Exhibit 99.5 THERMO ELECTRON CORPORATION Unaudited Pro Forma Condensed Combined Financial Statements ----------------------------------------------------------- On May 9, 2005, Thermo Electron Corporation (the "company") acquired the stock of certain businesses and assets that collectively comprise the Kendro Laboratory Products ("Kendro") division of SPX Corporation. The following unaudited pro forma condensed combined financial statements have been prepared to give effect to the completed acquisition, which was accounted for using the purchase method of accounting. The unaudited pro forma condensed combined balance sheet as of April 2, 2005, and the unaudited pro forma condensed combined statements of income for the three months ended April 2, 2005 and the year ended December 31, 2004, are presented herein. The unaudited pro forma condensed combined balance sheet gives effect to the acquisition as if it had been completed on April 2, 2005, and combines the unaudited condensed balance sheets of the company and Kendro. The unaudited pro forma condensed combined statement of income for the three months ended April 2, 2005 and the year ended December 31, 2004 combines the historical results of the company and Kendro and gives effect to the acquisition as if it had occurred on January 1, 2004. The unaudited pro forma condensed combined financial statements presented are based on the assumptions and adjustments described in the accompanying notes. The unaudited pro forma condensed combined financial statements are presented for illustrative purposes and do not purport to represent what the financial position or results of operations would actually have been if the events described above occurred as of the dates indicated or what such financial position or results would be for any future periods. The unaudited pro forma condensed combined financial statements, and the accompanying notes, are based upon the respective historical consolidated and combined financial statements of the company and Kendro, and should be read in conjunction with the historical financial statements and related notes of the company contained in the company's Quarterly Report on Form 10-Q for the fiscal quarter ended April 2, 2005, and Annual Report on Form 10-K for the year ended December 31, 2004, as well as the historical combined financial statements and related notes of Kendro, which are attached as Exhibit 99.4 to the company's Current Report on Form 8-K/A (Amendment No. 1) filed on July 22, 2005. THERMO ELECTRON CORPORATION Unaudited Pro Forma Condensed Combined Balance Sheet April 2, 2005 (In thousands) Thermo Electron, Kendro, Pro Forma Pro Forma As Reported As Reported Adjustments Combined ----------- ----------- ----------- ---------- ASSETS Current Assets: Cash and cash equivalents $ 351,560 $ 5,364 $ (334,319) (A) $ 22,605 Short-term available-for-sale investments 177,043 - - 177,043 Accounts receivable, net 458,558 63,390 - 521,948 Related-party receivable - 1,700 (1,700) (G) - Inventories 345,605 58,644 12,147 (F) 416,396 Deferred tax assets 91,558 - (2,463) (J) 89,095 Other current assets 61,294 10,510 (4,887) (H) 66,917 ---------- ---------- ---------- ---------- 1,485,618 139,608 (331,222) 1,294,004 ---------- ---------- ---------- ---------- Property, Plant and Equipment, Net 238,030 63,098 3,254 (I) 304,382 Note Receivable from SPX - 120,000 (120,000) (G) - Acquisition-related Intangible Assets 166,305 70,116 (70,116) (C) 496,737 330,432 (D) Other Assets 159,171 2,561 - 161,732 Goodwill 1,505,339 310,570 (310,570) (C) 1,953,098 447,759 (D) ---------- ---------- ---------- ---------- $3,554,463 $ 705,953 $ (50,463) $4,209,953 ========== ========== ========== ========== < 2 > THERMO ELECTRON CORPORATION Unaudited Pro Forma Condensed Combined Balance Sheet (continued) April 2, 2005 (In thousands) Thermo Electron, Kendro, Pro Forma Pro Forma As Reported As Reported Adjustments Combined ----------- ----------- ----------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Short-term obligations and current maturities of long-term obligations $ 15,500 $ 331 $ 259,000 (B) $ 274,831 Accounts payable 123,692 25,655 - 149,347 Accrued payroll and employee benefits 69,018 14,399 - 83,417 Accrued income taxes 30,908 1,062 - 31,970 Deferred revenue 90,628 5,750 - 96,378 Other accrued expenses 177,600 12,855 - 190,455 Current liabilities of discontinued operations 41,173 - - 41,173 ---------- ---------- ---------- ---------- 548,519 60,052 259,000 867,571 ---------- ---------- ---------- ---------- Deferred Income Taxes 14,066 14,082 48,193 (J) 76,341 Other Long-term Liabilities 91,458 24,163 - 115,621 Note Payable to SPX - 6,522 (6,522) (G) - Long-term Obligations: Senior notes 133,681 - 250,000 (B) 383,681 Subordinated convertible obligations 77,234 - - 77,234 Other 12,812 - - 12,812 ---------- ---------- ---------- ---------- 223,727 - 250,000 473,727 ---------- ---------- ---------- ---------- Shareholders' Equity: Common stock 180,433 - - 180,433 Capital in excess of par value 1,392,143 - - 1,392,143 Retained earnings 1,430,113 - - 1,430,113 Treasury stock at cost (437,315) - - (437,315) Deferred compensation (4,873) - - (4,873) Accumulated other comprehensive items 116,192 81,748 (81,748) (K) 116,192 Parent company investment - 519,386 (519,386) (K) - ---------- ---------- ---------- ---------- 2,676,693 601,134 (601,134) 2,676,693 ---------- ---------- ---------- ---------- $3,554,463 $ 705,953 $ (50,463) $4,209,953 ========== ========== ========== ========== See accompanying notes to unaudited pro forma condensed combined financial statements. < 3 > THERMO ELECTRON CORPORATION Unaudited Pro Forma Condensed Combined Statement of Income Three Months Ended April 2, 2005 (In thousands except per share amounts) Thermo Electron, Kendro, Pro Forma Pro Forma As Reported As Reported Adjustments Combined ----------- ----------- ----------- --------- Revenues $ 559,208 $ 93,860 $ - $ 653,068 ---------- ---------- ---------- ---------- Costs and Operating Expenses: Cost of revenues 299,974 55,422 27 (I) 355,423 Selling, general and administrative expenses 163,501 19,196 (519) (C) 198,700 16,522 (D) Research and development expenses 36,328 3,032 - 39,360 Restructuring and other income, net (271) (23) - (294) ---------- ---------- ---------- ---------- 499,532 77,627 16,030 593,189 ---------- ---------- ---------- ---------- Operating Income 59,676 16,233 (16,030) 59,879 Interest Income 3,336 2,130 (1,939) (A) 1,530 (1,997) (G) Interest Expense (3,155) (133) (5,091) (B) (8,278) 101 (G) Other Income, Net 3,123 3 - 3,126 ---------- ---------- ---------- ---------- Income from Continuing Operations Before Provision for Income Taxes 62,980 18,233 (24,956) 56,257 Provision for Income Taxes (17,397) (4,447) 6,040 (L) (15,804) ---------- ---------- ---------- ---------- Income from Continuing Operations $ 45,583 $ 13,786 $ (18,916) $ 40,453 ========== ========== ========== ========== Earnings per Share from Continuing Operations: Basic $ .28 $ .25 ========== ========== Diluted $ .28 $ .25 ========== ========== Weighted Average Shares: Basic 160,957 160,957 ========== ========== Diluted 164,730 164,730 ========== ========== See accompanying notes to unaudited pro forma condensed combined financial statements. < 4 > THERMO ELECTRON CORPORATION Unaudited Pro Forma Condensed Combined Statement of Income Year Ended December 31, 2004 (In thousands except per share amounts) Thermo Electron, Kendro, Less: Bio- Pro Forma Pro Forma As Reported As Reported Processing Adjustments Combined ----------- ----------- ---------- ----------- ---------- Revenues $2,205,995 $ 370,594 $ 4,416 $ - $2,572,173 ---------- ---------- ---------- ---------- ---------- Costs and Operating Expenses: Cost of revenues 1,191,516 227,694 4,054 (169) (H) 1,415,095 108 (I) Selling, general and administrative expenses 626,458 76,582 2,147 (3,460) (C) 763,519 66,086 (D) Research and development expenses 134,680 11,005 377 - 145,308 Restructuring and other costs, net 15,829 11,566 - (5,561) (E) 21,834 ---------- ---------- ---------- ---------- ---------- 1,968,483 326,847 6,578 57,004 2,345,756 ---------- ---------- ---------- ---------- ---------- Operating Income 237,512 43,747 (2,162) (57,004) 226,417 Interest Income 9,021 7,048 - (6,620) (A) 2,774 (6,675) (G) Interest Expense (10,979) (787) - (20,365) (B) (31,794) 337 (G) Other Income (Expense), Net 23,665 (241) - - 23,424 ---------- ---------- ---------- ---------- ---------- Income from Continuing Operations Before Provision for Income Taxes 259,219 49,767 (2,162) (90,327) 220,821 Provision for Income Taxes (40,852) (15,597) - 28,553 (L) (27,896) ---------- ---------- ---------- ---------- ---------- Income from Continuing Operations $ 218,367 $ 34,170 $ (2,162) $ (61,774) $ 192,925 ========== ========== ========== ========== ========== Earnings per Share from Continuing Operations: Basic $ 1.34 $ 1.18 ========== ========== Diluted $ 1.31 $ 1.16 ========== ========== Weighted Average Shares: Basic 163,133 163,133 ========== ========== Diluted 167,641 167,641 ========== ========== See accompanying notes to unaudited pro forma condensed combined financial statements. < 5 > THERMO ELECTRON CORPORATION Notes to Unaudited Pro Forma Condensed Combined Financial Statements 1. Basis of Presentation The unaudited pro forma condensed combined balance sheet was prepared using the historical balance sheet of the company as of April 2, 2005, and Kendro as of March 31, 2005. The unaudited pro forma condensed combined statements of income were prepared using the historical statements of income of the company for the three months ended April 2, 2005, and for the year ended December 31, 2004, and of Kendro for the three months ended March 31, 2005, and for the year ended December 31, 2004. The unaudited pro forma condensed combined statement of income for the year ended December 31, 2004, was adjusted to exclude the operating results of Kendro's Carr BioProcessing ("BioProcessing") product line, which was sold by Kendro in November 2004. 2. Acquisition Financing The purchase price for Kendro was $833.5 million in cash, net of cash acquired, subject to a post-closing adjustment. The company initially funded the purchase price for the acquisition with cash on hand and $570 million in proceeds under a 364-day senior unsecured revolving credit facility. Subsequently, the company paid down $61 million of the revolving credit facility with cash. The company refinanced the remaining balance of the revolving credit facility using a combination of short- and long-term debt instruments. As of July 6, 2005, the debt instruments in place to finance the acquisition consisted of $250 million aggregate principal amount of 5% Senior Notes due 2015, $80 million of short-term money market loans and $179 million of short-term borrowings under a revolving credit facility in Europe. 3. Purchase Price Allocation The unaudited pro forma condensed combined financial statements reflect a purchase price of $833.5 million, net of cash acquired, plus $3.75 million of estimated transaction costs. The purchase price is subject to a post-closing balance sheet adjustment. The cash paid to SPX for Kendro initially consisted of $833.5 million plus $8.7 million for bank cash balances at the closing date. At that date, Kendro had a book cash balance of $2.6 million, reflecting checks written immediately prior to the closing. The difference between the bank cash and book cash at the acquisition date will be reimbursed to the company through the post-closing adjustment process. The allocation of the purchase price was based on estimates of the fair value of the net assets acquired and is subject to adjustment upon finalization of the purchase price allocation. The Company is in the process of obtaining real estate appraisals for owned facilities. Adjustments to the fair value of Kendro's fixed assets could result. The company is evaluating potential restructuring actions that may be undertaken at Kendro or within existing businesses with which Kendro is being integrated. Such actions may include rationalizing product lines, consolidation of facilities and reductions in staffing levels. The company will record the cost of restructuring actions at Kendro as an increase to goodwill when decisions are made as to the extent of such actions. Costs of restructuring actions at existing businesses will be recorded to expense. The company expects to finalize its restructuring plan no later than one year following completion of the Kendro acquisition. < 6 > THERMO ELECTRON CORPORATION 3. Purchase Price Allocation (continued) The components of the preliminary purchase price allocation are as follows (in thousands): Purchase Price: Cash paid $ 842,200 Cash acquired (2,631) Estimated transaction costs 3,750 --------- $ 843,319 ========= Allocation: Current assets $ 139,493 Property, plant and equipment 67,305 Acquired intangible assets 330,432 Goodwill 444,365 Other assets 2,591 Other liabilities (140,867) --------- $ 843,319 ========= Differences between the above allocation and the March 31, 2005 combined condensed pro forma balance sheet reflect changes in Kendro's balance sheet between March 31, 2005 and May 9, 2005. Acquired intangible assets are as follows (in thousands): Estimated Amortization Fair Value Period ---------- ------------ Customer Relationships $287,355 5 years Product Technology 43,077 5 years -------- $330,432 ======== 4. Pro Forma Adjustments The following pro forma adjustments are based on preliminary estimates, which may change as additional information is obtained: (A) To record the cash paid for the acquisition and to record the related estimated decrease in interest income earned. (B) To record the $250 million aggregate principal amount of 5% Senior Notes due 2015, the $80 million of short-term money market loans, the $179 million of short-term borrowings under a revolving credit facility in Europe and related interest expense. (C) To eliminate Kendro's existing goodwill and intangible assets, and amortization of the intangible assets. (D) To record goodwill and acquired intangible assets, and amortization of the intangible assets. (E) To eliminate the loss recorded by Kendro on its sale of the BioProcessing product line. (F) To adjust Kendro's inventory to fair value. The cost of sales impact of the write-up of inventory to fair value has been excluded as it is a non-recurring item. (G) To remove intercompany balances receivable from or payable to Kendro's parent company that were excluded as part of the purchase agreement, and related interest income and expense. < 7 > THERMO ELECTRON CORPORATION 4. Pro Forma Adjustments (continued) (H) To remove the net book value of the BioProcessing facility land and building that were not included in the acquisition and to remove the depreciation expense recorded for this facility through April 2004. Subsequent to April 2004, this facility was held for sale by Kendro and, as a result, was no longer depreciated and was classified as a current asset. (I) To adjust Kendro's property, plant and equipment to fair value and record the related depreciation. (J) To record deferred tax liabilities related to identified intangible assets and inventory adjustments, where required. (K) To remove the historical equity accounts of Kendro. (L) To record a tax provision on the income earned by Kendro's U.S. operations which operated substantially within a partnership structure, and accordingly, were not subject to income taxes and to record a tax benefit on pro forma adjustments to income. < 8 >