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 2009, the company transferred management responsibility and related financial reporting and monitoring for a small product line 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 this transfer.

                                     Three Months Ended                         Nine Months Ended
                             September 26,        September 27,        September 26,        September 27,
(Dollars in millions)             2009                 2008                 2009                 2008

Revenues
Analytical Technologies    $ 1,018.6    40.2%   $ 1,085.9    42.0%   $ 2,960.7    40.7%   $ 3,332.6    42.4%
Laboratory Products
and Services                 1,631.3    64.5%     1,610.4    62.2%     4,653.6    64.0%     4,836.1    61.6%

Eliminations                  (118.8 ) (4.7)%      (108.2 ) (4.2)%      (344.0 ) (4.7)%      (317.0 ) (4.0)%

                           $ 2,531.1     100%   $ 2,588.1     100%   $ 7,270.3     100%   $ 7,851.7     100%

Sales in the third quarter of 2009 were $2.53 billion, a decrease of $57 million from the third quarter of 2008. Aside from the effects of currency translation and acquisitions, net of divestitures (discussed in total and by segment below), revenues decreased from 2008 revenues by $49 million (2%) due to lower revenues at existing businesses as a result of decreased demand, offset in part by price increases. Sales of equipment were particularly affected as the company believes customers reduced purchases due to the global market downturn. Sales of consumables grew, however, and were not as significantly affected by the severe economic conditions.

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 2009 and 2008. The principal acquisition in the first nine months of 2009 was Biolab, an Australia-based provider of analytical instruments, life science consumables and laboratory equipment in April 2009. In October 2009, the company acquired B.R.A.H.M.S. AG, a leading provider of specialty diagnostic tests, as well as intensive care treatments and prenatal screening.

In the third quarter of 2009, the company's operating income and operating income margin were $276 million and 10.9%, respectively, compared with $286 million and 11.1%, respectively, in 2008. (Operating income margin is operating income divided by revenues.) The decrease in operating income was due to lower profitability at existing businesses resulting from decreased revenues offset in part by price increases and productivity improvements including lower operating costs following restructuring actions and global sourcing initiatives. The decrease in operating income was offset in part by a $4 million decrease in amortization expense in 2009.

The company's effective tax rates were 10.4% and 16.9% in the third quarter of 2009 and 2008, respectively. The decrease in the effective tax rate was primarily due to reduced earnings in higher tax jurisdictions. The company currently expects its tax rate for the full year to be approximately 10% - 12%.

Income from continuing operations increased to $221 million in the third quarter of 2009, from $215 million in the third quarter of 2008, primarily due to a lower tax rate, offset in part by the items discussed above that decreased operating income.

During the first nine months of 2009, the company's cash flow from operations totaled $1.12 billion, compared with $960 million for the first nine months of 2008. The increase resulted primarily from decreased investment in working capital items, particularly accounts receivable and inventory.

As of September 26, 2009, the company's outstanding debt totaled $2.02 billion, of which approximately $0.9 billion is convertible debt, at conversion prices ranging from $23.73 to $40.20 per share. As of September 26, 2009, $640 million of the convertible debt was currently convertible. Although the company's experience is that convertible debentures are not normally converted by investors until close to their maturity date, it is possible that debentures could be converted prior to their maturity date if, for example, a holder perceives the market for the debentures to be weaker than the market for the common stock. 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. Should holders elect to convert, the company intends to draw on its revolving credit facility to fund any principal payments in excess of $67 million which has been classified as a current liability in the accompanying balance sheet. The facility is an unsecured revolving credit agreement expiring in 2012 with available capacity of $946 million at September 26, 2009.

The company believes that its existing cash and short-term investments of $1.76 billion as of September 26, 2009, 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 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 2008, describe the significant

Critical Accounting Policies (continued)

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 2009.

Results of Operations

Third Quarter 2009 Compared With Third Quarter 2008

Continuing Operations

Sales in the third quarter of 2009 were $2.53 billion, a decrease of $57 million from the third quarter of 2008. The unfavorable effects of currency translation resulted in a decrease in revenues of $47 million in 2009. Sales increased $39 million due to acquisitions, net of divestitures. Aside from the effects of currency translation and acquisitions, net of divestitures, revenues decreased $49 million (2%) primarily due to decreased demand which the company believes is due to economic uncertainty offset in part by price increases, as described by segment below. Sales decreased in North America and Europe but grew modestly in Asia.

In the third quarter of 2009, operating income and operating income margin were $276 million and 10.9%, respectively, compared with $286 million and 11.1%, respectively, in the third quarter of 2008. The decrease in operating income was due to lower profitability at existing businesses resulting from decreased revenues offset in part by price increases and productivity improvements including lower operating costs following restructuring actions and global sourcing initiatives. The decrease in operating income was offset in part by a $4 million decrease in amortization expense in 2009.

In the third quarter of 2009, the company recorded restructuring and other costs, net, of $14 million, including $1 million of charges to cost of revenues related to accelerated depreciation on manufacturing assets to be abandoned due to facility consolidations and a net gain of $0.3 million in selling, general and administrative expenses primarily for settlement of certain pre-merger Fisher product liability-related matters, offset in part by transaction costs related to the acquisition of B.R.A.H.M.S. The company incurred $12 million of cash costs primarily for actions in response to the downturn in the economy and reduced revenues including severance to reduce headcount at several businesses and abandoned facility expenses at businesses that have been or are being consolidated. The company also incurred non-cash costs of $1 million, primarily for asset write-downs at abandoned facilities. In the third quarter of 2008, the company recorded restructuring and other costs, net, of $15 million, including $13 million of cash costs, primarily for severance to reduce headcount at several businesses and abandoned facilities expenses at businesses that have been consolidated, and 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.

As of October 30, 2009, the company has identified restructuring actions that will result in additional charges of approximately $43 million, primarily in the remainder of 2009 and the first half of 2010. Annual cost savings associated with actions initiated in late 2008 and through October 30, 2009 are expected to total approximately $117 million, beginning primarily in 2009, and to a lesser extent, 2010.

Results of Operations (continued)

The company's revenues and profitability decreased in the first nine months of 2009 compared to the first nine months of 2008. The company believes the decreases are primarily due to the global economic downturn. Should the downturn continue indefinitely or worsen such that the company's projections of profitability for 2009 and future years decrease materially, impairment of goodwill and acquisition-related intangible assets could occur. These assets totaled $8.79 billion and $6.14 billion, respectively, at September 26, 2009.

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 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.

                                                                        Three Months Ended
                                                              September 26,     September 27,
(Dollars in millions)                                                  2009              2008   Change

Revenues
  Analytical Technologies                                   $       1,018.6   $       1,085.9     (6)%
  Laboratory Products and Services                                  1,631.3           1,610.4       1%
  Eliminations                                                       (118.8 )          (108.2 )    10%

  Consolidated Revenues                                     $       2,531.1   $       2,588.1     (2)%

Operating Income
  Analytical Technologies                                   $         202.7   $         228.8    (11)%
  Laboratory Products and Services                                    234.8             224.9       4%

  Subtotal Reportable Segments                                        437.5             453.7     (4)%

  Cost of Revenues Charges                                             (1.0 )               -
  Selling, General and Administrative (Costs) Income, Net               0.3                 -
  Restructuring and Other Costs, Net                                  (13.1 )           (15.4 )
  Amortization of Acquisition-related Intangible Assets              (148.2 )          (152.0 )

  Consolidated Operating Income                             $         275.5   $         286.3     (4)%

Income from the company's reportable segments decreased 4% to $438 million in the third quarter of 2009 due primarily to lower profitability at existing businesses, resulting from decreased revenues offset in part by price increases and productivity improvements including lower operating costs following restructuring actions and global sourcing initiatives.

                         THERMO FISHER SCIENTIFIC INC.

Results of Operations (continued)

 Analytical Technologies

                                       Three Months Ended
                            September 26,     September 27,
(Dollars in millions)                2009              2008      Change

Revenues                  $       1,018.6   $       1,085.9        (6)%

Operating Income Margin             19.9%             21.1%   (1.2) pt.

Sales in the Analytical Technologies segment decreased $67 million to $1.02 billion in the third quarter of 2009. The unfavorable effects of currency translation resulted in a decrease of $20 million in 2009. Sales increased $1 million due to acquisitions, net of divestitures. In addition to the changes in revenue resulting from currency translation and acquisitions, net of divestitures, revenues decreased $48 million (4%) primarily due to lower demand offset in part by increased prices. Demand in industrial markets for environmental and process control instruments was particularly soft, which the company believes was primarily due to the global economic downturn. This weakness was offset in part by an increase in sales of specialty diagnostics and bioscience offerings which have been less severely affected by economic conditions.

Operating income margin was 19.9% in the third quarter of 2009 and 21.1% in the third quarter of 2008. The decrease resulted from lower profitability from decreased revenues offset in part by price increases and productivity improvements, including lower operating costs following restructuring actions and global sourcing initiatives.

 Laboratory Products and Services

                                       Three Months Ended
                            September 26,     September 27,
(Dollars in millions)                2009              2008    Change

Revenues                  $       1,631.3   $       1,610.4        1%

Operating Income Margin             14.4%             14.0%   0.4 pt.

Sales in the Laboratory Products and Services segment increased $21 million to $1.63 billion in the third quarter of 2009. The unfavorable effects of currency translation resulted in a decrease of $29 million in 2009. Sales increased $38 million due to acquisitions, principally Biolab. In addition to the changes in revenue resulting from currency translation and acquisitions, revenues increased $12 million (1%) primarily due to higher sales of consumables which have been less severely affected by economic conditions. The increase was offset in part by lower demand for laboratory equipment and reduced sales of products purchased from a supplier discussed below. The company believes the reduced demand for laboratory equipment was in part due to customers delaying purchases because of the global economic downturn.

In July 2008, the company and a supplier of its healthcare market channel extended an existing agreement for two years through 2010. Under the revised agreement, the company's revenues from the sale of products purchased from the supplier decreased $20 million, $16 million and $16 million in the first, second and third quarters, respectively, of 2009 and the company expects its sales volume of products purchased from the supplier to decrease by approximately $8 - $10 million in the fourth quarter of 2009 for a total annualized decrease in revenues of approximately $60 - $62 million from 2008.

Results of Operations (continued)

Operating income margin was 14.4% in the third quarter of 2009 and 14.0% in the third quarter of 2008. The increase primarily resulted from higher profitability from increased revenues as well as price increases and productivity improvements, including lower operating costs following restructuring actions and global sourcing initiatives.

Other Expense, Net

The company reported other expense, net, of $29 million and $28 million in the third quarter of 2009 and 2008, respectively (Note 4). Other expense, net, includes interest income, interest expense, equity in earnings of unconsolidated subsidiaries and other items, net. Interest income decreased to $3 million in the third quarter of 2009 from $15 million in the same period last year primarily due to lower interest rates on invested cash. Interest expense decreased to $29 million in the third quarter of 2009 from $40 million in the third quarter of 2008 primarily as a result of a reduction in debt and lower interest rates on variable rate debt.

Provision for Income Taxes

The company's effective tax rates were 10.4% and 16.9% in the third quarter of 2009 and 2008, respectively. The decrease in the effective tax rate was primarily due to reduced earnings in higher tax jurisdictions. The company currently expects its tax rate for the full year to be approximately 10% - 12%.

Contingent Liabilities

At the end of the third quarter 2009, the company was contingently liable with respect to certain legal proceedings and related matters. An unfavorable outcome in one or more of the matters described under "Litigation and Related Contingencies" in Note 12 could materially affect the company's financial position as well as its results of operations and cash flows.

Recent Accounting Pronouncements

In September 2006, the FASB issued a pronouncement concerning fair value measurement accounting. This guidance defines fair value, establishes a framework for measuring fair value and expands disclosures about fair value measurements. The rule applies to other accounting pronouncements that require or permit fair value measurements but does not require any new fair value measurements. The pronouncement 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. There was no material effect from adoption.

In December 2007, the FASB revised the accounting rules concerning business combinations. This revised guidance 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 rules require 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. The revised guidance was effective for the company, on a prospective basis, beginning January 1, 2009. There was no impact upon adoption; however, the rule changes may materially affect the accounting for any future business combinations.

In December 2007, the FASB issued new rules on noncontrolling interests in consolidated financial statements. The noncontrolling interest guidance changed the accounting for minority interests, which are reclassified as

Results of Operations (continued)

noncontrolling interests and classified as a component of equity. This guidance was effective for the company beginning January 1, 2009, and there was no effect from adoption.

In March 2008, the FASB issued a pronouncement pertaining to disclosures about derivative instruments and hedging activities. This guidance 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. The rule was effective for the company beginning January 1, 2009, and there was no material effect from adoption.

In May 2008, the FASB issued new rules on the accounting for convertible debt instruments that may be settled in cash upon conversion, including partial cash settlement of such debt instruments. The rules require 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. The new guidance was effective for the company beginning January 1, 2009. The rules required adjustment of prior periods to conform to current accounting. The company's cash payments for interest have not been affected, but adoption increased the company's reported interest expense in a manner that reflects interest rates of similar non-convertible debt. Interest expense in the third quarter and first nine months of 2008, as adjusted for adoption of this rule, increased $6 million and $16 million, respectively, over the previously reported amounts.

In June 2008, the FASB issued guidance on determining whether instruments granted in share-based payment transactions are participating securities. This guidance clarifies that share-based payment awards that entitle their holders to receive nonforfeitable dividends before vesting should be considered participating securities. The guidance was effective for the company beginning January 1, 2009. The rule required adjustment of prior periods to conform to current accounting. Adoption had a nominal effect on the numerator and, for diluted presentation, the denominator in the calculation of earnings per share for all periods presented.

In April 2009, the FASB issued guidance on the recognition and presentation of other-than-temporary impairments. This guidance amends the prior other-than-temporary impairment guidance for certain debt securities and will require the investor to assess the likelihood of selling the debt security prior to recovery of its cost basis. If an investor is able to meet the criteria to assert that it does not intend to sell the debt security and more likely than not will not be required to sell the debt security before its anticipated recovery, impairment charges related to credit losses would be recognized in earnings whereas impairment charges related to non-credit losses would be reflected in other comprehensive income. The company elected early adoption of this rule in the first quarter of 2009. Adoption did not materially affect the company's financial statements.

In April 2009, the FASB issued guidance on providing interim disclosures about fair value of financial instruments. This new guidance requires the fair value disclosures that were previously disclosed only annually to be disclosed now on an interim basis. This guidance was effective for the company in the second quarter of 2009, and the additional disclosures required have been made.

In May 2009, the FASB issued a pronouncement on subsequent event accounting. The guidance identifies the following: the period after the balance sheet date during which management shall evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements; the circumstances under which an entity shall recognize events or transactions occurring after the balance sheet date in its financial statements; and the disclosures that an entity shall make about events or transactions that occurred after the balance sheet date. The pronouncement was effective for the company's second quarter 2009, and there was no effect from adoption.

Results of Operations (continued)

In June 2009, the FASB issued guidance on the FASB Accounting Standards Codification and the hierarchy of generally accepted accounting principles. The FASB Accounting Standards Codification, or the Codification, is the single source of authoritative nongovernmental generally accepted accounting principles in the U.S. (GAAP). The Codification was effective for interim and annual periods ending after September 15, 2009. The adoption of the Codification had no impact on the company's financial position or results of operations.

In September 2009, the Emerging Issues Task Force issued new rules pertaining to the accounting for revenue arrangements with multiple deliverables. The new rules provide an alternative method for establishing fair value of a deliverable when vendor specific objective evidence cannot be determined. The guidance . . .