.3     100%

Sales in the third quarter of 2008 were $2.59 billion, an increase of $187 million from the third quarter of 2007. Aside from the effects of acquisitions, divestitures and currency translation (discussed in total and by segment below), revenues increased over 2007 revenues by $83 million due to higher revenues at existing businesses as a result of increased demand, discussed below, and, to a lesser extent, price increases.

Overview of Results of Operations and Liquidity (continued)

The company's strategy is to augment internal growth at existing businesses with complementary acquisitions such as those completed in 2008 and 2007. The principal acquisitions included La-Pha-Pack, a manufacturer and provider of chromatography consumables and related accessories in December 2007; Priority Solutions International, a third-party logistics provider to the pharmaceutical and healthcare industries in October 2007; NanoDrop Technologies, Inc., a supplier of micro UV-Vis spectrophotometry and fluorescence scientific instruments in October 2007 and Qualigens Fine Chemicals, an India-based chemical manufacturer and supplier in September 2007.

In the third quarter of 2008, the company's operating income and operating income margin were $286 million and 11.1%, respectively, compared with $254 million and 10.6%, respectively, in 2007. (Operating income margin is operating income divided by revenues.) The increase in operating income was due to higher profitability at existing businesses resulting from incremental revenues including price increases and productivity improvements including global sourcing and lower operating costs following restructuring actions. These increases were offset in part by an $11 million increase in amortization expense as a result of acquisition-related intangible assets from 2007 and 2008 acquisitions and a $7 million increase in restructuring and other costs in 2008.

The company's effective tax rate was 17.4% and 7.1% in the third quarter of 2008 and 2007, respectively. The tax provision in the third quarter of 2008 was unfavorably affected by an increase in income in higher tax jurisdictions. Effective in the fourth quarter of 2008, the U.S. extended the tax credit for research and development activities. The company currently expects its tax rate for the full year to be approximately 17% - 18%. The tax provision in the third quarter of 2007 was favorably affected by a one-time $21 million (or 8.8 percentage point) benefit of enacted reductions in tax rates in the United Kingdom, Denmark and Germany on the company's deferred tax balances.

Income from continuing operations decreased slightly to $218 million in the third quarter of 2008, from $219 million in the third quarter of 2007, primarily due to the higher tax rate in 2008 as well as increased amortization and restructuring expenses offset by the items discussed above that increased operating income.

During the first nine months of 2008, the company's cash flow from operations totaled $960 million, compared with $948 million for the first nine months of 2007. The increase resulted from improved cash flow at existing businesses offset in part by higher payments for income taxes and an increased investment in working capital items.

As of September 27, 2008, the company's outstanding debt totaled $2.18 billion, of which approximately $974 million is convertible debt, at conversion prices ranging from $23.73 to $40.20 per share. Although the company's experience is that convertible debentures are not normally converted by investors until close to their maturity date, it is possible, particularly in the current uncertain financial climate, that debentures could be converted prior to their maturity date. Upon an investor's election to convert, the company is required to pay the original principal portion of these debentures in cash, and the balance of the conversion value in either cash or stock, at the company's election. Holders of the company's $344 million Floating Rate Senior Convertible Debentures, due 2033, also have rights to put the debentures to the company for par value in December 2008. Should holders elect to convert or exercise their put rights, the company intends to draw on its revolving credit facility to fund substantially all of these principal payments. The facility is an unsecured revolving credit agreement expiring in 2012 with available capacity of $954 million at September 27, 2008.

The company believes that its existing cash and short-term investments of $1.25 billion as of September 27, 2008, and the company's future cash flow from operations together with available borrowing capacity under its revolving credit agreement, are sufficient to meet the cash requirements of its businesses for the foreseeable future, including at least the next 24 months.

Critical Accounting Policies

Preparation of financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. Management believes the most complex and sensitive judgments, because of their significance to the consolidated financial statements, result primarily from the

Critical Accounting Policies (continued)

need to make estimates about the effects of matters that are inherently uncertain. Management's Discussion and Analysis and Note 1 to the Consolidated Financial Statements in the company's Form 10-K for 2007, describe the significant accounting estimates and policies used in preparation of the consolidated financial statements. Actual results in these areas could differ from management's estimates. There have been no significant changes in the company's critical accounting policies during the first nine months of 2008.

Results of Operations

Third Quarter 2008 Compared With Third Quarter 2007

Continuing Operations

Sales in the third quarter of 2008 were $2.59 billion, an increase of $187 million from the third quarter of 2007. The favorable effects of currency translation resulted in an increase in revenues of $39 million in 2008. Sales increased $65 million due to acquisitions, net of divestitures. Aside from the effect of currency translation and acquisitions, net of divestitures, revenues increased $83 million primarily due to increased demand and, to a lesser extent, price increases, as described by segment below. Growth was very strong in Asia and modest in North America and Europe.

In the third quarter of 2008, operating income and operating income margin were $286 million and 11.1%, respectively, compared with $254 million and 10.6%, respectively, in the third quarter of 2007. The increase in operating income was due to higher profitability at existing businesses resulting from incremental revenues including price increases and productivity improvements including global sourcing and lower operating costs following restructuring actions. These increases were offset in part by an $11 million increase in amortization expense as a result of acquisition-related intangible assets from 2007 and 2008 acquisitions and a $7 million increase in restructuring and other costs in 2008.

In the third quarter of 2008, the company recorded restructuring and other costs, net, of $15 million. The company incurred $13 million of cash costs primarily for severance to reduce headcount at several businesses and abandoned facility expenses at businesses that have been or are being consolidated. In addition to the cash costs, the company recorded a $3 million charge for in-process research and development at an acquired business offset by net gains of $1 million on the sale of abandoned real estate and equipment. In the third quarter of 2007, the company recorded restructuring and other costs, net, of $9 million, including $7 million of cash costs, primarily for severance, abandoned facilities and relocation expenses at businesses that have been consolidated. In addition, the company recorded a $2 million loss, in 2007, on the sale of a small business unit.

The company expects to record a charge in the fourth quarter for severance related to restructuring plans initiated through October 30, 2008, totaling approximately $12 million for cost reduction measures at several businesses. The actions are expected to result in annual cost savings of approximately $26 million beginning in the fourth quarter of 2008 and the first quarter of 2009.

Segment Results

The company's management evaluates segment operating performance using operating income before certain charges to cost of revenues, 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; and amortization of acquisition-related intangible assets. The company uses these measures because they help management understand and evaluate the segments' core operating results and facilitate comparison of performance for determining compensation (Note 3). Accordingly, the following segment data is reported on this basis.

                         THERMO FISHER SCIENTIFIC INC.

Third Quarter 2008 Compared With Third Quarter 2007 (continued)

                                                                      Three Months Ended
                                                            September 27,      September 29,
(Dollars in millions)                                                2008               2007    Change

Revenues
    Analytical Technologies                              $        1,086.5   $        1,025.7        6%
 Laboratory Products and Services                                 1,609.8            1,462.5       10%
 Eliminations                                                      (108.2 )            (87.0 )     24%

 Consolidated Revenues                                   $        2,588.1   $        2,401.2        8%

Operating Income
  Analytical Technologies                                $          229.2   $          198.6       15%
  Laboratory Products and Services                                  224.5              206.1        9%

 Subtotal Reportable Segments                                       453.7              404.7       12%

 Cost of Revenues Charges                                               -               (0.4 )
 Restructuring and Other Costs, Net                                 (15.4 )             (8.8 )
 Amortization of Acquisition-related Intangible Assets             (152.0 )           (141.5 )

 Consolidated Operating Income                           $          286.3   $          254.0       13%

Income from the company's reportable segments increased 12% to $454 million in the third quarter of 2008 due primarily to higher profitability at existing businesses, resulting from incremental revenues including price increases and productivity improvements including global sourcing and lower operating costs following restructuring actions. This improvement was offset in part by higher commodity prices.

  Analytical Technologies
                                        Three Months Ended
                             September 27,      September 29,
(Dollars in millions)                 2008               2007      Change

Revenues                  $        1,086.5   $        1,025.7          6%

Operating Income Margin              21.1%              19.4%    1.7 pts.

Sales in the Analytical Technologies segment increased $61 million to $1.09 billion in the third quarter of 2008. The favorable effects of currency translation resulted in an increase of $23 million in 2008. Sales increased $14 million due to acquisitions, net of divestitures. In addition to the changes in revenue resulting from currency translation and acquisitions, net of divestitures, revenues increased $24 million primarily due to higher demand and, to a lesser extent, increased prices. The higher demand was due, in part, to the introduction of new products. Growth slowed from the first half of 2008 as the company believes economic uncertainty towards the end of the quarter slowed certain customer decisions concerning spending.

Operating income margin was 21.1% in the third quarter of 2008 and 19.4% in the third quarter of 2007. The increase resulted from profit on incremental revenues and, to a lesser extent, price increases and productivity improvements, including global sourcing and lower operating costs following restructuring actions.

                         THERMO FISHER SCIENTIFIC INC.

Third Quarter 2008 Compared With Third Quarter 2007 (continued)

  Laboratory Products and Services
                                          Three Months Ended
                             September 27,      September 29,
(Dollars in millions)                 2008               2007         Change

Revenues                  $        1,609.8   $        1,462.5            10%

Operating Income Margin              13.9%              14.1%     (0.2) pts.

Sales in the Laboratory Products and Services segment increased $147 million to $1.61 billion in the third quarter of 2008. Sales increased $57 million due to acquisitions, net of divestitures. The favorable effects of currency translation resulted in an increase of $16 million in 2008. In addition to the changes in revenue resulting from acquisitions, divestitures and currency translation, revenues increased $74 million primarily due to higher demand and, to a lesser extent, increased prices. Sales made through the segment's research market and healthcare market channels and revenues from the company's biopharma services were particularly strong.

In July 2008, the company and a customer of its healthcare market channel extended an existing agreement for two years through 2010. Under the revised agreement, the company expects its sales volume to the customer to decrease from prior comparative periods by approximately $15 million over the remainder of 2008 and by approximately $60 million in 2009 for a total annualized decrease in revenues of approximately $75 million from present levels.

Operating income margin was 13.9% in the third quarter of 2008 and 14.1% in the third quarter of 2007. The decrease primarily resulted from material cost inflation, particularly affecting commodities such as raw resin, steel and plastics as well as higher fuel and freight costs, substantially offset by profit on incremental revenue and, to a lesser extent, price increases and productivity improvements, including global sourcing and lower operating costs following restructuring actions.

Other Expense, Net

The company reported other expense, net, of $22 million and $19 million in the third quarter of 2008 and 2007, respectively (Note 4). Other expense, net, includes interest income, interest expense, equity in earnings of unconsolidated subsidiaries and other items, net. See discussion below concerning a recent accounting pronouncement that will increase non-cash interest expense in 2009.

Provision for Income Taxes

The company's effective tax rate was 17.4% and 7.1% in the third quarter of 2008 and 2007, respectively. The tax provision in the third quarter of 2008 was unfavorably affected by an increase in income in higher tax jurisdictions. Effective in the fourth quarter of 2008, the U.S. extended the tax credit for research and development activities. The company currently expects its tax rate for the full year to be approximately 17% - 18%. The tax provision in the third quarter of 2007 was favorably affected by a one-time $21 million (or 8.8 percentage point) benefit of enacted reductions in tax rates in the United Kingdom, Denmark and Germany on the company's deferred tax balances.

Contingent Liabilities

At the third quarter end 2008, the company was contingently liable with respect to certain legal proceedings and related matters. As described under "Litigation and Related Contingencies" in Note 12, an unfavorable outcome in the matters described therein could materially affect the company's financial position as well as its results of operations and cash flows.

Third Quarter 2008 Compared With Third Quarter 2007 (continued)

Recent Accounting Pronouncements

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." SFAS No. 157 defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. This statement applies to other accounting pronouncements that require or permit fair value measurements. This statement does not require any new fair value measurements. SFAS No. 157 was effective for the company's monetary assets and liabilities in the first quarter of 2008 and for non-financial assets and liabilities beginning January 1, 2009 (Note 9). The company does not believe the impact of adopting the fair value guidance outlined in SFAS No. 157 to its non-financial assets and liabilities will have a material impact on its financial statements.

In February 2007, the FASB issued SFAS No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities - including an Amendment of FASB Statement No. 115." SFAS No. 159 permits entities to measure eligible financial assets, financial liabilities and certain other assets and liabilities at fair value on an instrument-by-instrument basis. The company adopted SFAS No. 159 beginning January 1, 2008. Adoption of the standard did not result in any change in the valuation of the company's assets and liabilities.

In December 2007, the FASB issued SFAS No. 141R, "Business Combinations." SFAS No. 141R does the following: requires the acquiring entity in a business combination to recognize all (and only) the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date fair value as the measurement objective for all assets acquired and liabilities assumed; and requires the acquirer to disclose certain information to enable users to understand the nature and financial effect of the business combination. The statement requires that cash outflows such as transaction costs and post-acquisition restructuring be charged to expense instead of capitalized as a cost of the acquisition. Contingent purchase price will be recorded at its initial fair value and then re-measured as time passes through adjustments to net income. SFAS No. 141R is effective for the company, on a prospective basis, beginning January 1, 2009. The company expects no material effect at the adoption date; however, upon adoption, this statement may materially affect the accounting for any future business combinations.

In December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements." SFAS No. 160 will change the accounting for minority interests, which will be reclassified as noncontrolling interests and classified as a component of equity. SFAS No. 160 is effective for the company beginning January 1, 2009. The company does not expect a material effect from adoption of this standard.

In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities." SFAS No. 161 requires disclosures of how and why an entity uses derivative instruments; how derivative instruments and related hedged items are accounted for; and how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. SFAS No. 161 is effective for the company beginning January 1, 2009. The company does not expect a material effect from adoption of this standard.

In May 2008, the FASB issued FSP APB No. 14-1, "Accounting for Convertible Debt Instruments That May Be Settled in Cash upon Conversion (Including Partial Cash Settlement)." FSP APB No. 14-1 requires the issuers of certain convertible debt instruments that may be settled in cash (or other assets) on conversion to separately account for the liability (debt) and equity (conversion option) components in a manner that reflects the issuer's nonconvertible debt borrowing rate when interest cost is recognized in subsequent periods. FSP ABP No. 14-1 is effective for the company beginning January 1, 2009. Prior periods will be restated as if the new rule had been in effect in prior periods. Early adoption is not permitted. While the company's cash payments for interest will not be affected, based on current debt outstanding, the adoption of FSP APB No. 14-1 will increase the company's reported interest expense in a manner that reflects interest rates of similar non-convertible debt. The company expects that annual interest expense will increase by approximately $23 million, which will unfavorably affect earnings per share by approximately $.03 per year following adoption of the rule.

Third Quarter 2008 Compared With Third Quarter 2007 (continued)

In June 2008, the FASB issued FSP EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities." FSP EITF 03-6-1 clarifies that share-based payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered participating securities. As participating securities, these instruments should be included in the calculation of basic earnings per share. FSP EITF 03-6-1 is effective for the company beginning January 1, 2009. The company does not expect a material effect from adoption of this rule.

Discontinued Operations

During the third quarter of 2008, the company received additional proceeds from a business sold in 2003, resulting in an after-tax gain of $3 million.

First Nine Months 2008 Compared With First Nine Months 2007

Continuing Operations

Sales in the first nine months of 2008 were $7.85 billion, an increase of $726 million from the first nine months of 2007. The favorable effects of currency translation resulted in an increase in revenues of $214 million in 2008. Sales increased $157 million due to acquisitions, net of divestitures. Aside from the effect of currency translation and acquisitions, net of divestitures, revenues increased $355 million primarily due to increased demand and, to a lesser extent, price increases, as described by segment below. Growth was very strong in Asia, moderate in North America and modest in Europe.

In the first nine months of 2008, operating income and operating income margin were $907 million and 11.6%, respectively, compared with $689 million and 9.7%, respectively, in the first nine months of 2007. The increase in operating income was due to higher profitability at existing businesses resulting from incremental revenues including price increases, merger integration savings and productivity improvements including global sourcing and lower operating costs following restructuring actions. The increase also resulted from $10 million of lower restructuring and other costs in 2008, principally due to a curtailment gain in 2008 associated with a pension plan in the U.S. and from $47 million of lower merger-related cost of revenues charges. These increases were offset in part by a $32 million increase in amortization expense as a result of acquisition-related intangible assets from 2007 and 2008 acquisitions.

In the first nine months of 2008, the company recorded restructuring and other costs, net, of $16 million, including $1 million of charges to cost of revenues related to the sale of inventories revalued at the date of acquisition and accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations. The company incurred $25 million of cash costs primarily for severance for headcount reductions and abandoned facility expenses at businesses that have been or are being consolidated and recorded a $5 million loss from a litigation-related matter assumed as part of the merger with Fisher in 2006, a $3 million charge for in-process research and development at an acquired business and a $2 million loss on the sale of a business. These charges were offset by an $18 million gain on the curtailment of a pension plan in the U.S. and a $2 million gain on the sale of real estate and equipment (Note 11). In the first nine months of 2007, the company recorded restructuring and other costs, . . .