Good morning, ladies and gentlemen, and welcome to the Thermo Fisher Scientific 2014 first quarter earnings conference call. [Operator Instructions] I would like to introduce our moderator for the call, Mr. Kenneth Apicerno, Vice President, Investor Relations. Mr. Apicerno, you may begin the call.

Good morning, and thank you for joining us. On the call with me today is Marc Casper, our President and Chief Executive Officer, and Pete Wilver, Senior Vice President and Chief Financial Officer. Please note this call is being webcast live and will be archived on the Investors section of our website, thermofisher.com, under the heading Webcasts & Presentations, until May 16, 2014. A copy of the press release of our 2014 first quarter earnings and future expectations is also available on our website under the heading Financial Results. So before we begin, let me briefly cover our Safe Harbor statement. Various remarks that we may make about the company's future expectations, plans, and prospects constitute forward-looking statements for purposes of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. Actual results may differ materially from those indicated by these forward-looking statements as a result of various important factors, including those discussed in the company's annual report and 10-K for the year ended December 31, 2013, under the caption, Risk Factors, which is on file with the Securities and Exchange Commission and also available in the Investors section of our website under the heading SEC Filings. While we may elect to update forward-looking statements at some point in the future, we specifically disclaim any obligation to do so even if our estimates change. Therefore, you should not rely on these forward-looking statements as representing our views as of any date subsequent to today. Also during the call, we'll be referring to certain financial measures not prepared in accordance with Generally Accepted Accounting Principles or GAAP. A reconciliation of these non-GAAP financial measures to the most directly comparable GAAP measures is available in the press release of our first quarter 2013 earnings and future expectations and also in the Investors section of our website under the heading Financial Information. Before we get started, one other item to note is that the commentary we provide on today’s call regarding the company’s revenue growth by end market and geography is on an end market basis only, and therefore does not include the performance of Life Technologies. So with that, I'll now turn the call over to Marc.

Thank you, Ken, and good morning everyone. Thank you for joining us today for our Q1 call. I’m pleased to report that we achieved a number of significant milestones in the first three months of the year, and our performance positions us well to meet our goals for 2014. First, as you all know, we closed on the acquisition of Life Technologies in early February. I’ve spent quite a bit of time since then travelling to our new sites in the U.S. and Europe to do business reviews, hold town halls with our new colleagues, and visit our customers. I continue to be impressed by the caliber of people I meet, the innovative technologies being developed, and the passion the team has for using science to make a real difference in the world. It’s also very clear to me that the life science solutions team shares our commitment to unrivaled industry leadership, and that’s an important common denominator. On the topic of integration, I’m very pleased to report that our teams are implementing their plans and executing extremely well. We had a number of months to plan the integration so the team would be able to hit the ground running immediately after the close. As you know, we have a great track record of integrating acquisitions and achieving the synergies that we signed up for. We’ve targeted $85 million of synergies in 2014 from the Life Technologies transaction and have no doubt that we’ll accomplish that goal. In late March, we completed the sale of the delayed divestitures that we previously announced to GE, and we received over $1 billion for our cell culture sera and media, gene modulation, and magnetic beads businesses. We were pleased to be able to complete the transaction expeditiously. The proceeds provide us with more…

Thanks, Marc. Good morning everyone. I’ll begin with an overview of our Q1 financial performance for the total company, then provide some color on each of our four segments and conclude with our updated 2014 guidance. Before I get into the details of our results, as we stated in our press release, our financial results for the quarter include Life Technologies as of February 4 and exclude the related divestitures as of March 22. As I mentioned last quarter, at the total company level, we’re reporting organic revenue growth using our standard methodology. That means we’ll exclude the results of Life Technologies until we reach the one-year anniversary date of the acquisition. However, for the life sciences solutions segment, which consists primarily of the Life Technologies businesses and our remaining biosciences businesses, we’re providing organic revenue growth on a pro forma basis as if we had owned Life Technologies for all of 2013 and 2014. We’re doing this to give you insight into the growth performance of that segment. So, starting with our overall financial performance, we delivered a solid quarter, resulting in a 12% increase in adjusted EPS to $1.53. GAAP EPS was $1.36 in Q1, up 46% from $0.93 in Q1 2013, primarily as a result of the gain on the divestitures. Starting with the top line, Q1 total revenue increased 22% year over year and we delivered 2% organic growth. Q1 reported revenue includes 20% growth from acquisitions net of divestitures and an immaterial positive impact from foreign exchange. We strengthened our backlog in the quarter with bookings exceeding revenue by 2%. By geography, North America declined organically in the low single digits, Europe grow in the mid-single digits, and Asia Pacific grew in the high single-digits, with China growing low double-digits. The rest of the world…

Thanks, Pete. Operator, we’re ready to open it up for Q&A.

[Operator instructions.] Our first question comes from Jon Groberg of Macquarie.

I guess the first question is, North America now is going to be a slightly larger part of your revenues given life and obviously still a bit weaker. You talked about government and academic, healthcare utilization, but could you maybe give us a little bit more detail by segment what you’re seeing in North America and maybe how you see that playing out throughout the remainder of the year?

In terms of North America, in aggregate, things were fairly similar to what we’ve seen over the last year or two, with two exceptions. Healthcare utilization is typically at your peak in Q4, and at your trough, or lowest level of utilization, in Q1. So that’s a pattern that started in 2013 and continues to be even a little bit more dramatic as you get to 2014. So you have that dynamic, and we expect that that improves as the year unfolds. From an academic and government perspective, the appropriations is a positive, and as we said on our original call in February, we expect funds to flow from the appropriations to happen in the second half of the year, which is kind of customary in terms of how that works. Clearly, as we’ve talked to a number of our customers, they worked fewer days in the early part of the year, and that had some effect on our industry in terms of consumable demand, and that should obviously be just a one-time factor that will not repeat as the year goes on.

And what were some of the implied markets, or some of the more industrial markets in North America?

From a North America perspective, no really big changes. Industrial and applied continues to strengthen, and pharma and biotech continues to be an area of strength for the company. So those are clearly positives.

You mentioned Interphex, and obviously I was there and looking at the opportunities with your bag business and [Gibco]. And obviously, the more you dig into this, it looks like there’s a lot of opportunity from a revenue synergy standpoint. I know it’s not something you’ve talked about as much in the investment community, because it’s harder to get credit for it, but maybe now that you’ve met with people, you’re travelling around, you’re examining opportunities, you’re going over to Asia, I’m just curious, from a revenue synergy opportunity, how are you thinking about the acquisition with Life relative to maybe where you were six months or so ago?

From our perspective, we’re very excited about the logic of the combination and the revenue synergies that we’re going to capture over time. In fact, that will be one of the themes that we cover at our analyst day. Mark Stevens will walk through some of the things that we’re working towards. Not going to have a big impact in 2014. We’ve assumed that there won’t be any revenue synergies this year, although I assume we’ll deliver something in the later half that’s small. But they really ramp up in ’15 and beyond. In the area of the one that you actually saw yourself, in Interphex, we didn’t assume a lot of revenue synergies, because we’re doing a divestiture and so forth, but it’s a great combination of having the single use technologies from our Thermo Scientific brand being combined with the Life Technologies position in the media sera as well as the downstream analytics. So that combination should actually be quite powerful, and over time should put us in the position to gain significant share in that market segment. Other areas of revenue synergy, clearly our ecommerce capabilities are strengthened by the combination, great strength in Asia Pacific and emerging markets, and good opportunities to leverage our complementary channel strength, both our Fisher Scientific channel as well as the strength that Life Technologies brings to the company. So, lots of opportunities for the company to capture revenue synergies.

Our next question comes from Ross Muken with ISI Group.

I guess on the core growth number for the quarter, how did it sort of pace relative to your expectations as the quarter went on and relative to your view coming in? And how do we put in context the book-to-bill, which is not a metric we look at for you guys that often, as it’s usually around one, but it was sort of particularly robust this quarter. How do we put all of that in context?

When we looked at our original growth outlook for the year in our guidance call at the beginning of the year, we looked at 3% to 4% organic growth for Thermo Fisher and 2% to 3% for the life sciences solutions segment. The Q1 performance, nothing has changed in terms of our expectation for the full year. We’re very confident in our ability to achieve both of those milestones. When I look at the first quarter, and the question around phasing, January and February were softer than normal. March was a strengthening and obviously bookings also were much better than revenue, and that’s really driven by just the timing, as customers got back to work later in the quarter. We had good bookings momentum, which gives us confidence as we continue through the year to achieve our organic growth goals.

I guess just relative to growth in China, we had run at 20% for a long time. It came down to kind of mid upper teens, and now we’re kind of in the low double-digits. As you think about that geography going forward, obviously the PMIs haven’t been great. It seems like the healthcare piece is quite healthy, the industrial is a lot more mixed. Any sort of pacing there or change there in terms of how you’re thinking about that as a growth contributor, maybe on a near versus longer term basis?

You know, I’m actually heading off to China next week. My view is a couple of things. One, we continue to have a very strong position. We delivered good growth, albeit a little bit slower than we have delivered over the last couple of years. Healthcare is very strong, and that’s been a continuing trend. And I agree, kind of industrial is a bit mixed. I’ll spend more time with the team. Basically, nothing has changed with the long term outlook in terms of our view on China. We still believe it’s going to be in the range of mid-teens as the year progresses.

And one quick one for Pete. Did you call out the actually dollar contribution in the quarter? I know you gave us a net number. Are you going to be providing that so we can kind of back in?

What I said is the operating performance of Thermo Fisher standalone was about 30 basis points of margin expansion in the quarter. So that’s really the number to look at.

I’m sorry, on a revenue basis. The revenue dollars.

Off the top of my head, I don’t know the number. I believe it’s in my script.

Our next question comes from Tycho Peterson of JPMorgan.

First question, just on the pharma channel. It’s obviously been a busy week in M&A world for pharma and healthcare in general. Could you maybe just talk about your view on the trajectory? I know you previously guided for a deceleration in the pharma business, but what’s your latest thinking as we think about all the potential M&A here?

The first thing is another very strong quarter of performance in our biopharma customer set. A little bit stronger than the full year guidance that we gave in February, so the team executed well. Obviously a lot of corporate repositioning announced over the last 24 or 48 hours, with our customer set. And I think as companies look for synergies, we typically gain share. They have targets, we have incredibly strong relationships with the executive team, and we bring them ideas on how they can get higher impact for their dollars of spend. And in fact, two of the CEOs that were involved in those repositionings, and I already communicated about some opportunities, so we have very strong real time relationships with these customers.

And then as we think about the integration initiatives, obviously you’ve highlighted PPI for your own business, can you just talk maybe about how easy it is to port over that process to the life business and other kind of big next steps? I guess you’ll get into a lot of this at the analyst day, but how do we think about applying PPI to the underlying life business?

Even though we’ve only owned the business for a couple of months, the reality is they’re already starting to use our business processes, so in terms of how we operate our business. And we already have our PPI methodology being implemented. And we’ll highlight some of the impacts of that, but that’s something that we start right at the beginning, and start with the training, start with the impact, and it’s part of the synergies that we deliver, and it’s part of the ongoing productivity that we’ll be able to drive for that business and certainly improve our customer experience, which positions us to accelerate growth and gain share.

Pete, can you quantify the weather impact? It’s a tricky thing, I’m sure, but I’m just wondering if you’ve got a number you can throw out.

Yeah, it’s obviously not an exact science, but when we look at the weather impact, as well as the impact of seasonal products, both flu and pollen were down versus the prior year, it’s about a 1 percentage point impact on the quarter.

Our next question comes from Derik de Bruin from Bank of America Merrill Lynch.

I’m getting some questions from people on the second quarter guidance, the trajectory there. I assume the midpoint of that is a little bit lower than the Street number for the EPS number, if you sort of use your math. I assume that’s just all related to the timing of synergies and when things are coming through. Could you talk about your plans in terms of how you’re looking at synergies and what the different phases are with that?

Just one thing to keep in mind, in terms of Q2, we always have a seasonal impact in Q2, because that’s when we do salary increases. So that has an impact on the bottom line, and that’s true for Life Technologies as well. So that could be one of the differences. In terms of the synergies, we obviously realize $17 million in Q1 already. Those were the duplicative public company costs that we were able to eliminate, pretty much on day one. And then as we go through the year, we’re continuing to eliminate duplicative corporate costs, for corporate functions, and we’re beginning to integrate the biosciences business, the businesses, legacy Thermo Fisher, that were combined into Life Technologies to create Life Sciences Solutions. So those will build throughout the year.

Has there been anything that sort of stuck out in Life in terms of when you got under the hood and looked for potential revenue surprises in the sense of more opportunity to develop new products, more potential downstream synergies in terms of revenue potential for the company, new product investments? I’m just curious in terms of how you’re thinking about the business now that you’ve got your hands on it.

As we’ve thought over the last couple of months, part of the activity is for myself and other members of the team just to get visibility to our new colleagues, visit customers jointly and really look at the opportunities. And one of the things that, to me, has been a real highlight is I spent quite a bit of time meeting with some of our new scientists - not new to the company, but new to Thermo Fisher - and they’re working on great technologies. So we’re bringing a really complementary suite of technologies and we’re already brainstorming long term on what are the new solutions that we can bring out from combining the two companies’ suites of technology capabilities. So long term, I’m very excited about what both companies bring. From a customer perspective, feedback is incredibly positive. They see great synergy between the company, and the positions us the opportunity to gain share. So no surprises, but it’s been very positive and the business is performing as we expected, so we’re off to a good start.

Our next question comes from Doug Schenkel with Cowen & Company. Doug Schenkel - Cowen & Company : Is there anything you could share regarding the changes in allocation of investment at Life Technologies product pipeline or commercial infrastructure you have implemented or are implementing since the deal closed?

From my perspective, what we do from an innovation perspective is make sure that we’re maximizing the impact of our investment. Innovation is a core part of our strategy, and that’s part of the reason we’re meeting with our scientific leaders and scientists, just to really get an understanding of what’s in the pipeline. It’s business as usual right now, which is teams are working on great things, and they’re doing a great job, and that’s what they’re focused on. And then certainly we’re looking for what are the new opportunities that the combined company has going as we get later into the year and into 2015. So it’s a very exciting time from a scientific and innovation perspective. Doug Schenkel - Cowen & Company : With One Lambda and Life under Thermo, can you just talk about the development efforts of sequence based HLA typing? This is a rapidly growing market and a lot of your biggest competitors announced earlier this year that they will be making a push into this market. So how are you thinking about competitive dynamics and the HLA sequencing market size?

In terms of our transplant diagnostics business, it’s doing really well. It’s been a great acquisition, growing well above what the acquisition model assumed in 2012, so I feel great about that. We have integrated the HLA capabilities from a sequencing perspective, that Life Technologies brought to Thermo Fisher, into that business already. So that’s a combined offering that we’re working on, and we feel good about our prospects in that area.

Our next question comes from Steve Willoughby with Cleveland Research.

I was wondering if you could provide a little more color as it relates to the growth rates within the life science solutions segment, specifically if you strip out the standalone or existing Thermo business, what did that grow versus what did the Life Technologies business grow? And then my second thing was just on the analytical instruments business. I heard you said that mass spec and chromatography both saw strong growth. I was just wondering if you could talk about the remaining pace of that business and what the trends are with those products.

In terms of the analytical instruments business, what else is in there is a lot of our industrial chemical analysis businesses. So you obviously have great strength in chrom and mass spec, you still have some weakness in the later cycle, longer lead time products. So that would be what you see there. I was encouraged in the quarter by the strengthening in our portable instruments business. That’s kind of the shorter cycle industrial business, so that saw a nice pickup in the quarter. So there’s some signs of a continued economic recovery in the industrial markets. From the life sciences solutions perspective, we’re already integrating that business, so we’re thinking about that as one unified business as we put our biosciences business in there. The growth rates were pretty similar between what would have been legacy Thermo Fisher products and what was the Life Technologies products. So they both grew around the same rate, in aggregate. So that’s the view on the splits there.

Our next question comes from Tim Evans from Wells Fargo Securities.

Just to follow up there on the question from Steve, in the life science solutions business, could you maybe give us a little bit more commentary around the clinical end markets that that business serves, particularly in molecular diagnostics products or the products going into that market?

Maybe give a little bit more color in aggregate on the life sciences solutions segment, just to frame it, and I’ll cover clinical as well in that. So when I look at the performance of the business and the outlook, first of all, we feel confident about the 2% to 3% growth organically this year. Within life science solutions, you really have three main businesses: bioproduction, which is our fastest growing portion of the portfolio; biosciences, which is our market leading position in our high tech bioscience reagents; and you have genetic sciences, which is made up of our QPCR franchise; our applied markets, such as human identification. You have animal and food testing as well. You have our next gen sequencing business, as well as our Sanger sequencing franchise. Within the next gen sequencing businesses, you actually have a nice clinical presence as well, as there’s adoption of both those technologies there. And we continue to have good momentum in that part of our portfolio. In terms of highlights, as I thought about it for the quarter, what I would say is I was very encouraged to see that QPCR had a good quarter in terms of growth. We have really nice momentum in next gen sequencing. So I think that’s a really nice complement to how the life science solutions team has started off the year.

Given those dynamics, though, and the 1% growth, the headwind from the licensing and maybe some other pieces of the business, that must have been fairly significant.

Yeah, so headwinds, the OEM licensing royalties were all headwinds versus what was a strong Q1 of 2013. We saw some headwinds in portions of our Sanger sequencing business as we’ll. So those would be the headwinds that we would have seen in Q1.

Our next question comes from Isaac Ro from Goldman Sachs.

Pete, just wondering if you could put a little color on the pricing environment this quarter and your expectations for the year in the context of your core growth guidance?

In the quarter we did realize positive price, but it was between zero and 50 basis points, so pretty much consistent with what we’ve seen for the last every quarter in the prior year, so slightly positive. That’s basically what we’re assuming for the full year, around 25 basis points.

And then a follow up to the earlier question on pharma, the M&A activity there. If we were to compare the share gains that you typically get in these types of opportunities, against the overarching cuts that you typically see in the combined R&D budgets for those accounts, is it fair to say the net effect of those two forces is typically a positive for your business in those accounts?

As we’ve said in years past, typically you get a little bit of a dampener as companies are figuring out exactly what they’re going to be doing. But we typically then gain share, because we’re part of their synergy program and they typically move spend to us as part of that process, and it nets out to be, over time, a positive for Thermo Fisher.

Our next question comes from Paul Knight from Janney Capital.

Marc, you had mentioned the handheld market, and that kind of a leading indicator for these applied markets improving. Have you been surprised how slow it’s taken the industrial market to improve?

I’m not surprised. We’re in this new normal of more slow recovery, economically globally. And so we’re seeing the improvements now in our shorter cycle business and that’s good news. And then at least we have stabilization in the longer lead time businesses. So we didn’t come out of the last recession with a big springback in terms of growth, but it’s something that we assumed, and we’re managing through, which is why the use of PPI and managing our costs effectively positions the company so well. We’ve been able to deliver great earnings growth in a muted top line environment, and we feel like we’re very well-positioned to capitalize on the opportunities that are out there.

And specifically, the [unintelligible] analyzer, probably in the metals mining market, you’re seeing, I guess, stability there?

Yeah, we’re seeing growth again in our handhelds, which is a good leading indicator for us.

And then you [cite], in mass spectrometry, I think that must be what, stable pharma and biotechnology capital going into that market?

Those two are good drivers, plus really great products. Our products are just being adopted, so from our perspective, we have a really exciting pipeline of demand for what we launched at ASMS last year, and we’re looking forward to ASMS coming up again later in the spring, and a new suite of products as well.

Our next question comes from Jeff Elliott with Robert W. Baird.

I guess just a followon to Paul’s question. Can you give a little more color on where you’re seeing the growth in MS and chromatography, and perhaps an update on the competitive environment?

Orbitrap Fusion Tribrid is doing great. High end research, academic, biopharma, extremely strong adoption. So that’s been a very positive driver. From a chromatography perspective, applied markets, industrial markets, have been good for chromatography. We have strength in liquid chromatography, we have strength in [IM] chromatography in the quarter, and feel like we’re well-positioned there. So those are two businesses that had very good growth in the quarter.

And a follow up on China. Can you give a little more color on some of the growth rates you’re seeing in other areas there, like some of the more applied areas, environment and whatnot?

I would say industrial and applied, not dramatic changes from what we’ve seen over the last few quarters. We saw a little bit of a slowness in the release of funds from government customers in China, and that happens from time to time. That seemed to be a factor that played out a little bit in the quarter.

Our final question comes from Brandon Couillard from Jefferies.

Pete, on the free cash flow revision, could you elaborate on the moving parts that are contemplated in the new outlook relative to the prior view?

As I said, nothing has really changed in the operational side of our free cash flow guidance. But as I said, there’s lots of moving pieces, just in the way that acquisitions and divestitures are reported. As I said, in Q1, we had about $240 million of payments related to the acquisition that hit free cash flow, $50 million of working capital impact. And then just to give another example that we’ll experience later in the year, the gross proceeds of the divestitures are excluded from free cash flow, but in fact the tax payments that we’ll make are actually included in free cash flow. So in that case, nothing’s changed in our assumption that we’re going to get somewhere around $800 million net from the divestitures, but reported cash flow will take a hit of over $200 million as a result of that. So the change is in the range of $400 million. Again, nothing operational. It doesn’t change our year-end cash balance forecast or how fast we think we’re going to pay down debt. It’s just simply the moving pieces of how the acquisition and divestitures are reported.

And then Marc, you spoke to the government and academic markets in the U.S., but curious what your view would be for that end market in the European and Asian geographies.

Generally, Europe, in its entirety, continues to be consistent. We had mid-single digit growth in the quarter, continuing to benefit from stability. And that’s been a positive. There’s been some exciting R&D initiatives that are government funded that bode well for long term European demand. So I feel good about that. I don’t think we mentioned this as much, but we had good position and good strength in Japan in the quarter. There’s some initiatives around a tax increase that went into effect April 1 that encouraged customers to spend some money. So that’s off to a good start as well. So that’s a quick view on academic and government around the world. Let me wrap it up with just a couple of quick comments. As I think back on the quarter, we made significant progress in Q1. I think we delivered solid results and positioned ourselves well to deliver another strong year. Thanks for the support of Thermo Fisher Scientific and certainly we look forward to updating you next quarter. Thanks, everyone.