Exhibit 99.2
THERMO ELECTRON CORPORATION
Supplemental Financial Information
Restated Presentation for Sale of Spectra-Physics
Schedule A. Restated Statement of Operations (Unaudited), GAAP and Adjusted:
2001 to 2003
Schedule B. Reconciliation of Previously Reported GAAP P&L to Restated GAAP P&L:
Q1-03 to Q1-04
Schedule C. Reconciliation of Previously Provided Adjusted P&L to Restated
Adjusted P&L: Q1-03 to Q1-04
Schedule D. Reconciliation of Previously Reported GAAP and Restated GAAP Results
to Previously Provided Adjusted and Restated Adjusted Results: Q1-03
to Q1-04
Restated Presentation
On June 1, 2004, Thermo announced that it entered into an agreement to sell
substantially all of its Optical Technologies Segment, Spectra-Physics. The
execution of this agreement resulted in Spectra-Physics being treated as a
discontinued operation in Thermo's financial statements beginning in the second
quarter of 2004, by removing Spectra-Physics from its results of continuing
operations and reporting the business as a discontinued operation. The following
unaudited financial information reflects the effect on Thermo's historical
financial statements of treating Spectra Physics as a discontinued operation.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with generally
accepted accounting principles (GAAP), we present certain non-GAAP financial
measures herein (identified as "adjusted"), which exclude, to the extent such
item would have been included in the most directly comparable GAAP financial
measure: certain charges to cost of revenues; restructuring and other costs/
income; amortization of acquisition-related intangible assets and, in 2001,
goodwill; certain other gains and losses that are either isolated or cannot be
expected to occur again with any regularity or predictability, such as those
arising from the sale of a business or real estate, the sale of our shares in
Thoratec and FLIR Systems, Inc. (we no longer hold shares of FLIR Systems,
Inc.), the tax provisions/benefits related to the previous items, and benefit
from tax credit carryforwards. We exclude these items because they are outside
of our normal operations and we believe that the inclusion of such non-GAAP
measures helps investors to gain a better understanding of our core operating
results.
Thermo's management uses certain of these non-GAAP measures, in addition to GAAP
financial measures, as the basis for measuring the company's core operating
performance and comparing such performance to that of prior periods and to the
performance of our competitors. We believe that this allows for comparisons of
operating results that are consistent over time. Such measures are also used by
management in their financial and operating decision making and for compensation
purposes.
The non-GAAP financial measures of Thermo's results of operations presented
herein are not meant to be considered superior to or a substitute for Thermo's
results of operations prepared in accordance with GAAP. Reconciliations of such
non-GAAP financial measures to the most directly comparable GAAP financial
measures are set forth in the accompanying tables.
Schedule A
Restated Consolidated Statement of Operations
(In thousands except per share amounts)
(Unaudited)
2003 2002 2001
----------------------- ----------------------- -----------------------
Reported(a) Adjusted(b) Reported(a) Adjusted(b) Reported(a) Adjusted(b)
----------- ----------- ----------- ----------- ----------- -----------
Revenues $1,899,378 $1,899,378 $1,849,360 $1,849,360 $1,916,222 $1,916,222
---------- ---------- ---------- ---------- ---------- ----------
Costs and Operating Expenses:
Cost of revenues (c) 1,019,476 1,019,405 1,000,465 991,993 1,047,946 1,029,887
Selling, general, and administrative expenses 510,284 510,284 502,123 502,123 509,800 509,800
Amortization of acquisition-related intangible assets 9,038 - 7,243 - 43,937 -
Research and development expenses 127,996 127,996 131,976 131,976 142,798 142,798
Restructuring and other costs, net (d) 45,200 - 37,691 - 89,390 -
---------- ---------- ---------- ---------- ---------- ----------
1,711,994 1,657,685 1,679,498 1,626,092 1,833,871 1,682,485
---------- ---------- ---------- ---------- ---------- ----------
Operating Income 187,384 241,693 169,862 223,268 82,351 233,737
Interest and Other Income, Net (e) 35,247 6,290 131,500 21,560 39,511 4,679
---------- ---------- ---------- ---------- ---------- ----------
Income from Continuing Operations Before Income Taxes,
Minority Interest, and Cumulative Effect of Change in
Accounting Principle 222,631 247,983 301,362 244,828 121,862 238,416
Provision for Income Taxes (f) (47,421) (66,807) (97,943) (75,358) (45,856) (81,204)
Minority Interest Expense (f) - - - - (36) (36)
---------- ---------- ---------- ---------- ---------- ----------
Income from Continuing Operations Before Cumulative Effect
of Change in Accounting Principle 175,210 181,176 203,419 169,470 75,970 157,176
Loss from Discontinued Operations (net of income tax benefit
of $1,485 in 2003, $5,478 in 2002, and $18,290 in 2001) (2,513) - (9,059) - (25,317) -
Gain (Loss) on Disposal of Discontinued Operations, Net (net
of income tax provision of $8,141 in 2003; includes tax
benefit of $21,008 and $22,741 in 2002 and 2001) 27,312 - 115,370 - (50,440) -
---------- ---------- ---------- ---------- ---------- ----------
Income Before Cumulative Effect of Change in Accounting
Principle 200,009 181,176 309,730 169,470 213 157,176
Cumulative Effect of Change in Accounting Principle - - - - (994) -
---------- ---------- ---------- ---------- ---------- ----------
Net Income (Loss) $ 200,009 $ 181,176 $ 309,730 $ 169,470 $ (781) $ 157,176
========== ========== ========== ========== ========== ==========
Earnings per Share from Continuing Operations Before
Cumulative Effect of Change in Accounting Principle:
Basic $ 1.08 $ 1.21 $ .42
========== ========== ==========
Diluted $ 1.05 $ 1.17 $ .41
========== ========== ==========
Earnings (Loss) per Share (g):
Basic $ 1.23 $ 1.84 $ -
========== ========== ==========
Diluted $ 1.20 $ 1.09 $ 1.73 $ .98 $ - $ .85
========== ========== ========== ========== ========== ==========
Weighted Average Shares:
Basic 162,713 168,572 180,560
========== ========== ==========
Diluted (h) 170,730 170,730 186,611 182,760 183,916 184,387
========== ========== ========== ========== ========== ==========
(a) Reported results were determined in accordance with U.S. generally accepted accounting principles (GAAP). All amounts have been
restated to reflect the treatment of Spectra-Physics as a discontinued operation.
(b) Adjusted results are non-GAAP measures and exclude inventory charges (note c); amortization of acquisition-related intangible
assets and, in 2001, amortization of goodwill; restructuring and other costs/income (note d); certain other income/expense
(note e); the tax consequences of these items and other tax benefit (note f); income (loss) from discontinued operations; gain
(loss) on disposal of discontinued operations; and the cumulative effect of a change in accounting principle.
(c) Reported results in 2003 include $71,000 of charges primarily for the sale of inventories revalued at the date of acquisition.
Reported results in 2002 include charges of $6,041,000 of inventory writedowns for the abandonment of product lines and
$2,431,000 of charges for the sale of inventories revalued at the date of acquisition. Reported results in 2001 include charges
of $18,059,000 of inventory writedowns, principally for the abandonment of product lines.
(d) Reported results in 2003 include restructuring and other items consisting principally of severance; abandoned facility and other
expenses of real estate consolidation; a writedown to disposal value of a product line and a business that were sold in October
2003; net gains on the sale of a product line and property; and legal/advisory fees associated with a reorganization of the
company's non-U.S. subsidiary structure. Reported results in 2002 include restructuring and other items; severance; abandoned
facility and other expenses of real estate consolidation; and legal/advisory fees associated with a reorganization of the
company's non-U.S. subsidiary structure. These items are net of gains on the sale of businesses. Reported results in 2001
include restructuring and other items consisting principally of severance; abandoned facility and other expenses of real estate
consolidation; net losses on sales of businesses; in-process research and development at an acquired business; and investment
banking, legal, and consulting fees, as well as employee-retention costs associated with the company's reorganization announced
in 2000.
(e) Reported results include $16,279,000 of gains from the sale of shares of Thoratec Corporation in 2003, and $13,654,000,
$111,432,000, and $35,117,000 of gains from the sale of shares of FLIR Systems, Inc. in 2003, 2002, and 2001, respectively.
Reported results also include losses of $976,000 and $1,492,000 in 2003 and 2002, respectively, and gains of $1,698,000 in 2001
on the early retirement of debt. These items have been excluded from adjusted results.
(f) Adjusted results exclude $6,645,000 of incremental tax benefit in 2003, $22,585,000 of incremental tax provision in 2002, and
$35,348,000 of incremental tax benefit in 2001, for the items in (b) through (e) and in 2003 exclude $9,026,000 of tax benefit
from the reversal of a valuation allowance due to expected utilization of foreign tax credit carryforwards and $3,715,000 of tax
benefit from the sale of a business.
(g) Reported earnings per share excludes interest expense on convertible debentures of $4,830,000 and $13,986,000, net of tax, in
2003 and 2002, respectively, for the assumed conversion of such convertible debentures. Adjusted earnings per share excludes
interest expense on convertible debentures of $4,830,000, $10,176,000, and $266,000, net of tax, in 2003, 2002, and 2001,
respectively, for the assumed conversion of such convertible debentures.
(h) Adjusted weighted average diluted shares reflect the dilutive effect on the convertible debentures of the adjustments to net
income as described in notes (b) through (g).
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Thermo Electron Corporation
GAAP P&L (as previously reported and restated)
Schedule B
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
Q1-03 Q2-03
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Reported Physics Restated Reported Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 500,205 (45,577) 454,628 516,405 (49,137) 467,268
Cost of Revenues 276,367 (32,306) 244,061 283,260 (33,113) 250,147
SG&A (a) 136,727 (10,831) 125,896 140,319 (12,575) 127,744
R&D 37,321 (4,612) 32,709 37,132 (4,522) 32,610
Restructuring & Other Costs (net) 8,102 (1,152) 6,950 4,872 (184) 4,688
Amortization of acquisition-related intangible assets 2,392 (281) 2,111 2,540 (207) 2,333
------------------------------------------------------------------
Operating Income 39,296 3,605 42,901 48,282 1,464 49,746
Interest Income (b) 7,685 (13) 7,672 7,077 (3) 7,074
Interest Expense (b) (6,904) 175 (6,729) (5,433) 76 (5,357)
Other Income (net) 5,120 117 5,237 10,551 172 10,723
------------------------------------------------------------------
Income from Continuing Operations Before 45,197 3,884 49,081 60,477 1,709 62,186
Income Taxes and Minority Interest
Income Tax Provision (13,806) (1,187) (14,993) (7,338) (207) (7,545)
------------------------------------------------------------------
Income from Continuing Operations 31,391 2,697 34,088 53,139 1,502 54,641
Discontinued Operations (net of tax) 5,036 (2,697) 2,339 - (1,502) (1,502)
------------------------------------------------------------------
Net Income 36,427 - 36,427 53,139 - 53,139
Add Back:
Interest - Convertible Debentures (net of tax) 52 52 1,745 1,745
Diluted Shares 165,614 165,614 172,459 172,459
GAAP Diluted EPS - Continuing Operations 0.19 0.21 0.32 0.33
GAAP Diluted EPS 0.22 0.22 0.32 0.32
- -------------------------------------------------------------------------------------------------------------------------
Gross Margin 44.7% 29.1% 46.3% 45.1% 32.6% 46.5%
SG&A 27.3% 23.8% 27.7% 27.2% 25.6% 27.3%
R&D 7.5% 10.1% 7.2% 7.2% 9.2% 7.0%
Operating Margin 7.9% -7.9% 9.4% 9.3% -3.0% 10.6%
Pretax Margin 9.0% -8.5% 10.8% 11.7% -3.5% 13.3%
Net Margin 7.3% NM 8.0% 10.3% NM 11.4%
- -------------------------------------------------------------------------------------------------------------------------
Depreciation Expense 11,642 (2,794) 8,848 12,481 (2,574) 9,907
Charges to Cost of Revenues - - - - - -
- -------------------------------------------------------------------------------------------------------------------------
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
GAAP P&L (as previously reported and restated)
Schedule B
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
Q3-03 Q4-03
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Reported Physics Restated Reported Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 497,116 (48,549) 448,567 583,409 (54,494) 528,915
Cost of Revenues 271,213 (31,389) 239,824 318,280 (32,836) 285,444
SG&A (a) 131,879 (11,508) 120,371 149,309 (13,036) 136,273
R&D 34,900 (4,456) 30,444 37,041 (4,808) 32,233
Restructuring & Other Costs (net) 14,273 (454) 13,819 21,462 (1,719) 19,743
Amortization of acquisition-related intangible assets 2,470 (207) 2,263 2,502 (171) 2,331
------------------------------------------------------------------
Operating Income 42,381 (535) 41,846 54,815 (1,924) 52,891
Interest Income (b) 2,909 1 2,910 2,002 5 2,007
Interest Expense (b) (3,551) 93 (3,458) (2,788) 135 (2,653)
Other Income (net) 10,646 438 11,084 6,545 192 6,737
------------------------------------------------------------------
Income from Continuing Operations Before 52,385 (3) 52,382 60,574 (1,592) 58,982
Income Taxes and Minority Interest
Income Tax Provision (13,388) 1 (13,387) (11,404) (92) (11,496)
------------------------------------------------------------------
Income from Continuing Operations 38,997 (2) 38,995 49,170 (1,684) 47,486
Discontinued Operations (net of tax) 9,518 2 9,520 12,758 1,684 14,442
------------------------------------------------------------------
Net Income 48,515 - 48,515 61,928 - 61,928
Add Back:
Interest - Convertible Debentures (net of tax) 871 871 413 413
Diluted Shares 169,155 169,155 167,812 167,812
GAAP Diluted EPS - Continuing Operations 0.24 0.24 0.30 0.29
GAAP Diluted EPS 0.29 0.29 0.37 0.37
- -------------------------------------------------------------------------------------------------------------------------
Gross Margin 45.4% 35.3% 46.5% 45.4% 39.7% 46.0%
SG&A 26.5% 23.7% 26.8% 25.6% 23.9% 25.8%
R&D 7.0% 9.2% 6.8% 6.3% 8.8% 6.1%
Operating Margin 8.5% 1.1% 9.3% 9.4% 3.5% 10.0%
Pretax Margin 10.5% 0.0% 11.7% 10.4% 2.9% 11.2%
Net Margin 9.8% NM 10.8% 10.6% NM 11.7%
- -------------------------------------------------------------------------------------------------------------------------
Depreciation Expense 12,061 (2,789) 9,272 12,461 (2,811) 9,650
Charges to Cost of Revenues - - - 71 - 71
- -------------------------------------------------------------------------------------------------------------------------
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
GAAP P&L (as previously reported and restated)
Schedule B
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
2003 Q1-04
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Reported Physics Restated Reported Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 2,097,135 (197,757) 1,899,378 582,002 (56,970) 525,032
Cost of Revenues 1,149,120 (129,644) 1,019,476 317,418 (33,246) 284,172
SG&A (a) 558,234 (47,950) 510,284 159,734 (12,981) 146,753
R&D 146,394 (18,398) 127,996 39,822 (5,553) 34,269
Restructuring & Other Costs (net) 48,709 (3,509) 45,200 3,166 (8) 3,158
Amortization of acquisition-related intangible assets 9,904 (866) 9,038 3,977 (171) 3,806
------------------------------------------------------------------
Operating Income 184,774 2,610 187,384 57,885 (5,011) 52,874
Interest Income (b) 19,673 (10) 19,663 1,922 (2) 1,920
Interest Expense (b) (18,676) 479 (18,197) (2,862) 133 (2,729)
Other Income (net) 32,862 919 33,781 3,135 276 3,411
------------------------------------------------------------------
Income from Continuing Operations Before 218,633 3,998 222,631 60,080 (4,604) 55,476
Income Taxes and Minority Interest
Income Tax Provision (45,936) (1,485) (47,421) (16,958) 1,147 (15,811)
------------------------------------------------------------------
Income from Continuing Operations 172,697 2,513 175,210 43,122 (3,457) 39,665
Discontinued Operations (net of tax) 27,312 (2,513) 24,799 - 3,457 3,457
------------------------------------------------------------------
Net Income 200,009 - 200,009 43,122 - 43,122
Add Back:
Interest - Convertible Debentures (net of tax) 4,830 4,830 413 413
Diluted Shares 170,730 170,730 169,996 169,996
GAAP Diluted EPS - Continuing Operations 1.04 1.05 0.26 0.24
GAAP Diluted EPS 1.20 1.20 0.26 0.26
- -------------------------------------------------------------------------------------------------------------------------
Gross Margin 45.2% 34.4% 46.3% 45.5% 41.6% 45.9%
SG&A 26.6% 24.2% 26.9% 27.4% 22.8% 28.0%
R&D 7.0% 9.3% 6.7% 6.8% 9.7% 6.5%
Operating Margin 8.8% -1.3% 9.9% 9.9% 8.8% 10.1%
Pretax Margin 10.4% -2.0% 11.7% 10.3% 8.1% 10.6%
Net Margin 9.5% NM 10.5% 7.4% NM 8.2%
- -------------------------------------------------------------------------------------------------------------------------
Depreciation Expense 48,645 (10,968) 37,677 13,536 (2,658) 10,878
Charges to Cost of Revenues 71 - 71 2,408 - 2,408
- -------------------------------------------------------------------------------------------------------------------------
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
Adjusted P&L (as previously provided and restated)
Schedule C
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
Q1-03 Q2-03
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 500,205 (45,577) 454,628 516,405 (49,137) 467,268
Cost of Revenues 276,367 (32,306) 244,061 283,260 (33,113) 250,147
SG&A (a) 136,727 (10,831) 125,896 140,319 (12,575) 127,744
R&D 37,321 (4,612) 32,709 37,132 (4,522) 32,610
------------------------------------------------------------------
Adjusted Operating Income 49,790 2,172 51,962 55,694 1,073 56,767
Interest Income (b) 7,685 (13) 7,672 7,077 (3) 7,074
Interest Expense (b) (6,904) 175 (6,729) (5,433) 76 (5,357)
Other Income (net) 1,418 117 1,535 599 172 771
------------------------------------------------------------------
Adjusted Income from Continuing Operations 51,989 2,451 54,440 57,937 1,318 59,255
Before Income Taxes and Minority Interest
Income Tax Provision (15,597) (735) (16,332) (14,853) (343) (15,196)
------------------------------------------------------------------
Adjusted Net Income 36,392 1,716 38,108 43,084 975 44,059
Add Back:
Interest - Convertible Debentures (net of tax) 450 1,801 1,745 1,745
Diluted Shares 167,480 173,496 172,459 172,459
Adjusted Diluted EPS 0.22 0.23 0.26 0.27
- -------------------------------------------------------------------------------------------------------------------------
Adjusted Gross Margin 44.7% 29.1% 46.3% 45.1% 32.6% 46.5%
SG&A 27.3% 23.8% 27.7% 27.2% 25.6% 27.3%
R&D 7.5% 10.1% 7.2% 7.2% 9.2% 7.0%
Adjusted Operating Margin 10.0% -4.8% 11.4% 10.8% -2.2% 12.1%
Adjusted Pretax Margin * 10.4% -5.4% 12.0% 11.2% -2.7% 12.7%
Adjusted Net Margin 7.3% NM 8.4% 8.3% NM 9.4%
- -------------------------------------------------------------------------------------------------------------------------
Note: The results as presented above exclude certain components of GAAP results as detailed on Schedule D of this Supplemental
Financial Information package.
* Adjusted Pretax Margin represents Adjusted Income from Continuing Operations Before Income Taxes divided by Revenues.
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
Adjusted P&L (as previously provided and restated)
Schedule C
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
Q3-03 Q4-03
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 497,116 (48,549) 448,567 583,409 (54,494) 528,915
Cost of Revenues 271,213 (31,389) 239,824 318,209 (32,836) 285,373
SG&A (a) 131,879 (11,508) 120,371 149,309 (13,036) 136,273
R&D 34,900 (4,456) 30,444 37,041 (4,808) 32,233
------------------------------------------------------------------
Adjusted Operating Income 59,124 (1,196) 57,928 78,850 (3,814) 75,036
Interest Income (b) 2,909 1 2,910 2,002 5 2,007
Interest Expense (b) (3,551) 93 (3,458) (2,788) 135 (2,653)
Other Income (net) 1,293 438 1,731 595 192 787
------------------------------------------------------------------
Adjusted Income from Continuing Operations 59,775 (664) 59,111 78,659 (3,482) 75,177
Before Income Taxes and Minority Interest
Income Tax Provision (15,369) 170 (15,199) (20,990) 910 (20,080)
------------------------------------------------------------------
Adjusted Net Income 44,406 (494) 43,912 57,669 (2,572) 55,097
Add Back:
Interest - Convertible Debentures (net of tax) 871 871 413 413
Diluted Shares 169,155 169,155 167,812 167,812
Adjusted Diluted EPS 0.27 0.26 0.35 0.33
- -------------------------------------------------------------------------------------------------------------------------
Adjusted Gross Margin 45.4% 35.3% 46.5% 45.5% 39.7% 46.0%
SG&A 26.5% 23.7% 26.8% 25.6% 23.9% 25.8%
R&D 7.0% 9.2% 6.8% 6.3% 8.8% 6.1%
Adjusted Operating Margin 11.9% 2.5% 12.9% 13.5% 7.0% 14.2%
Adjusted Pretax Margin * 12.0% 1.4% 13.2% 13.5% 6.4% 14.2%
Adjusted Net Margin 8.9% NM 9.8% 9.9% NM 10.4%
- -------------------------------------------------------------------------------------------------------------------------
Note: The results as presented above exclude certain components of GAAP results as detailed on Schedule D of this Supplemental
Financial Information package.
* Adjusted Pretax Margin represents Adjusted Income from Continuing Operations Before Income Taxes divided by Revenues.
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
Adjusted P&L (as previously provided and restated)
Schedule C
(In thousands except EPS)
(Unaudited)
------------------------------------------------------------------
2003 Q1-04
------------------------------------------------------------------
Reclassify Reclassify
Previously Spectra- Previously Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Revenues 2,097,135 (197,757) 1,899,378 582,002 (56,970) 525,032
Cost of Revenues 1,149,049 (129,644) 1,019,405 315,010 (33,246) 281,764
SG&A (a) 558,234 (47,950) 510,284 159,734 (12,981) 146,753
R&D 146,394 (18,398) 127,996 39,822 (5,553) 34,269
------------------------------------------------------------------
Adjusted Operating Income 243,458 (1,765) 241,693 67,436 (5,190) 62,246
Interest Income (b) 19,673 (10) 19,663 1,922 (2) 1,920
Interest Expense (b) (18,676) 479 (18,197) (2,862) 133 (2,729)
Other Income (net) 3,905 919 4,824 1,515 275 1,790
------------------------------------------------------------------
Adjusted Income from Continuing Operations 248,360 (377) 247,983 68,011 (4,784) 63,227
Before Income Taxes and Minority Interest
Income Tax Provision (66,809) 2 (66,807) (19,383) 1,319 (18,064)
------------------------------------------------------------------
Adjusted Net Income 181,551 (375) 181,176 48,628 (3,465) 45,163
Add Back:
Interest - Convertible Debentures (net of tax) 4,830 4,830 413 413
Diluted Shares 170,730 170,730 169,996 169,996
Adjusted Diluted EPS 1.09 1.09 0.29 0.27
- -------------------------------------------------------------------------------------------------------------------------
Adjusted Gross Margin 45.2% 34.4% 46.3% 45.9% 41.6% 46.3%
SG&A 26.6% 24.2% 26.9% 27.4% 22.8% 28.0%
R&D 7.0% 9.3% 6.7% 6.8% 9.7% 6.5%
Adjusted Operating Margin 11.6% 0.9% 12.7% 11.6% 9.1% 11.9%
Adjusted Pretax Margin * 11.8% 0.2% 13.1% 11.7% 8.4% 12.0%
Adjusted Net Margin 8.7% NM 9.5% 8.4% NM 8.6%
- -------------------------------------------------------------------------------------------------------------------------
Note: The results as presented above exclude certain components of GAAP results as detailed on Schedule D of this Supplemental
Financial Information package.
* Adjusted Pretax Margin represents Adjusted Income from Continuing Operations Before Income Taxes divided by Revenues.
(a) Corporate SG&A costs are not allocated to Spectra-Physics results. Such costs remain in continuing operations.
(b) Interest income/expense from intercompany borrowings are not allocated to Spectra-Physics results. Such amounts remain in
continuing operations.
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Thermo Electron Corporation
Reconciliation of Previously Reported GAAP and Restated GAAP Results to
Previously Provided Adjusted and Restated Adjusted Results
Schedule D
(In thousands)
(Unaudited)
The components of GAAP results listed below have been
excluded from Adjusted results presented in Schedule C
of this Supplemental Financial Information package.
------------------------------------------------------------------
Q1-03 Q2-03
------------------------------------------------------------------
Previously Reclassify Previously Reclassify
Reported/ Spectra- Reported/ Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Cost of Revenues (a) - - - - - -
Restructuring and Other Costs (net) (b) 8,102 (1,152) 6,950 4,872 (184) 4,688
Amortization of Acquisition-Related Intangible Assets 2,392 (281) 2,111 2,540 (207) 2,333
------------------------------------------------------------------
Difference between GAAP and Adjusted Operating Income 10,494 (1,433) 9,061 7,412 (391) 7,021
------------------------------------------------------------------
Other Income (net)
Loss/(Gain) on Retirement of Debt - - - - - -
Gain on Investments (c) (3,702) - (3,702) (9,952) - (9,952)
------------------------------------------------------------------
Difference between GAAP and Adjusted Income from
Continuing Operations Before Income Taxes and
Minority Interest 6,792 (1,433) 5,359 (2,540) (391) (2,931)
------------------------------------------------------------------
Income Tax Provision (Benefit) (d) (1,791) 452 (1,339) (7,515) (136) (7,651)
------------------------------------------------------------------
Difference between GAAP and Adjusted Income from
Continuing Operations 5,001 (981) 4,020 (10,055) (527) (10,582)
------------------------------------------------------------------
Discontinued Operations (net of tax) (5,036) 2,697 (2,339) - 1,502 1,502
------------------------------------------------------------------
Difference between GAAP and Adjusted Net Income (35) 1,716 1,681 (10,055) 975 (9,080)
------------------------------------------------------------------
(a) The excluded items from cost of revenues include inventory charges, principally for the sale of inventories revalued at the date
of acquisition.
(b) Restructuring and other costs consist principally of severance and retention costs; abandoned facility and other expenses of
real estate consolidation; gains and losses on the sale of businesses, product lines and property; writedowns of businesses held
for sale; and legal/advisory fees associated with a reorganization of the company's non-U.S. subsidiary structure.
(c) The excluded items from gain on investments represent gains from the sale of the company's equity interest in FLIR Systems, Inc.
and Thoratec Corporation.
(d) The excluded items from income tax provision (benefit) include the tax consequences of the items detailed above and benefit from
tax credit carryforwards.
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Thermo Electron Corporation
Reconciliation of Previously Reported GAAP and Restated GAAP Results to
Previously Provided Adjusted and Restated Adjusted Results
Schedule D
(In thousands)
(Unaudited)
The components of GAAP results listed below have been
excluded from Adjusted results presented in Schedule C
of this Supplemental Financial Information package.
------------------------------------------------------------------
Q3-03 Q4-03
------------------------------------------------------------------
Previously Reclassify Previously Reclassify
Reported/ Spectra- Reported/ Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Cost of Revenues (a) - - - 71 - 71
Restructuring and Other Costs (net) (b) 14,273 (454) 13,819 21,462 (1,719) 19,743
Amortization of Acquisition-Related Intangible Assets 2,470 (207) 2,263 2,502 (171) 2,331
------------------------------------------------------------------
Difference between GAAP and Adjusted Operating Income 16,743 (661) 16,082 24,035 (1,890) 22,145
------------------------------------------------------------------
Other Income (net)
Loss/(Gain) on Retirement of Debt 976 - 976 - - -
Gain on Investments (c) (10,329) - (10,329) (5,950) - (5,950)
------------------------------------------------------------------
Difference between GAAP and Adjusted Income from
Continuing Operations Before Income Taxes and
Minority Interest 7,390 (661) 6,729 18,085 (1,890) 16,195
------------------------------------------------------------------
Income Tax Provision (Benefit) (d) (1,981) 169 (1,812) (9,586) 1,002 (8,584)
------------------------------------------------------------------
Difference between GAAP and Adjusted Income from
Continuing Operations 5,409 (492) 4,917 8,499 (888) 7,611
------------------------------------------------------------------
Discontinued Operations (net of tax) (9,518) (2) (9,520) (12,758) (1,684) (14,442)
------------------------------------------------------------------
Difference between GAAP and Adjusted Net Income (4,109) (494) (4,603) (4,259) (2,572) (6,831)
------------------------------------------------------------------
(a) The excluded items from cost of revenues include inventory charges, principally for the sale of inventories revalued at the date
of acquisition.
(b) Restructuring and other costs consist principally of severance and retention costs; abandoned facility and other expenses of
real estate consolidation; gains and losses on the sale of businesses, product lines and property; writedowns of businesses held
for sale; and legal/advisory fees associated with a reorganization of the company's non-U.S. subsidiary structure.
(c) The excluded items from gain on investments represent gains from the sale of the company's equity interest in FLIR Systems, Inc.
and Thoratec Corporation.
(d) The excluded items from income tax provision (benefit) include the tax consequences of the items detailed above and benefit from
tax credit carryforwards.
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10
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Thermo Electron Corporation
Reconciliation of Previously Reported GAAP and Restated GAAP Results to
Previously Provided Adjusted and Restated Adjusted Results
Schedule D
(In thousands)
(Unaudited)
The components of GAAP results listed below have been
excluded from Adjusted results presented in Schedule C
of this Supplemental Financial Information package.
------------------------------------------------------------------
2003 Q1-04
------------------------------------------------------------------
Previously Reclassify Previously Reclassify
Reported/ Spectra- Reported/ Spectra-
Provided Physics Restated Provided Physics Restated
- -------------------------------------------------------------------------------------------------------------------------
Cost of Revenues (a) 71 - 71 2,408 - 2,408
Restructuring and Other Costs (net) (b) 48,709 (3,509) 45,200 3,166 (8) 3,158
Amortization of Acquisition-Related Intangible Assets 9,904 (866) 9,038 3,977 (171) 3,806
------------------------------------------------------------------
Difference between GAAP and Adjusted Operating Income 58,684 (4,375) 54,309 9,551 (179) 9,372
------------------------------------------------------------------
Other Income (net)
Loss/(Gain) on Retirement of Debt 976 - 976 - - -
Gain on Investments (c) (29,933) - (29,933) (1,620) (1) (1,621)
------------------------------------------------------------------
Difference between GAAP and Adjusted
Income from Continuing Operations Before Income
Taxes and Minority Interest 29,727 (4,375) 25,352 7,931 (180) 7,751
------------------------------------------------------------------
Income Tax Provision (Benefit) (d) (20,873) 1,487 (19,386) (2,425) 172 (2,253)
------------------------------------------------------------------
Difference between GAAP and Adjusted Income from
Continuing Operations 8,854 (2,888) 5,966 5,506 (8) 5,498
------------------------------------------------------------------
Discontinued Operations (net of tax) (27,312) 2,513 (24,799) - (3,457) (3,457)
------------------------------------------------------------------
Difference between GAAP and Adjusted Net Income (18,458) (375) (18,833) 5,506 (3,465) 2,041
------------------------------------------------------------------
(a) The excluded items from cost of revenues include inventory charges, principally for the sale of inventories revalued at the date
of acquisition.
(b) Restructuring and other costs consist principally of severance and retention costs; abandoned facility and other expenses of
real estate consolidation; gains and losses on the sale of businesses, product lines and property; writedowns of businesses held
for sale; and legal/advisory fees associated with a reorganization of the company's non-U.S. subsidiary structure.
(c) The excluded items from gain on investments represent gains from the sale of the company's equity interest in FLIR Systems, Inc.
and Thoratec Corporation.
(d) The excluded items from income tax provision (benefit) include the tax consequences of the items detailed above and benefit from
tax credit carryforwards.
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